House of Commons

Monday 7th February 2011 Commons Chamber

Monday 7 February 2011

The House met at half-past Two o’clock

Prayers

Monday 7th February 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 7th February 2011 Commons Chamber

The Secretary of State was asked—

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

1. What estimate he has made of the number of Sure Start children’s centres that will offer a full service in 2014-15.

[The Minister of State, Department for Education (Sarah Teather)]

The Government have ensured that there is enough money in the system to maintain the network of Sure Start children’s centres and have provided new investment for health visitors. Local authorities, in consultation with local communities, can determine the most effective way of delivering future services to meet local need. They have a duty to consult before opening, closing or significantly changing children’s centres and to make sufficient provision.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I thank the Minister for that answer, but in my local authority area, Tameside, the early intervention grant that funds Sure Start faces a cut of 12%. Does she agree that such a cut could be a false economy, because one of Sure Start’s great benefits is that it saves the state further expenditure down the line by improving outcomes for young people through early intervention? What studies are her Department carrying out to estimate the likely future costs of cutting early intervention now?

[Sarah Teather]

We have provided a flexible grant because that is what local authorities said they wanted. Obviously, that includes money for Sure Start, but it also includes money for other things. Local authorities are the best people to make these decisions on the ground. Localism is the right way forward regardless of the circumstances, but when finances are tight there is a particular requirement on us to ensure that decisions are taken closest to where the impact is felt, because we are much more likely to get high-quality decisions in that way.

[Damian Hinds (East Hampshire) (Con)]

Does my hon. Friend agree that the early years provision plays a vital part in social mobility? How many two-year-olds does she expect will benefit from the programme to extend that to disadvantaged children?

[Sarah Teather]

I absolutely agree that the early years play a vital role in social mobility, which is precisely why the Government have chosen to prioritise funding in this way. Tomorrow, we will debate the Second Reading of the Education Bill, whose first clause provides the enabling powers for us to regulate so that we can help an extra 130,000 two-year-olds to experience high-quality early education by the end of the spending period.

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

Does the Minister agree that there is an inherent contradiction in a policy that announces that the Government will protect the original local Sure Start programmes in the most deprived areas, which I was proud to develop from 1997, while, with the so-called “localism programme”, saying, “It is entirely the fault of the local authorities,” which have been denied the money to maintain those programmes in the first place?

[Sarah Teather]

The right hon. Gentleman is right to be proud of the Sure Start children’s centres, which are an excellent programme. That is precisely why the Government have made sure that the money is there in the early intervention grant, and why we have built on that by providing extra money for health visitors, through the Department of Health, and more money for things such as the family-nurse partnerships, which we know work on the ground and are often delivered through children’s centres. I believe that localism is the right way forward. Good local councils are thinking creatively about, for example, how to ensure that they can cluster their centres and merge their back offices, and how to prioritise outcomes for children—it is outcomes that matter.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my hon. Friend envisage opening up the assets of these underused children’s centres to community groups to expand the big society?

[Sarah Teather]

In some areas, local authorities are very good at making full use of the assets, which are often fantastic buildings, but in other areas they are not as good. I hope that providing the flexible fund will mean that local authorities start to think more creatively about how they can join services together and perhaps provide support for older children. By providing that kind of flexibility we enable local authorities to make the right decisions for their areas.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

Recent research by the Daycare Trust and 4Children shows that, despite promises made by the Prime Minister and his deputy, 250 children’s centres are expected to close within the year, with hundreds more at risk of closure or big cuts in the services they provide. Hundreds of thousands of parents across the country are deeply worried about this, but all we get from the Minister is glib indifference. I read this morning that the Secretary of State has announced that funding for music will be maintained, so, incidentally, the Government feel that that is worth ring-fencing whereas Sure Start is not. To paraphrase my right hon. Friend the Member for Birkenhead (Mr Field), does the Minister not think that parents deserve much more than having to listen to the Secretary of State playing his fiddle while Sure Start burns around him?

[Sarah Teather]

That was a long rant and I struggled slightly to find the question in it. The important thing to say about the survey that 4Children did is that it is about people’s concerns and not about decisions that have been taken—decisions have not yet been taken. We are saying to local authorities that we want them to focus on outcomes for children and families. We are trying to encourage them to do that by holding back some money for payment by results and we are developing that scheme with the sector at the moment. Good local authorities that make sensible restructuring decisions will be able to benefit from that, but if they make decisions that jeopardise outcomes for children, they will not be able to benefit from it.

[David Wright (Telford) (Lab)]

2. When he plans to inform colleges of the size of the discretionary learner support fund to replace the education maintenance allowance; and if he will make a statement.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

We plan to allocate the new funding replacing the education maintenance allowance in line with the usual timetable for overall funding allocations for schools and colleges, which will be made in the spring.

[David Wright]

The real concern is about transitional arrangements. Will the Minister explain what discussions he has had with colleges about the transitional arrangements, particularly for students who have already started their course and want to continue receiving funding support while they carry on with it?

[Mr Hayes]

The hon. Gentleman is right that transitional arrangements are important. We are in discussions with colleges and their representative bodies to ensure that there is not the kind of problem that he identifies. We are determined to allocate these resources in the way that addresses disadvantage most cost-effectively and ensures that the worse-off are not still worse off as a result of the changes.

[Bob Russell (Colchester) (LD)]

The previous Labour Government left 3.9 million children living below the poverty line. Can the Minister give an assurance that when the children abandoned by Labour eventually arrive at further education colleges, they will all receive a discretionary learner support fund grant?

[Mr Hayes]

As I have said, we will ensure that those who are worse off are not disadvantaged by the system. Redistributing advantage and ensuring that there is a change in the prospects and opportunities for those who begin worse off is at the heart of all that this Government do. We are the champions of social justice—past, present and future.

[Mr Iain Wright (Hartlepool) (Lab)]

In last month’s debate on the education maintenance allowance, the Secretary of State pledged that any replacement scheme for EMA would cover the costs of transport and equipment and would support young people with special educational needs or learning disabilities as well as those with caring responsibilities, teenage parents and those who were eligible for free school meals when at school. Given that research from the House of Commons Library indicates that such pledges would have a first-year cost of £480 million and ongoing costs of £420 million a year, will the Minister confirm, on behalf of the Secretary of State, that this is the budget for EMA’s successor and that he stands by the pledges he made to the House?

[Mr Hayes]

The hon. Gentleman is far too experienced as a Minister to expect me to make that kind of on-the-hoof promise. Equally, he knows that we are determined to amend this scheme to allow it to be targeted using the discretion to do the kind of things that he highlighted. After all, his own shadow Secretary of State has said:

“I have never set my face against changes or savings to the EMA scheme.”—[Official Report, 19 January 2011; Vol. 521, c. 863.]

[John Stevenson (Carlisle) (Con)]

3. What plans he has to raise standards of the teaching profession; and if he will make a statement.

[The Secretary of State for Education (Michael Gove)]

There is nothing more important to a child’s education than the quality of their teachers, which is why I set out plans to raise the status and standards of the teaching profession in the White Paper “The Importance of Teaching”. We will focus on recruiting the best candidates to become teachers, we will improve their training and we will create more opportunities for all teachers to learn from the best.

[John Stevenson]

Will the Secretary of State reassure pupils and parents in my constituency of Carlisle that the quality of science and maths-based teaching will not suffer as the academies programme continues successfully to expand?

[Michael Gove]

I am delighted to be able to reassure my fellow Aberdonian that the quality of education that children in Carlisle enjoy will continue to improve. I have had the opportunity to visit some of the superb academy provision in his constituency. I know, and I am sure that every right hon. and hon. Member will be pleased to know, that we will guarantee an enhanced level of support for graduates who are scientists or mathematicians who wish to enter teaching in order to ensure that the subjects that will help to equip our children for the 21st century are given the boost they need.

[Kevin Brennan (Cardiff West) (Lab)]

I know the Secretary of State will want to acknowledge that, thanks to Labour’s reforms, we already have the best generation ever of teachers—that is according to Ofsted. He says in his White Paper that quality teacher training is vital, but he is allowing taxpayers’ money to be used to employ unqualified individuals to teach children in his so-called free schools. If having well-qualified teachers is vital for some schoolchildren, why is it not essential for all?

[Michael Gove]

We are making sure that all children have access to improved quality of teaching by ensuring that we reform initial teacher training in a way that builds—yes—on some of the successes that we have seen in the past. We are also ensuring that new teaching schools are established. Many of these will be free schools and many higher education institutions, including the university of Cumbria, which is represented by my hon. Friend the Member for Carlisle (John Stevenson), are playing a role in helping to improve teacher training. Thanks to the expansion of Teach First, which the previous Government—yes—supported, but not as generously as we are doing, there are more talented teachers everywhere. I was delighted to be able to share a platform and a room with the hon. Member for Hartlepool (Mr Wright) on Friday, when we signalled that Teach First was expanding into the north-east of England, something that was never accomplished under the previous Government, but which, under this reforming and progressive Government—

[Mr Speaker]

Order. The Secretary of State will resume his seat. We are moving on to the next question.

[Graham Evans (Weaver Vale) (Con)]

4. What plans he has to improve vocational education; and if he will make a statement.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

The Government are keen to make significant improvements to vocational education, its organisation, funding and target audience—for example, through university technical colleges. Professor Alison Wolf has been commissioned to produce a report which will be published in spring 2011 and her findings will inform our determination to reinvigorate vocational education.

[Graham Evans]

How will the Government boost the number of apprentices and ensure that those who complete their training will get the status and recognition that they deserve?

[Mr Hayes]

It was Dr. Johnson who said that a lack of manual dexterity constitutes a form of ignorance. The Government are determined to boost the number of apprenticeships, which is why we have put in place funding for 75,000 more adult apprenticeships and 30,000 more apprenticeships for young people. Today, in The Times—I know you will have seen it, Mr Speaker; others may not have done—we have for the first time celebrated the achievements of those who achieved higher apprenticeships in 2010. This ensures that apprentices and all those who aspire to and achieve vocational qualifications get the status and recognition that they deserve.

[Mr Speaker]

I am grateful to the Minister.

[Pat Glass (North West Durham) (Lab)]

Can the Minister tell the House what evidence—the operative word is “evidence”—supports his decision to limit the curriculum so severely and thereby exclude many thousands of young people from accessing the curriculum successfully?

[Mr Hayes]

The evidence is that we have commissioned a report on vocational learning, we have put in place funding for apprenticeships, and we are determined to ensure that the status of those vocational courses is maintained and grown. The evidence is simply the evidence of the Government’s commitment and record so far in office. That is good enough for me. It should be good enough for the hon. Lady.

[Andrew Selous (South West Bedfordshire) (Con)]

5. What qualifications he expects to be required for pupils to gain entry to university technical colleges.

[The Minister of State, Department for Education (Mr Nick Gibb)]

University technical colleges will be 14-to-19 institutions, with 14 being the normal age of entry. We do not expect pupils to be required to have any qualifications to gain entry to a university technical college.

[Andrew Selous]

I share the hope that university technical colleges will indeed bring poverty-busting structural change, and I look forward to the establishment of one in Houghton Regis in my constituency. I hope my hon. Friend can reassure me that university technical colleges will not seek to exclude those who are not predicted to get brilliant GCSEs, who may well have just the right attitude to shine in a university technical college.

[Mr Gibb]

I am happy to provide that reassurance, and to pay tribute to my hon. Friend for his active support for the central Bedfordshire UTC proposals. UTCs will be required to adopt fair and open admission arrangements. They will give priority to the same statutory groups as maintained schools, children with a statement of special educational needs and children in care, and they will not be able to require that children have reached certain levels of attainment or that they have specific qualifications in order to qualify for admission. UTCs are for young people of all abilities.

[Mr Denis MacShane (Rotherham) (Lab)]

I welcome the proposal, because we have in this country almost a contempt for technical qualifications and for engineering. Turning that around will require giving orders to the professional organisations and increasing the role and status of people coming out of those courses. Perhaps we might have one or two members of the Cabinet who are thus qualified, even if their only engineering qualification is engineering their financial blind trust to hide where their money is.

[Mr Gibb]

The right hon. Gentleman is right to support this development. We intend to have 12 UTCs up and running by the end of the spending review period. He is also right to emphasise the importance of science, technology, engineering and maths, which the Government are committed to.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I share my hon. Friend’s enthusiasm for UTCs, but is he confident that the English baccalaureate will not have a cramping impact on the power of innovation in institutions such as UTCs, so that we can ensure the most appropriate education for all their pupils?

[Mr Gibb]

I am grateful to my hon. Friend for that question. The English baccalaureate is designed to leave ample time in the curriculum for other subjects, including vocational subjects. In the countries around the world that have the best technical education systems, core academic subjects are taught alongside, not instead of, technical or vocational subjects until their students reach the age of 15 or 16. Subjects such as modern languages are critical for the technical and vocational success of young people.

[Ann Coffey (Stockport) (Lab)]

6. What steps he plans to take to reduce the incidence of children going missing from children’s homes.

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

All local authorities are required to have procedures and processes in place to minimise the risk of children in care going missing. In April, we will bring in revised national minimum standards for children’s homes, which will strengthen the national guidance on this issue.

[Ann Coffey]

In Greater Manchester, more than half of all missing incidents involve children from children’s homes. According to a recent Barnardo’s report, many of those children are at risk from paedophile and criminal gangs. Will the Minister consider issuing statutory guidance to local safeguarding boards, asking them to monitor all incidents of children going missing and share that information with other agencies, such as Ofsted, so that action can be taken to reduce the number of children going missing and the risk to them?

[Tim Loughton]

The hon. Lady makes a good point and I pay tribute to her work as chair of the all-party group on runaway and missing children and adults. I am looking closely at the Barnardo’s report with the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire). This is a serious issue, but, without being complacent, I should say that the incidence of children running away from children’s homes has been reducing over the past few years. The figures are calculated on the basis of those who are missing for more than 24 hours, but in fact most children return within 48 hours. It is something that I will continue to look at.

[Diana Johnson (Kingston upon Hull North) (Lab)]

7. What assessment he has made of the effect on music education in schools of reductions in his Department’s funding for music services.

[The Secretary of State for Education (Michael Gove)]

I am happy to inform the House that this morning we published Mr Darren Henley’s review on music education, and I am hugely grateful to him for his in-depth consideration of the issues and for the realistic and practical measures he has put forward. Following that report, I can now confirm that funding for music education in 2011-12 will be the same as it was in 2010-11—£82.5 million. That is not a cut; it is a very good settlement for music services, which is consistent with our broader strategies for school autonomy and deficit reduction.

[Diana Johnson]

I, too, pay tribute to the work of Darren Henley, who has at heart the need to ensure that young people get a good music education. Labour’s £332 million investment in school music helped children from poor and average backgrounds access good education in music. Will the Secretary of State confirm that the £82.5 million, although ring-fenced, is a real-terms cut? Local authorities are already slashing music services in their areas, so rather than blowing his own trumpet, should the Secretary of State not admit that this is really a cut, just like his cut to school sport?

[Michael Gove]

Once again, we have had a superb pun: we had trumpets from the Back Benches and fiddles from the Front Bench, but what a pity they are not singing from the same hymn sheet as Darren Henley, local authorities and all those who care about music. From Alfie Boe the tenor, to Julian Lloyd Webber the cello player, everyone in the world of music is saying that today is good news for all children who want to learn more about music, including your own, Mr Speaker.

[Mr Speaker]

I am very grateful.

[Richard Fuller (Bedford) (Con)]

Bedfordshire Orchestral Society has an enviable record of promoting music in schools, but it is reliant on funding from two local authorities. Even ahead of today’s good news from the Secretary of State, Bedford borough council has committed funding, so will my right hon. Friend join me in encouraging Central Bedfordshire council to do likewise?

[Michael Gove]

When Central Bedfordshire council hears that my hon. Friend and I are both on the case, I am sure that it will be only too happy to join in and become as one in harmony with us both.

[Toby Perkins (Chesterfield) (Lab)]

Once again, there is a chasm between rhetoric and reality: the big announcement is a cash freeze, which in real terms is a cut. It is another example of confused decision making. The right hon. Gentleman promises to increase access to music, but the cuts mean that 60% of schools, as surveyed by the National Association of Music Educators, are cutting music provision this year. Does he accept that, unless music is protected and ring-fenced not just for one year but into the future, all his rhetoric will lead to is less music provision in deprived areas?

[Michael Gove]

There is a huge chasm between rhetoric and reality: the chasm between the apocalyptic rhetoric that we heard from the Opposition Front Benchers and their sock puppets elsewhere, and the reality of increased funding for those areas that need it most, and new funding for the teach music first scheme, ensuring that some of our most talented musicians from leading music schools and conservatoires work in our most challenging schools to ensure that every child has an opportunity, which I, like the hon. Member for Kingston upon Hull North (Diana Johnson), believe should be extended to all. It is only under this Government, with this announcement on school music and our pupil premium, that we are at last ensuring that money goes to those children who need it most, instead of being wasted on the quangos and bureaucrats that characterised the past 13 wasted years.

[Lorraine Fullbrook (South Ribble) (Con)]

8. What steps he is taking to improve the quality of the work force in early years education.

[The Minister of State, Department for Education (Sarah Teather)]

The Government are committed to taking steps to improve and invest in the quality of the early education and child care work force. We continue to invest in the work force by making funding available via the new early intervention grant, and by committing to fund the early years professional status and new leaders in early years programmes in 2011-12. We will publish proposals to support further improvement in the quality of the work force in the spring.

[Lorraine Fullbrook]

Last week, when opening the Hesketh Bank children’s centre in my constituency, I saw at first hand how essential the excellent staff are in helping families and children in the local community. How will the new leaders programme and the early years professional status programme ensure that more talented and committed people work in early years education?

[Sarah Teather]

I am very pleased to hear about the excellent work of the children’s centre staff in Hesketh Bank. The two programmes to which my hon. Friend refers will focus specifically on professionalism in the early years work force. The early years professional status programme enables people who already work in the sector to have their experience acknowledged, their skills refreshed and their learning updated. The new leaders programme is based around the Teach First and Teach Next programmes and designed specifically to bring into the early years work force talented people, with the potential to be great leaders, who might not otherwise have thought about working in the sector.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

The Minister will be aware of several distressing cases recently of children in early years care being abused by staff. Will she commit, as part of that development, to ensure greater child protection training for early years workers, so that they not only know what is happening to children in the home, but can construct working practices that ensure such abuse cannot take place in the future?

[Sarah Teather]

I am grateful to the hon. Lady for raising that matter, which has been very distressing to follow. She will be aware that no prosecutions have yet taken place, but I have asked Dame Clare Tickell to undertake a review for the Government of the early years foundation stage, and one of the things she is looking at is child protection and welfare.

[Caroline Nokes (Romsey and Southampton North) (Con)]

9. Whether he plans to include religious education in the humanities section of the English baccalaureate.

[The Secretary of State for Education (Michael Gove)]

Religious education did not count towards the humanities element of the English baccalaureate in the 2010 performance tables, because it is already a compulsory subject. One intention of the English baccalaureate is to encourage wider take-up of geography and history in addition to, rather than instead of, compulsory RE.

[Caroline Nokes]

I thank the Secretary of State for that response, but does he think that the exclusion of religious education from the English baccalaureate might dramatically reduce the number of students studying the RE full course at GCSE and have a knock-on and detrimental effect on the number of candidates for religious education teacher training?

[Michael Gove]

I am very grateful to my hon. Friend for making her point. We all recognise that high-quality religious education is a characteristic of the very best schools—faith schools and non-faith schools. However, the decision to include geography and history in the humanities section of the English baccalaureate will mean that those subjects, which have seen a decline in the number of students pursuing them, will at last see an increase, alongside modern foreign languages. As the Minister of State, Department for Education, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb) pointed out, the English baccalaureate is intended to be a suite of core academic qualifications, which every child can be expected to follow alongside other qualifications, whether vocational, RE or others.

[Andy Burnham (Leigh) (Lab)]

Can the Secretary of State tell the House on what research or evidence he has based his selection of subjects in the new English baccalaureate?

[Michael Gove]

Yes. The research and evidence that I undertook was to look at what the highest performing education jurisdictions do. When the OECD published its table on how our country had been doing in education over the past 10 years, I was struck to see that under Labour’s stewardship we had slipped in the international league tables for English, for mathematics and for science. I was also struck by the fact that the numbers of students studying modern foreign languages, history and geography were declining. I was particularly struck by the fact that only last week the Russell group said that these are the subjects which the best universities expect of students if they are to go on and prosper and achieve the level of social mobility that sadly eluded us when the right hon. Gentleman was in government.

[Andy Burnham]

The Secretary of State mentions the OECD, so let me quote from last year’s PISA—programme for international student assessment—report, which says:

“Most successful school systems grant greater autonomy to individual schools to design curricula and assessment policies”.

That is in direct contradiction to what he has just said. I support the right of every child to take these five GCSEs, but it is a narrow selection, and not right for everybody, and the way in which he has introduced it is restricting student choice right now. Many feel that it is not a fair way to judge all children and all schools, suggesting that some are second best. So is he really saying to young people and employers today that dead languages are more important than business studies, engineering, information and communications technology, music and RE? Will he not listen to the call from the Chair of the Select Committee, made just a few moments ago, to allow a broader and more flexible English baccalaureate?

[Mr Speaker]

Order. I am sorry, but these questions are becoming excessively long. I hope that we can have a pithy response, and I am sure we will, from the Secretary of State.

[Michael Gove]

I am surprised that the right hon. Gentleman has the brass neck to quote the PISA figures when they show that on his watch the standard of education which was offered to young people in this country declined relative to our international competitors. Literacy, down; numeracy, down; science, down: fail, fail, fail. I am surprised that he has the brass neck to stand here and to say that working-class children should not study modern foreign languages, should not study science, should not study history and should not study geography. If it is good enough for the likes of him, why should it not be good enough for working-class children elsewhere? Why is he pulling up the drawbridge on social mobility? Why is he saying that they are only fit to be hewers of wood and drawers of water rather than university graduates like you and me, Mr Speaker? Rank hypocrisy!

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

While I entirely accept the Secretary of State’s point that RE is compulsory, it is not obligatory to sit the GCSE. Does he agree that the very many faith schools where RE is compulsory are thereby penalised in the calculation of their English baccalaureate achievement?

[Michael Gove]

I appreciate the care with which my hon. Friend puts his question. I also appreciate the fact that he has been a very strong advocate for faith schools in his own constituency, including St Mary’s, whose cause he has championed with particular eloquence. Many schools will want to offer RE as a GCSE, and indeed we would encourage them to do so, but the core element of the English baccalaureate relates to five subjects which we believe are the essential academic knowledge that students should be able to master. The news from the Russell group of universities last week that the subjects that we have chosen for the English baccalaureate are the subjects that they expect students to have if they are to go on to leading universities ensures that there is an appropriate match between schools and universities in advancing social mobility rather than seeing it decline, as happened over the past 13 years.

[Nick Smith (Blaenau Gwent) (Lab)]

10. What steps he is taking to ensure the provision of good quality youth services.

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

I should point out that the Department for Education does not have responsibility for the provision of youth services in Wales. However, we are working to modernise and improve the quality of services for young people in England with our stakeholders, including, of course, young people themselves. The early intervention grant is providing more than £2 billion per annum to local authorities’ funding for early intervention services, including for young people. We secured £134 million in capital funding for the remaining myplace projects. The Government are also launching the national citizen service programme, which over time will offer all 16-year-olds a shared opportunity for personal and social development, community service and engagement.

[Nick Smith]

Youth services around the country are anticipating crisis as councils are forced to pass on savage cuts, and the Government seem unwilling to protect these vital services. Will the Minister confirm that the youth service, which provides services week in, week out, has a distinct and specialist role and will not be replaced by the national citizen service programme?

[Tim Loughton]

I agree with the hon. Gentleman about the importance of good quality youth services, particularly those that are focused on the people who will get the most from them. To reiterate the point made by the Minister of State, my hon. Friend the Member for Brent Central (Sarah Teather), it is the duty of local authorities to chose how best to spend their funds. National citizen service funding is a separate funding stream that was negotiated with the Treasury, and it does not impact on the funding for youth services from the Department for Education.

[Nicky Morgan (Loughborough) (Con)]

11. What recent assessment he has made of school standards in Loughborough constituency.

[The Minister of State, Department for Education (Mr Nick Gibb)]

In 2010, at key stage 2, 72% of pupils in Loughborough achieved level 4 or above in English and maths combined, compared with 73% in England as a whole. In 2010, at key stage 4, 56% of pupils in maintained schools in Loughborough achieved five or more GCSEs at grade A* to C, including English and maths, compared with 55% in maintained schools in England as a whole.

[Nicky Morgan]

I thank the Minister for that reply. The GCSE results in Loughborough for the past few years have consistently been below the English average. Locally, many people attribute that to the fact that pupils change school at 14 in Leicestershire, which unsettles pupils and is difficult for teachers. Is he aware that many people in my constituency would like that system to change? Will the Department listen to head teachers on that issue?

[Mr Gibb]

I pay tribute to my hon. Friend’s work in Loughborough. When she and I visited Humphrey Perkins high school and Loughborough Church of England primary school together before the election, it was clear that she was passionate about education and raising standards. I know that there is a widely held view in Loughborough that changing school at 14 can have a negative impact on GCSE results at 16. Improving standards must be the driver for local restructuring. I know that that is my hon. Friend’s rationale for seeking to change the system in Loughborough. Lord Hill has a meeting with her and some teachers from Loughborough tomorrow—I mean literally tomorrow, not the parliamentary tomorrow—and I know that he will be keen to explore these issues in as helpful a way as possible.

[Richard Harrington (Watford) (Con)]

12. What steps he plans to take to strengthen the teaching of core subjects in schools.

[The Minister of State, Department for Education (Mr Nick Gibb)]

The White Paper “The Importance of Teaching” emphasises the importance of high quality teaching in the core subjects. We are introducing the English baccalaureate, which recognises achievement in the core subjects of English, maths, science, a humanity and a foreign language. It is intended to ensure that children receive a broad and balanced education, with time in the curriculum for vocational and creative subjects. We are taking steps to strengthen the teaching of reading through the use of systematic synthetic phonics.

[Richard Harrington]

I am sure the Minister is aware that in 2009, fewer than one in 25 children who were on free school meals took chemistry or physics, one in five took history, and fewer than 15% took geography or French. What plans does he have to ensure that children from poorer backgrounds get access to a proper academic education?

[Mr Gibb]

I share my hon. Friend’s concern. That is why we have introduced the English baccalaureate. We are concerned that the number of pupils who currently receive a broad education in core academic subjects is far too small. That is particularly the case for pupils in disadvantaged areas. The English baccalaureate is designed to recognise the success of pupils who gain GCSEs or International GCSEs at grades A* to C across a core of academic subjects: English, maths, a humanity, the sciences and a language. We want to encourage more people to study those core subjects and to give all pupils the opportunity to study them, regardless of the school.

[Kelvin Hopkins (Luton North) (Lab)]

Many youngsters achieve good grades in GCSE maths without ever having studied algebra. That puts them at a disadvantage when they want to pursue mathematics beyond GCSE. Should algebra not be a vital part of GCSE maths?

[Mr Gibb]

Yet again, the hon. Gentleman says something with which I wholeheartedly agree. He is passionate about raising standards in our schools, as are we. That is why we recently announced the setting up of a review of the national curriculum. An expert advisory panel of head teachers from around the country will consider English, maths and science as the first part of the review.

[Stuart Andrew (Pudsey) (Con)]

13. How many applications his Department has received to establish free schools for children with special educational needs.

[The Secretary of State for Education (Michael Gove)]

My Department has received a number of proposals from groups and individuals interested in establishing free schools wholly or mainly catering for children with special educational needs. We have received more than 240 applications overall.

[Stuart Andrew]

It has been a pleasure of mine to work with two groups that are hoping to take advantage of the policy. One of them, the Lighthouse project in Leeds, this weekend submitted an excellent application to open a school for young people suffering with autism spectrum disorders. It is eager to do so in the autumn, but after what it has heard from the Department, it is concerned that there may be some delays. It does not want to lose momentum. Will my right hon. Friend agree to meet me and representatives of that organisation to see what we can do to progress the application?

[Michael Gove]

I would be delighted to meet my hon. Friend and the Lighthouse group. I have to stress that it is important to ensure that all the issues surrounding the establishment of any new school are successfully navigated. Opening any free school in September 2011 is a challenging timetable. Under the last Government it would take between five and 10 years for a new school to open, so it is remarkable that so many may open within a year. I will look closely at the matter, but I suspect that given the complexity of some of the issues involved we may not be able to open in September 2011. However, let us discuss it and ensure that we can support—

[Mr Speaker]

Order. May I gently ask the Secretary of State to face the Chamber, so that I can be the full beneficiary of his eloquence?

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will the Secretary of State bear in mind the fact that successful special educational needs provision depends very much on integration with other schools? That was the finding of the former Select Committee on Children, Schools and Families. We very much support good SEN provision, but it must be integrated with the local schools that take other kinds of children.

[Michael Gove]

I absolutely recognise that when we are talking about children with special educational needs, there is such a broad and complex spectrum that one solution will not fit all children. I had the opportunity to visit Redcar community college on Thursday, and I saw there an imaginative proposal to co-locate Kirkleatham Hall special school with that college. That seems to be the right solution there, but different solutions will apply elsewhere. I am very grateful to the hon. Member for Redcar (Ian Swales) for his impassioned advocacy of those two schools.

[Dan Rogerson (North Cornwall) (LD)]

Further to the Secretary of State’s answer, is he open to suggestions for replacing provision offered by pupil referral units in some parts of the country? Outcomes at such units are variable across the country.

[Michael Gove]

My hon. Friend makes a very good point, and one thing that the Education Bill will do is make it easier to ensure that we can have high-quality provision for students who are excluded for whatever reason.

[Mrs Mary Glindon (North Tyneside) (Lab)]

14. Whom his Department plans to consult in its review of home-to-school travel; and when that review will be completed.

[The Secretary of State for Education (Michael Gove)]

My Department is reviewing home-to-school transport policy, which has remained largely unchanged since the Education Act 1944, when the social, economic and education landscape was very different. As part of our review, we are considering how best practice can be spread to all local authorities. We will make further announcements in due course.

[Mrs Glindon]

North Tyneside’s Tory-led council is currently reviewing its home-to-school travel policy to include a proposal to stop free and subsidised travel for children who travel more than 3 miles to school. As that will affect more than 400 pupils who travel from across the borough to St Thomas More RC high school, which is the only faith school in North Tyneside, will the Secretary of State please make a statement to support my constituents and their children against that unfair proposal?

[Michael Gove]

I am very grateful to the hon. Lady for raising that issue. It is important that we support the exercising of school choice, and that we support faith schools and the great schools of North Tyneside, such as Whitley Bay high school, whose headmaster I had the opportunity to talk to on Thursday when I visited the north-east. I will look into the specific situation that the hon. Lady mentioned, but of course one thing that all local authorities are dealing with is the drastic economic inheritance bequeathed by the last Labour Government.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Will the Secretary of State, who I know is a friend of North Yorkshire and a frequent visitor, look carefully at the proposals that North Yorkshire county council is coming up with for a similar review, bearing in mind that the distances that children have to travel cannot be covered by anything other than either bus or car?

[Michael Gove]

I am very well aware of the specific challenges that North Yorkshire has in helping to ensure that children can exercise school choice and go to the most appropriate local school. I know that it is one of the most successful local authorities in terms of both value for money and school performance, so I look forward to working with my hon. Friend and the local authority to come to the right outcome.

[Mr Philip Hollobone (Kettering) (Con)]

15. What steps he is taking to improve school discipline in (a) Kettering constituency, (b) Northamptonshire and (c) England.

[The Minister of State, Department for Education (Mr Nick Gibb)]

Raising standards of behaviour in our schools is a key priority for the coalition Government. It goes to the root of how we raise standards, and it lies at the heart of our determination to close the attainment gap between those from poor and wealthier backgrounds. The Education Bill, which we will debate tomorrow, sets out reforms to tackle poor behaviour, making it easier to impose no-notice detentions, extending search powers for items that disrupt teachers and making it easier for heads to expel violent and persistently disruptive pupils.

[Mr Hollobone]

Will my hon. Friend ensure that, under this Government, badly behaved pupils who do not want to learn cannot damage the education of hard-working pupils who do?

[Mr Gibb]

My hon. Friend makes a good point. It is not just the rights of the pupils who disrupt the class that are important—although they are—but those of the overwhelming majority of students in class, which we must also protect.

[Hugh Bayley (York Central) (Lab)]

16. What estimate he has made of the savings to accrue from terminating education maintenance allowance payments in September 2011 for students who are already part of the way through a two-year programme of study.

[The Secretary of State for Education (Michael Gove)]

The cost of continuing to pay EMA from September 2011 for a further year to all students currently receiving it is estimated at £300 million, excluding the costs of administration.

[Hugh Bayley]

York college tells me that, last September, on the Secretary of State’s watch, 650 students started two-year courses in the expectation of getting an education maintenance allowance for two years. To continue it would cost less than £500,000. Will the right hon. Gentleman reconsider?

[Michael Gove]

I am very grateful for the moderate and considered way in which the hon. Gentleman puts his point—I know how passionate he is about further education. [Interruption.]

[Mr Speaker]

Order. Hon. Gentlemen should not yell from a sedentary position. I want to hear the Secretary of State’s answer, and I hope that the House does, too.

[Michael Gove]

Thank you, Mr Speaker. It is ironic that we were just discussing poor behaviour and people in class disrupting those who want to learn. I am keen to work with the hon. Member for York Central (Hugh Bayley), and college principals in particular, to ensure that our new, enhanced learner support fund can help all those vulnerable young people who need support to stay in education and learning.

[George Eustice (Camborne and Redruth) (Con)]

When the Secretary of State assesses the size of the discretionary learner support to be made available to each college, will he consider at least making one of the criteria the number of second-year students who currently receive EMA, to assist colleges and students in the transition to the new system?

[Michael Gove]

That is a constructive suggestion, which I will consider as part of the review.

[Mr Andy Slaughter (Hammersmith) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Education (Michael Gove)]

I am pleased to announce that, on 1 February, more than another 30 schools converted to academy status, meaning that there are now more than 440 academies. Tomorrow we will debate the Education Bill, which will give all Members an opportunity to consider the further advance of the movement, which gives all head teachers more autonomy, and promises all children the raising of standards. The Education Bill will also provide all Members with an opportunity to vote for measures that will ensure better discipline and higher standards in every school.

[Mr Slaughter]

The Schools Minister, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), is fond of saying that there is adequate money in the early intervention grant to fund the network of children’s centres. An education authority such as Hammersmith and Fulham is cutting by half in one year the children’s centre budget, closing nine out of 15 centres, including phase 1 centres in deprived areas, and sacking 50 staff—does that give the Secretary of State and the Minister pause for thought? If so, what will they do about education authorities that are wrecking children’s centres?

[The Minister of State, Department for Education (Sarah Teather)]

The hon. Gentleman has expressed his concern to me about the position in his area, and we discussed it last week. I will say what I said in answer to other hon. Members: good local authorities are restructuring with care, and looking at methods of clustering centres to merge back-office functions, because they know that that is the way to benefit from the Government’s work on payment by results.

[Andrew Selous (South West Bedfordshire) (Con)]

T3. One of my local head teachers said to me last year that it can take up to a year to move a teacher who is not up to their particular responsibilities. Given that that could be a critical year for the children concerned, what steps can my right hon. Friend take to speed up that process?

[Michael Gove]

No one is served when people who should not be in the classroom continue there. It increases the burden on other professionals and deprives children of the highest quality education. We are reviewing the professional standards for all teachers to make it easier for head teachers to ensure that staff who underperform are given the support that they need to improve or to move on.

[Mr Dave Watts (St Helens North) (Lab)]

T6. Given that the cuts in EMA will affect more than 2,600 low-paid families in my constituency, is the Minister not ashamed of that policy? What will he do to increase the top-up learner funds to help at least some of those families?

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

I have made it clear that we are absolutely determined to ensure that the worst-off are not disadvantaged by the new arrangements. However, I believe that there is a strong case for greater discretion to target some of things that Opposition Front Benchers identified as salient in helping people to achieve their best.

[Mr Christopher Chope (Christchurch) (Con)]

T4. Does my right hon. Friend agree that one way of getting more capital into free schools would be to enable them to obtain it on the open market by allowing them the freedom to make a profit, as they can in Sweden? When will my right hon. Friend have the courage of his convictions and enable free schools to have the same freedoms as they have in Sweden?

[Michael Gove]

It is always a pleasure to hear the radical proposals of my hon. Friend, whose stewardship of money when he was a councillor in Wandsworth and a Minister in a previous Conservative Government is a model to all. I shall look carefully at the case he makes, but the one thing that is clear is that we already know that our programme ensures that more new school places are being provided more cheaply than was the case under the previous Labour Government.

[Alison McGovern (Wirral South) (Lab)]

T7. Today is the first day of national apprenticeships week. We know that one of the most significant barriers to young people taking up apprenticeships is getting the right advice at school. In fact, there is now a confused situation, because the Government want to end Connexions and introduce an all-age service. Will the Minister explain what extra funds will be available to schools to procure advice for young people?

[Mr Hayes]

The hon. Lady is right to champion apprenticeships week. Indeed, she has personally championed apprenticeships in her constituency, and she knows that the Government are having ongoing discussions to see how we can help with that. It is critical that people get good, empirical, independent advice and guidance on vocational options such as apprenticeships. In the Education Bill, which the House is about to consider, we will make it a duty for schools to secure that independent, impartial advice on vocational learning.

[Dr Julian Huppert (Cambridge) (LD)]

T5. Cambridgeshire gets less school funding per pupil than almost anywhere in the country. If we received the per pupil average across England, we would have some £34 million more for education. Can the Secretary of State explain why pupils in Cambridgeshire deserve so much less money, and will he review that?

[Michael Gove]

They deserve to be treated like every other student. We are reviewing funding and will be publishing a paper in the spring to try to ensure greater equity in the allocation of schools funding.

[Bill Esterson (Sefton Central) (Lab)]

All 19 of the children’s centres in Sefton are under review. Does the Minister stand by her statement that local authorities have a legal duty to maintain a sufficient network of children’s centres? If she does, how many of Sefton council’s 19 children’s centres should it keep open to meet those legal duties?

[Sarah Teather]

The hon. Gentleman and I discussed this matter in detail when he introduced an Adjournment debate last week. I stand by my statement. Similarly, the council has a legal duty to consult before closing, opening or restructuring in its area. I am sure that it is in the middle of that consultation at the moment, and that parents will make their views very clear.

[Mr John Leech (Manchester, Withington) (LD)]

T8. Can the Secretary of State assure me that changes to education maintenance allowance will not leave college students disadvantaged compared with school sixth-formers, who will still be entitled to free school meals?

[Michael Gove]

That point is well made by my hon. Friend. We have an anomaly at the moment, whereby the position of those in colleges and those in schools is not the same. The whole thrust of our policy making has been to try to ensure a level playing field between schools and colleges. The point he makes with respect to EMA weighs heavily with my colleagues and me.

[Mrs Jenny Chapman (Darlington) (Lab)]

Staff at the Independent Safeguarding Authority in Darlington learned from The Daily Telegraph on Saturday that the vetting and barring scheme is to be significantly scaled back. What conversations has the Secretary of State had with the Home Secretary about the reduction of that scheme, which is likely to affect child protection?

[Michael Gove]

I had the opportunity to visit the hon. Lady’s constituency on Thursday, when I spoke to staff at Mowden Hall, the Department for Education headquarters in Darlington. I am pleased to say that I am the first Secretary of State to visit Darlington and Mowden Hall since the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), which is indicative of this Government’s commitment to the north-east, which was sadly not shared by the previous Administration.

A response to the Government’s review of vetting and barring will be made. The House will be informed of the details first. The one thing that we know is that the bureaucratic burden on the voluntary sector will be lifted. We will not only have a more proportionate system, but more children will be kept safe. Above all, we will ensure that volunteers and those who do so much to help in our society are given the trust that they need in order to carry on doing the wonderful work that they do.

[Michael Fallon (Sevenoaks) (Con)]

T9. Will Ministers be prepared to look again at the rather puzzling exclusion of classical civilisation from the list of humanities scored in the English baccalaureate? Is classical civilisation not a humanity?

[Michael Gove]

I am tempted to reply, “Timeo danaos et dona ferentes,” which, broadly translated, means, “Beware of geeks bearing gifts.” However, my hon. Friend is an impassioned champion of both Latin and Greek and the wider application of the classics in state schools. Latin is now on offer in more state schools than independent, fee-paying schools, and Latin and Greek are included in the English baccalaureate, along with modern foreign languages. His impassioned advocacy of classical civilisation certainly weighs with me.

[Joan Ruddock (Lewisham, Deptford) (Lab)]

I recently met some of the 229 students at Lewisham college in receipt of education maintenance allowance who told me that they had spent hundreds of pounds on equipment, IT and books. The Minister knows that there is a difference between the aspiration to be at college and sustaining attendance over a two-year period. Will he guarantee that no student in that situation will be forced to discontinue their second year because of lack of financial assistance?

[Mr Hayes]

The right hon. Lady is a champion of Lewisham college, which I have visited twice—I have laid bricks at Lewisham college, by the way, although not with any great skill. I can assure her that the places of college students, as my right hon. Friend the Secretary of State has made clear, will not be put at risk by changes we make, and we will certainly take full account of representations from her and others on that point.

[Mark Menzies (Fylde) (Con)]

T10. When will the Minister announce further details of the learner support fund, including the amounts and time scales of such support to colleges across the country?

[Mr Hayes]

My hon. Friend makes a strong case for colleges. Perhaps it is time that I put on record the fact that this Government believe that further education colleges are the unheralded triumph of the English education system. Furthermore, we will continue to give them greater discretion, greater opportunity and greater freedoms in order to allow those with the tastes and talents to pursue vocational and other kinds of learning to fulfil their potential.

[Mr Dennis Skinner (Bolsover) (Lab)]

Has the Secretary of State had a look at the letter from the headmaster of Tibshelf school explaining the difficulties of having to deal with the split school site in Bolsover and North East Derbyshire? Has he also received a letter from the Derby building company Tomlinson and Sons which expected to build the school, or does he have the same disease as the Deputy Prime Minister and stop dealing with his Red Box after 3 o’clock?

[Michael Gove]

I am grateful for that well-crafted question from the eloquent, grammar-school-educated Member for Bolsover. I am well aware that Derbyshire county council, under many years of Labour rule, did not secure value for money for the taxpayer. I am pleased that the incredibly wasteful Building Schools for the Future scheme is being replaced with a more effective way of ensuring that money goes to the front line, and I look forward in due course to visiting Bolsover and North East Derbyshire with him and the hon. Member for North East Derbyshire (Natascha Engel) in order to salute what a coalition Government are doing for a generation betrayed by Labour.

[George Freeman (Mid Norfolk) (Con)]

I know that the Secretary of State is a strong supporter of our state boarding schools, such as Wymondham college in my constituency, which is doing excellent work pioneering special needs and academy schooling in the area. As he may know, Wymondham college was recently awarded academy status in order to pursue that work. Today, however, I received a letter from the college saying that the decision has been inexplicably reversed by officials in his Department. Will he agree to meet me and a delegation of Norfolk MPs to discuss the matter?

[Michael Gove]

I have to confess myself perplexed by what my hon. Friend tells me, but of course I would be delighted to meet him. I know what impassioned advocates he and my hon. Friend the Member for South West Norfolk (Elizabeth Truss) have been for Wymondham college.

[Natascha Engel]

(North East Derbyshire) (Lab): Children, parents and their teachers were delighted last month that the Government changed their minds about scrapping school sport partnerships. Unfortunately, however, the Secretary of State forgot to reinstate the money for them. I know that he is a very busy man and it was just an oversight, but will he take this opportunity to reassure the House that he will give school sport partnerships their money back?

[Michael Gove]

I am overjoyed that in all my meetings with Baroness Campbell, the head of the Youth Sport Trust, since the announcement, she has expressed her delight that the funding that we have made available will be sufficient to ensure that the good work continues. I am reassured by her enthusiasm for this proposal, and I hope that the hon. Lady will be reassured too.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

As Ministers review policy for young people and the youth services, will they ensure that they engage with local authorities, young people themselves and the voluntary sector to ensure that no local authority withdraws youth services where, with a bit of imagination, alternatives are available?

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

My right hon. Friend makes a very good point about the importance of youth services, particularly of local authorities speaking to the people for whom those youth services are intended—young people. Not only has my Department set up a group from the voluntary sector dealing with youth issues, but a group of young people representing many of those organisations will be meeting me shortly to discuss the impact of the current situation on the charities and services in their areas.

[Ms Karen Buck (Westminster North) (Lab)]

The Minister responsible for children’s centres repeats the claim that good local authorities will merge their back-room functions and protect front-line services. Flagship Conservative council Westminster is merging back-room functions with Hammersmith, yet we expect children’s centres to face a significant reduction in staff, in the range of services and in outreach facilities, which are anticipated to fall by 40%. Is Westminster a good council?

[Sarah Teather]

I repeat that we are encouraging local authorities to focus in particular on outcomes, rather than on inputs. That is why we are beginning the process of payment by results. Local authorities will need to ensure that their services are structured in such a way that they improve outcomes for the most vulnerable children and families, otherwise they will not benefit.

[Margot James (Stourbridge) (Con)]

Will my right hon. Friend investigate the activities of the Anti Academies Alliance, which is threatening a series of political strikes against any school seeking academy status?

[Michael Gove]

I am grateful to my hon. Friend for drawing the House’s attention to the activities of the Anti Academies Alliance, a group that is sponsored by, among others, the Socialist Workers party. There are a number of politically motivated strikes that some have been contemplating. I hope that Members in every part of the House will condemn any politically motivated strike action that makes children a political plaything. I also look forward to hearing from the Opposition Front Bench a clear and unequivocal condemnation of such activity.

EU Council and North Africa

Monday 7th February 2011 Commons Chamber

15:31

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I should like to make a statement on last week’s European Council and comment on today’s review by the Cabinet Secretary of the papers relating to the release of Abdelbaset al-Megrahi, which were published at 1pm today.

The Council discussed three principal issues: first, the continuing efforts to tackle instability in the eurozone; secondly, the role of energy and innovation in delivering a comprehensive growth strategy for the EU; and, thirdly, the situation in Egypt. Let me take each in turn.

Eurozone members are quite rightly looking at ways to resolve some of the underlying problems of the euro crisis, including by strengthening economic co-ordination arrangements. My job is to protect and promote Britain’s interests. As I have said before, it is in our interests that the eurozone sorts out its problems. A strong and stable eurozone is in Britain’s interests, but in my view there are three absolute essentials for Britain.

First, we should retain our national currency and our ability to set our own monetary policy, in the UK and for the UK. Secondly, we should ensure that we are not dragged into a new mechanism for bailing out eurozone countries in future. As I described when reporting back from the last European Council, we have achieved that. Thirdly, and most complex, although we should not prevent eurozone countries from coming together to deal with the problems that they face, we must ensure that this does not compromise the single market, which is an important British success story in Europe and should remain one of our key interests. There is a danger that, in developing stronger co-ordination, eurozone countries start affecting things that are more properly part of the single market for all EU members. I made sure that this point was recognised at the Council, and I secured specific assurances to protect the single market. The statement by the eurozone countries, which will be available to Members and which we all debated, makes that clear.

Extending the single market to energy has been a long-held objective of recent Governments of all parties. Achieving that could add up to 0.8% of European GDP and mean another 5 million jobs across Europe by 2020. If we make a 20% improvement on energy efficiency by 2020, that could significantly reduce the pressure on household bills. A single market in energy is good for jobs, competition and energy security, so practical co-operation and competition with the rest of Europe on this is firmly in our national interest. The Council agreed that

“the EU needs a fully functioning, interconnected and integrated internal energy market,”

and that

“the internal market in energy should be completed by 2014”.

We also agreed that

“major efforts are needed to modernise and expand Europe’s energy infrastructure and to interconnect networks across borders.”

Britain should strongly support that, not least as we plan for the North sea offshore super-grid. The conclusions on innovation are also completely in line with what Britain supports and has been trying to achieve. Innovation and energy policy should be part of the growth strategy that we are arguing for in Europe. We will publish our own proposals before the next European Council in March, which will specifically be discussing that subject.

Next, let me turn to Egypt. I was determined that the Council would not produce one of its heavily “caveated” and sometimes rather unclear statements, and I think the declaration that we agreed is strong. First, we agreed that the Egyptian authorities should

“meet the aspirations of the Egyptian people with political reform not repression”.

Secondly, it is clear that a transition is needed to broad-based democratic government, and the declaration is emphatic that

“this transition should start now.”

The European Council was also clear that this should involve the building blocks of free and open societies and democratic institutions, such as freedom of assembly, the rule of law, freedom of speech and free and fair elections.

I believe that there is a strong case—the European statement reflects this—that the EU needs to look hard at its role in that region. We have spent billons of euros of taxpayers’ money in Egypt and neighbouring countries, with carefully crafted association agreements and action plans. We have offered funds, access to our markets and other assistance in exchange for progress on the rule of law, democracy and human rights. In Egypt, however, there has been little or no progress on torture, the judiciary, democracy or ending the state of emergency that has now lasted for 30 years. I believe that it is time for Europe to take a more hard-headed approach whereby the conditions on which we give money are real and insisted upon. I reaffirmed that message in a call at lunchtime today to Vice-President Suleiman, and urged him to take bold and credible steps to show that the transition that they are talking about in Egypt is irreversible, urgent and real.

Finally, let me say a word about the release of the Lockerbie bomber, Abdelbaset al-Megrahi, and the report that has been released today by the Cabinet Secretary. I have not altered my view, which I expressed at the time, that releasing Mr Megrahi was a very bad decision. He was convicted of the biggest mass murder in British history and, in my view, he should have died in jail. It was a bad decision, and the last Government should have condemned it rather than going along with it.

I commissioned this report during my visit to Washington last year. At the time, there was renewed controversy around the decision, a congressional inquiry into it, and calls for a bigger UK inquiry. Concerns were also being put forward, quite forcefully, in America and elsewhere that the whole release might have come about as a result of pressure by BP on the British Government to pressure the Scottish Government to make it happen. I do not believe that that is true, and this report shows that it is not true. It was a decision taken by the Scottish Government—the wrong decision, but their decision none the less. But in view of the continuing speculation in the UK and the US, I thought it right that all the British Government paperwork should be re-examined to assess whether more should be published, and I asked the Cabinet Secretary to do just that.

That is what Sir Gus O’Donnell has now done. In order to address the concerns that were being expressed, he was asked to look at three specific areas. First, whether there was any new evidence that the British Government directly or indirectly pressured or lobbied the Scottish Government for the release of Megrahi; secondly, whether there was pressure placed on the Scottish Government by BP for the release of Megrahi; and, thirdly, whether the Libyans were told that there were linkages between BP’s investment and the release of Megrahi, either under the prisoner transfer agreement or on compassionate grounds.

The report and all the paperwork, running to 140 pages, have been placed in the Library of the House. All decisions on the declassification and publication of papers belonging to the previous Administration were of course taken independently by the Cabinet Secretary. Under the convention covering papers of a previous Administration, he has consulted the appropriate former Ministers and the former Prime Minister. Sir Gus was assisted by the former Information Commissioner, Richard Thomas, to provide an independent validation. He saw all the paperwork, redacted and un-redacted, and his job was to advise the Cabinet Secretary on whether his report and the documents now being published were consistent with the materials that were reviewed. He was also tasked with determining whether this was a fair and accurate account of events. He is content on both counts.

The Cabinet Secretary concludes that the former Government were clear that any decision on Mr Megrahi’s release or transfer under the prisoner transfer agreement was one for the Scottish Government alone to take. He finds that none of the material he reviewed contradicts anything contained within the former Foreign Secretary’s statement to the House in October 2009. He makes the same finding with respect to the current Foreign Secretary’s letter to Senator Kerry in July last year and with respect to statements made by the former Prime Minister on this matter. He notes that it is evident that the Libyans made explicit links between progress on UK commercial interests in Libya and the removal of any clause on the prisoner transfer agreement whose effect would be to exclude Megrahi from it. He notes that after Megrahi had been diagnosed with terminal cancer in September 2008, the then Government’s policy was based on an assessment that UK interests would be damaged if Megrahi were to die in a UK jail.

The Cabinet Secretary finds—and this is a key point:

“Policy was therefore developed that HMG should do all it could, whilst respecting devolved competences, to facilitate an appeal by the Libyans to the Scottish Government for Mr Megrahi’s transfer under the PTA or release on compassionate grounds. . . as the best outcome for managing the risks faced by the UK”.

One of the Foreign Office papers released today makes it plain that

“Facilitating direct contact between the Libyans and the Scottish Executive is a key part of our game plan on Megrahi”.

Another Foreign Office paper from January 2009 states:

“We now need to go further and work actively, but discreetly, to ensure that Megrahi is transferred back to Libya under the PTA or failing that released on compassionate grounds.”

Frankly, I believe this tells us something that was not made clear at the time. It goes further than the account that the former Prime Minister and the former Foreign Secretary gave, as we were not told about facilitating an appeal, facilitating contact or a game plan. Indeed, the Cabinet Secretary’s report says:

“Policy was therefore progressively developed that HMG should do all it could, whilst respecting devolved competences, to facilitate an appeal by the Libyans to the Scottish Government for Mr Megrahi’s transfer under the PTA or release on compassionate grounds. . . as the best outcome for managing the risks faced by the UK.”

Hon. Members will be able to study the paperwork and consider these issues for themselves. My view is clear: we have learned some new information, particularly about what we were told by Ministers, but I do not believe that these papers justify calls for a new inquiry. What they do provide is further evidence that this was, in my view, a flawed decision by the Scottish Executive, which we already knew; and I believe they point to some broader lessons from this affair.

It is clear from these papers that the last Government badly underestimated—in fact, failed seriously even to consider except as an issue to be managed—the reaction both in Britain and in the United States to the release of Mr Megrahi, above all among many of the families who lost loved ones. The key point that emerges to me from reading the paperwork is that insufficient consideration was given to the most basic question of all: was it really right for the British Government to “facilitate” an appeal by the Libyans to the Scottish Government in the case of an individual who was convicted of murdering 270 people, including 43 British citizens, 190 Americans and 19 other nationalities? That, for me, is the biggest lesson of this entire affair. For my part, I repeat: I believe it was profoundly wrong. The fact that, 18 months later, the Lockerbie bomber is living at liberty in Tripoli serves only to underline that. I commend this statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement. I want to start, because of their importance, with the European Council conclusions on Egypt. I believe that the Egyptian people are continuing to show enormous courage and consistency in their desire for fundamental and lasting change. As I said last week, we support the call for a clear, credible and transparent path towards transition as soon as possible.

May I join the Prime Minister and his fellow leaders of the European Union in condemning any attacks on peaceful demonstrators and urge the authorities to allow the people of Egypt to continue to exercise their right to free and peaceful protests? The Prime Minister spoke to Vice-President Suleiman today, so will he update the House on his view of the current talks between the Vice-President and the Opposition parties and tell us whether he thinks these might lay the ground for the transition? Will he also offer the latest thinking of the EU and allies on the difficult issue of the role of President Mubarak during the transition?

Does the Prime Minister agree that the transition must include not just the provision of free and fair elections but other democratic structures, from a free press and diverse political parties to an independent judiciary? Will he also take the opportunity to update us on the steps he has taken since last week to ensure the safety of British nationals in Egypt during the current turbulence?

Let me deal with the other matters discussed at last Friday’s European Council. On energy policy, we welcome the Council’s conclusions on the internal market in gas and electricity and on the North sea grid. We also welcome the Council’s plans for improvement of Europe’s energy infrastructure. Such action can make us more resilient in the face of potential supply disruptions, as we saw in 2008-09 during the dispute between Russia and Ukraine.

Let me ask the Prime Minister two questions about the way in which our policy at home relates to the discussions in Europe. First, we note the Council’s conclusions on the importance of renewable energy. May I ask the Prime Minister to update the House on the implementation of the renewable heat incentive, which is a crucial part of his renewable energy strategy? It was due to come into force in April this year, but has now been delayed. Can the Prime Minister tell us when it will be introduced?

Secondly, given that the financing of energy investment is a big issue across Europe, which the Council rightly flags up, may I ask the Prime Minister to update the House on progress in regard to the green investment bank? He has committed himself to building on our plans. Can he tell us whether he intends this to be a fully fledged bank, as many have argued that it should be?

I welcome the Council’s conclusions on the wider economy, including the eurozone. May I ask what discussions took place on the prospects for European growth next year? The summit has concluded that

“the overall economic outlook is improving”,

but I have to say that that is not how it will seem to many families in the United Kingdom. Did the Prime Minister share the recent experience of the United Kingdom with the Council, and did he warn his colleagues that cutting budget deficits too far and too fast could have damaging effects on growth and employment?

Let me now turn to the case of Mr Megrahi. The Lockerbie bombing was a terrible atrocity, destroying hundreds of lives and scarring the families left behind. The Cabinet Secretary, Sir Gus O’Donnell, has conducted a serious and thorough report on the papers relating to Mr Megrahi’s release, and we will study it in detail.

Sir Gus’s report makes three significant conclusions that pertain to Mr Megrahi’s eventual release. First, it concludes that the United Kingdom Government were worried about the impact on British interests of Mr Megrahi’s dying in jail. That is precisely what the former Foreign Secretary said in a statement to the House on 12 October 2009. Secondly, the report makes it clear that there is no evidence that

“UK interests played a part in Mr Megrahi’s release by the Scottish Government on compassionate grounds.”

Indeed, Sir Gus went on to conclude that

“the former Government took great effort not to communicate to the Scottish Government”

their view. Thirdly, he concluded:

“Mr Megrahi's release on compassionate grounds was a decision that Scottish Ministers alone could—and did—make.”

So the message of today’s report is that Mr Megrahi’s release was not influenced by the United Kingdom Government. Perhaps the Prime Minister will tell us whether he agrees with that.

Above all, what today’s report should remind us is that the bombing of Pan Am flight 103 must live in the memories of this country and the United States. We must take all possible steps to ensure that it never happens again.

[The Prime Minister]

I thank the right hon. Gentleman for his comments and questions. I think that he is right about the response of the United Kingdom, the European Union and the United States to events in Egypt. While, in my view, one can never be certain that every statement made by the European Union is being listened to that carefully, I believe that in regard to its statement that the Egyptian Government must choose reform and not repression, the recent behaviour of the army in Egypt has been encouraging.

The right hon. Gentleman asked whether the current talks would be good enough to lead to transition. That is an extremely difficult question to answer. The point that I made to Vice-President Suleiman was that the more that the Egyptian Government could do to demonstrate that, for instance, they were bringing some opposition leaders into a transitional Government, the more they would be able to convince people that they were trying to reform, change, and deal with the constitutional issues. We have advised them to try to get ahead of events rather than taking a series of incremental steps, which I do not think are doing enough to respond to the aspirations of the Egyptian people. As the right hon. Gentleman rightly said, the transition is not just about the date of an election; it is about those building blocks of democracy that I mentioned earlier.

All United Kingdom citizens who wanted to leave have been able to do so. We will continue to keep travel advice under review, including advice on travel to the Sinai peninsula.

The right hon. Gentleman asked two very good questions about the renewable heat incentive, which is an absolutely vital initiative that we are taking, and about the green investment bank. Both projects are moving ahead. The Government have published structural reform plans with dates for implementation, so one thing that others can do is hold us to account when things do not happen during the week in which they are meant to happen, and I am sure the right hon. Gentleman will do that.

On the economy, the right hon. Gentleman has mentioned sitting round the European Council table and talking about the impact of cutting budgets. My overwhelming impression was listening—we had to listen at some length—to reports from Greece, Portugal and Spain about their economies. Having seen what they have had to cut and the difficulties that they are in, the warning that I take from that is, “Do not go back into the danger zone, where those countries still are.”

On al-Megrahi, I set it out as best I could in my statement. It is clear to me that those who think that a conspiracy was cooked up between BP, the British Government and the Scots to release al-Megrahi are not right. It was a Scottish decision by the Scottish Government—in my view, it was mistaken. As I have said, we have learned something today about what we were told in this House by Ministers. When hon. Members look at what was said in this House and what we have seen in these papers, I think that they will agree with me—I am trying to be very reasonable about this—that we were not given a complete picture.

[Sir Malcolm Rifkind (Kensington) (Con)]

As the then Secretary of State for Scotland, I had to visit Lockerbie on the night of that disaster, when I saw the terrible consequences that flowed from it. I have always been appalled by the release of the convicted murderer. The Prime Minister has drawn attention to the Cabinet Secretary’s conclusion, in which the Cabinet Secretary states that the previous Government wished to do all within their power to facilitate the release of Mr Megrahi. Do not the documents released today show that, in pursuit of that objective, a Foreign Office Minister met his Libyan ministerial counterpart, offered to send details of how release on compassionate grounds might be obtained and wrote to his ministerial colleague on 18 October 2008? Does that not confirm that the previous Government were up to their neck in this shoddy business, that they were desperate to see the release of Mr Megrahi and that they must therefore share responsibility with the Scottish Government for one of the most foolish and shameful decisions of recent years?

[The Prime Minister]

As ever, my right hon. and learned Friend brings a mixture of experience and precision to this issue. We were told by the previous Government what they did not want, which was the death of al-Megrahi in a Scottish prison, but we were not told by the previous Government what they did want, which was the facilitation of his release. That comes over, time and again. The most powerful point that my right hon. and learned Friend makes is this: in the end, that man was convicted of the largest mass murder in British history, which should have been the thought coursing through ministerial veins and brains when Ministers wrote those memos and made those speeches.

[Mr Jack Straw (Blackburn) (Lab)]

I fully understand the Prime Minister’s concern and that of colleagues on both sides of the House about the timing and circumstances of the release of Mr Megrahi. However, having read the Cabinet Secretary’s report in full, which I have here, may I say that it was wrong of the Prime Minister to elide quotations from the Cabinet Secretary’s conclusions with his own gloss, implying that those were indeed the conclusions? As my right hon. Friend the Leader of the Opposition has spelt out, and contrary to the implication that the Prime Minister has given to the House, the Cabinet Secretary concluded that nothing in the material that he reviewed contradicts anything that my right hon. Friend the former Foreign Secretary told this House on 12 October in a detailed statement or anything that my right hon. Friend the former Prime Minister has said at any time on this issue. The conclusions back up the continued assertion made by the former Prime Minister, the former Foreign Secretary and me, as the Prime Minister has finally admitted through gritted teeth, that there was no pressure from BP on the Scottish Government, that we acted properly at all times and, moreover, that at no stage did we ever suggest to the Scottish Government what decision they should take.

On so-called facilitation, let me read to the House the very next sentence. It

“amounted to: proceeding with ratification of the PTA”,

which was in hand anyway,

“explaining to Libya in factual terms the process for application for transfer under a PTA…and informing the Scottish Government that there was no legal barrier to transfer under the PTA”.

That was all known before and does not contradict what my right hon. Friend the former Foreign Secretary said at the time.

[The Prime Minister]

Let me make two points gently to the right hon. Gentleman. First, although the Cabinet Secretary rightly, in my view, finds that nothing in this report contradicts what the then Foreign Secretary did say, my point is purely this: this is about what was not in that statement. That is because when we look at what is in the report, we find that it is very clear that there were all sorts of things—facilitations and game plans—that we were not made aware of.

I do not want, in any way, to misquote what Gus O’Donnell has done in a very good report. The conclusions in paragraph 34 state:

“Policy was therefore progressively developed that HMG should do all it could, whilst respecting devolved competences, to facilitate an appeal by the Libyans to the Scottish Government for Mr Megrahi’s transfer under the PTA or release on compassionate grounds… as the best outcome for managing the risks faced by the UK.”

All right hon. and hon. Members will be able to make up their mind whether what we were told by the previous Government was a full and complete picture. Everyone can make up their mind and I am pretty sure what a reasonable person will come to.

[Sir Menzies Campbell (North East Fife) (LD)]

The emphasis in these matters has always been on Mr Megrahi’s condition, but, respectfully, it seems to me that other issues have to be taken into account as well. The first is the nature of the crime, the second is the consequences of the crime and the third is the sentence imposed by the court. Had the British Government at the time taken proper account of those factors, I doubt very much whether they would have reached the conclusion that they did and sought to “assist”, to put it neutrally, the Libyan Government. But, equally, if Mr MacAskill had taken proper account of the nature of the crime, the consequences of the crime and the sentence imposed, he would surely have found that those factors far outweighed any question of compassion.

[The Prime Minister]

The right hon. and learned Gentleman puts it extremely clearly. The fact is that al-Megrahi was allowed to go home and die with his relatives, but that is not a luxury he afforded to anyone who was on that jet, and you have to take into account the nature and the consequences of a crime when you think about your actions. As I say, when we get away from all the detail of the report and just stand back and think about the big picture—as I say, the lesson to be drawn is that we have to keep focusing on the big picture—which is the heinous crime that was committed, the lives that were taken and the families that were wrecked, we have to think that someone has to suffer the consequences of that.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Just because three of the most glittering stars in the parliamentary sky have asked very full questions, that does not, in any way, oblige right hon. and hon. Members to follow suit. On the whole, I would rather that they did not.

[Mr Ben Bradshaw (Exeter) (Lab)]

What discussions took place at the EU Council about events in Egypt lending added urgency to breaking the impasse in the middle east peace process? What is the Prime Minister personally doing to break that impasse?

[The Prime Minister]

I did have discussions with Baroness Ashton about this, it was also discussed around the table and I had a very good meeting with Hillary Clinton in Munich. Obviously, there are concerns that instability in Egypt will make progress on the middle east peace process more difficult, but I strongly believe that we should not take our eye off the ball and that we should keep the pressure up—that means pressure on both sides. It means pressure on Israel to make progress on issues such as settlements and pressure on the Palestinians to return to meaningful talks. Britain will play a very key role in this, and I commend Baroness Ashton for her work.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

Trade between the United Kingdom and north African countries has historically been lamentable; we are way down the list on bilateral trade compared with our European partners. Will the Prime Minister do more to make sure that UK Trade & Investment plays a leading role in helping British companies to increase trade with countries such as Tunisia and Egypt to support democracy there?

[The Prime Minister]

My hon. Friend makes a good point and the Foreign Secretary will be going to Tunisia later today. We want to have good trading relationships with those countries, but that should never be bought at the price of trading off our values. We should have had a clearer red line about what was and was not appropriate, but Britain has to trade itself out of recession and links with fast-growing countries all over the world are absolutely what we are trying to put together.

[Mr David Winnick (Walsall North) (Lab)]

Fine words have been said by the Prime Minister, the President of the United States and other western leaders about the very brave demonstrators in Egypt. Is it not possible that those demonstrators are asking—this is an interesting question—why the western powers have been so silent over the past 25 or 30 years about what has been happening in their country, including the authoritarian rule, the denial of liberty and the sadistic tortures that have been taking place in prisons? Those sorts of questions should be asked not only in Egypt but elsewhere.

[The Prime Minister]

The hon. Gentleman makes a good point. As I said in my statement, the EU has leverage over those countries in terms of the aid it gives and it should be tougher in asking for conditions in return for that aid. In terms of the situation we face today, I just do not accept that there is only, on the one hand, an Islamist regime or, on the other, standing up for the tough man—the dictator. We must encourage those countries not necessarily to have free elections just like that, at the flick of a switch, but to put in place the building blocks of genuinely free countries and open societies that will make sure that they have lasting democracies when they reach that goal.

[Richard Ottaway (Croydon South) (Con)]

The conclusion by Sir Gus O’Donnell that the previous Government did “all it could” to facilitate the release of Mr Megrahi is bad enough, but it is also inconsistent with the impression created by the previous Government. Has the Prime Minister made any assessment of the motive for such behaviour?

[The Prime Minister]

It is for Ministers to explain what they said and what they did not say. Clearly, they can rely on what is in the report about not being contradicted, but I think they have to look—and I hope they will do it fairly—and ask themselves, “Given that I was receiving memos about a game plan of facilitating contact and given that I was signing off those memos, shouldn’t I have really said to the House of Commons and elsewhere that it was not just that we didn’t want this man to die in a Scottish jail but that we were working actively with the Libyans to try to secure his release?” I think they should have said something more along those lines. I have genuinely tried to approach this by asking what is fair in terms of what we should have been told when those questions were asked.

[Chris Bryant (Rhondda) (Lab)]

I do not think that trade should ever be the sole determinant when it comes to our foreign policy, which is why I hope to persuade the Prime Minister to adopt more of his muscular liberalism, to coin a phrase, in relation to the Russian Federation. Sergei Magnitsky was tortured and murdered in a Russian jail when he was working for a British company in Russia. The United States Congress is now considering banning from the USA anyone who was involved either in the corruption he uncovered or in his torture and murder. Will the Prime Minister consider doing the same here and will he make sure that those views are expressed to Foreign Minister Lavrov when he visits next week?

[The Prime Minister]

The hon. Gentleman makes a good point and I am glad that the phrase “muscular liberalism” is catching on. That is exactly the approach we have taken with Russia and we do raise questions such as those that the hon. Gentleman asked when we hold meetings with President Medvedev, as I have done, or with Foreign Minister Lavrov, as my right hon. Friend the Foreign Secretary has done, and we will go on raising those issues. Some countries have not taken that approach, but we think it is the right approach.

[Mr Julian Brazier (Canterbury) (Con)]

Bearing in mind that several of the key moderate figures in Egypt have made pledges to have a referendum on the long-standing peace treaty with Israel, does my right hon. Friend, in pursuit of the excellent answer he gave to the right hon. Member for Exeter (Mr Bradshaw) earlier, agree that a key factor in determining whether we get a good outcome in Egypt will be whether the current Israeli Government are willing to stop building more settlements and be serious about coming to the peace table?

[The Prime Minister]

My hon. Friend makes a good point, but we should also be clear with reformers and opposition figures in Egypt that we see progress on the peace process as absolutely vital for the stability and prosperity of that region. This is where the European Union has some leverage because in those association agreements we should be making sure that just as there is money in return for progress on things we care about internally, they should also be about standing by agreements that have been entered into, including in the peace process.

[Angus Robertson (Moray) (SNP)]

I am grateful for an advance copy of the statement. The Prime Minister has long taken a different view from the Scottish Government or international observers such as Nelson Mandela on compassionate release. What is new, however, is that these official UK documents prove that as of autumn 2008, UK Labour Ministers supported Mr Megrahi being released to Libya, so they were saying one thing in public and the opposite in private. Is that not rank hypocrisy?

[The Prime Minister]

I have made my view clear and I tried to state it in a calm and reasonable way, because I do not believe that there was some conspiracy cooked up between a Scottish National party Government and a Labour Government. They find it hard enough to communicate with each other at the best of times. I see a few prominent Scottish MPs nodding. I think Ministers will want to look back at what they said and ask, “Could I have said more to give a complete picture?”

[Jo Swinson (East Dunbartonshire) (LD)]

I welcome the European Council’s strong position of support for the Egyptian people, particularly with regard to assistance with the transition to democracy. However, building new Government structures is not straightforward and should not be rushed, and that is why it needs to start now. Will the Prime Minister ensure that in providing assistance, the EU draws on the expertise of organisations such as the Westminster Foundation for Democracy and the Friedrich Naumann Foundation, both of which have a wealth of expertise in supporting fledgling democracies and working in Egypt?

[The Prime Minister]

The hon. Lady makes a good point about civil society organisations here that can work with civil society organisations in Egypt. The point that I would make about transition starting now is that precisely because the Egyptians say that there are all sorts of problems with amending their constitution and doing it quickly, they should be examining what they can do to build confidence among people on the streets of Cairo that they are genuinely changing. That is where I think considering including Opposition members in a transitional Government and giving some visible, clear and irreversible signs of what their intentions are would make a big difference.

[Mr Denis MacShane (Rotherham) (Lab)]

I think we heard two statements today, and they should have been separated. On al-Megrahi, does the Prime Minister recall that many of us had to hold our nose as IRA killers and terrorists were let out for the greater good of peace and stability? On his statement, can he say something about Tunisia? That is a small country, with only 10 million people, secular, highly educated, looking to Europe for help. May I ask him to ask the Foreign Office—he will probably be knocking at an open door—to see what we can do with economic and political investment in Tunisia to bring it, particularly as it is much smaller and more manageable than Egypt, closer to Europe?

[The Prime Minister]

The right hon. Gentleman makes a good point. That is one of the reasons why the Foreign Secretary is getting on an aeroplane this afternoon, going to Tunisia and talking to the Tunisians about helping to put in place the building blocks of a free and open society. One of the problems in these countries is the massive level of corruption. It was that which angered their populations so much, and we need to work with them. Going back to the issue of Libya and Northern Ireland, of course everyone had to hold their nose and talk to people we did not want to talk to and deal with people we did not want to deal with, but Governments were pretty frank about what we were doing and why we were doing it. That is my point.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

It is important that we do nothing to talk up the prospect of wider instability in north Africa and the Maghreb. Does my right hon. Friend share my dismay at less than forensic reports in the western press that seek to conflate inherently unstable countries such as Egypt and Tunisia with countries such as Morocco, which have a far more enlightened order economically, socially and politically?

[The Prime Minister]

My hon. Friend makes an important point. We should not assume that those countries are all the same. Genuine stability should be based on the progressive realisation of the goal of a more open society and the building blocks of the sort of civil society that we recognise. We cannot pretend, as neo-conservatives did, that we solve the problems in one go simply by holding an election. We should be clear, as people who believe in those rights at home, that we should be trying to achieve them progressively elsewhere.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister referred, rightly, to the efforts and the work of Baroness Ashton. He also said that he had had discussions with Hillary Clinton. In that context, what is his understanding of the United States’ attitude to the changes going on in Egypt? Is it US policy to support Mr Wisner’s view that President Mubarak should stay, or to support the EU view that there should be an early transition?

[The Prime Minister]

That was a well-put question, which I will try not to glide around too diplomatically. The US and the UK are absolutely aligned on this; I spoke to President Obama over the weekend, and we are pushing for the same things. We want transition, we want it to be real and we want it to start now. We believe that it should include some of the things we have been discussing today, like bringing opposition figures into the Government, having dates for a road map for elections and making sure that they deal with some of the abuses of the past. In terms of what Mr Wisner said, I do not think that the way he put his words was a full reflection of the US Government’s view, as I think has been made clear.

[Robert Halfon (Harlow) (Con)]

Given my right hon. Friend’s important speech over the weekend, does he not agree that the previous Government’s facilitation of the release of al-Megrahi sent entirely the wrong signal to dictators, Islamists and terrorists right across the globe and represents a considerable setback to those who oppose such things? Will he take steps to ensure that as a United Kingdom we are never faced with such a situation again?

[The Prime Minister]

My hon. Friend makes a good point, which is that when this happened a very bad message was sent about what we stand for in the UK and our views in terms of the response to such a heinous crime. It is important to bear that in mind, and as I said in my statement, I do not think that enough thought was given to that, which in the end is the most precious of all judgments that Ministers should make.

[David Cairns (Inverclyde) (Lab)]

As the Minister of State in the Scotland Office at the time, and as Mr Megrahi’s constituency MP, I strongly agree with the Prime Minister that Mr Megrahi should have spent the rest of his natural life in prison. Does he agree with me that however ill-considered and ill-judged phrases such as “our game plan on Megrahi” may be—had anyone approached me with such a game plan, I would have told them where they could put it—it must not obscure the central fact that it was a decision that was taken, and could only ever have been taken, by Scottish Government Ministers? There was no collusion, no cover-up and no conspiracy, just a bad decision by the SNP.

[The Prime Minister]

I go a long way with the hon. Gentleman, who I think made the right judgment about the release of Megrahi. The problem, and this comes out in the report, is that memos submitted to Ministers in the Foreign Office included things like,

“Facilitating direct contact between the Libyans and the Scottish Executive is a key part of our game plan on Megrahi”,

and that submission was subsequently agreed by the Minister. That is the point. The language about facilitating contacts that was put into memos was subsequently agreed by Ministers, including the former Foreign Secretary, and we were not told about that in the House of Commons. That is an issue that needs to be addressed.

[Tony Baldry (Banbury) (Con)]

One fifth—20%—of the Egyptian population are Christians, mostly Copts and some Catholics. Does my right hon. Friend agree that pluralism and human rights need to be at the centre of any dialogue on the future of Egypt and that the litmus test for whether Egypt is going forward into the 21st century or backwards will be the treatment of minorities, such as Christians, in the weeks and months ahead?

[The Prime Minister]

My hon. Friend makes an extremely good point. When you consider how much money the EU has put into a country such as Egypt—something like €500 million over the last three years—those are exactly the sorts of things that we should be insisting on, which I think are tests of a civilised society.

[Sir Stuart Bell (Middlesbrough) (Lab)]

May I tell the Prime Minister that the 17 member states of the eurozone will be quite comfortable in dealing with safeguarding the euro into the future? He was right to refer to the single market in his speech in Davos last week, as 60% of our trade is with the European Union, but I urge him not to treat the EU as à la carte, only with trade; it must also cover the environment, immigration and energy security—that is to say, menu fixe.

[The Prime Minister]

I do not entirely agree with the hon. Gentleman: 50% of our trade is with the EU, and 44% with eurozone members. We want a healthy eurozone, but if a menu fixe means that we have to join everything, including the single currency, frankly, count me out.

[Mr Peter Bone (Wellingborough) (Con)]

Is it not terrific that we now have a Prime Minister who goes to Europe and puts Britain’s interests first? Would he clarify just one point? He said that we will not be dragged into a mechanism to bail out the eurozone countries, but that we could of course opt in to such a mechanism. Are we just ruling out a mechanism, or are we not going to join a mechanism that will help bail out the euro?

[The Prime Minister]

My hon. Friend asks a very good question that requires quite a complicated answer. Because of the previous Government’s decisions at the time of the general election, we are still at risk of the European financial mechanism, which was set up at that time and used in part to help Ireland, as it is decided by qualified majority voting. What we have achieved, in terms of the treaty change being proposed for the future, is to make sure that the UK cannot be pulled into a future mechanism for doing those things. That is the position we have managed to secure, and, as I say, in Europe once you have secured these things, you have to make sure that you damn well continue securing them for the future.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

The Prime Minister said in his statement, “It is time for Europe to take a more hard-headed approach where the conditions on which we give money are real and insisted upon.” At the Security Conference in Munich, Baroness Ashton, when asked whether the European Union will continue to assist on conditionality for its aid, would not give a clear answer. Did the UK insist on that approach and Europe not agree, or did Baroness Ashton just fail to give us a precise answer?

[The Prime Minister]

What we discussed at the European Council was a specific declaration on Egypt, and I made sure that in that declaration there was some language about the association agreements that we entered into and making sure that they were real and tangible. I have the language in the folder before me; perhaps I can repeat it in a minute, because it does seem to me important. I am sure that Baroness Ashton, in looking at the conclusions that we reached, will recognise that we did all agree that that should be the case.

[David T. C. Davies (Monmouth) (Con)]

Could the Prime Minister tell us whether the EU Council took note that Morocco, which has embraced and is embracing a human rights and democracy agenda, has not suffered from outbreaks of civil unrest? Does he agree that we could do more to help that country and everyone in the region if we encouraged other nations in the area to take part in negotiations over a referendum on the future of Western Sahara?

[The Prime Minister]

My hon. Friend makes an extremely good point. In our relations with those countries, we want to look at all the things that will help to encourage stability, progress and peace rather than strife.

In terms of the association agreement with Egypt, the declaration on Egypt says very specifically that we agreed:

“The basis for the EU’s relationship with Egypt must be the principles set out in the Association Agreement and the commitments made.”

European leaders agreed that statement, and I think it is important for the future.

[Keith Vaz (Leicester East) (Lab)]

Were there any discussions at the European Council concerning Yemen? The Prime Minister will be aware of how important that country is in the fight against terrorism, and of the excellent talks between the Foreign Secretary and the Yemeni Foreign Secretary last week. Is the Prime Minister satisfied with the package of measures put forward by President Ali Abdullah Saleh? Is not the stability of Yemen absolutely vital in the area? If the Yemeni Government fall, al-Qaeda will be the winner.

[The Prime Minister]

The right hon. Gentleman makes an important point, which is that Yemen is vital to the security not just of that region, but frankly of our world, because there has been such a lot of al-Qaeda activity in that part of the Arabian peninsula. Yemen was mentioned at the European Council. In terms of the action that President Saleh has taken, clearly we want to see it in detail and see it put in place. There is something of wake-up call in Yemen because of the incredible stresses and problems that that country faces, and we need to work with it. I have met President Saleh and spoken to him on the telephone, and the Foreign Secretary has had meetings, as the right hon. Gentleman says. We need to help Yemen with its reform programme, not just so that it becomes more stable, but so that it is able to deal with the cancer of al-Qaeda which is in its own country.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my right hon. Friend the Prime Minister believe it to be a coincidence that, despite numerous assurances from the then Labour Government that Mr Ronnie Biggs would remain in prison until he died, the then Justice Secretary, the right hon. Member for Blackburn (Mr Straw), conducted a U-turn and released Mr Biggs on compassionate grounds—mysteriously just weeks before Mr Megrahi was released on the same grounds?

[The Prime Minister]

My hon. Friend is pulling me into territory where I should not go, but it does seem to be a pretty good medical record that people released from prison, normally on the brink of keeling over, then last for a very, very long time.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Prime Minister mentioned that he wants to see a strong and secure eurozone. On a day when our papers are still full of stories about the predicament of British banks, which are vulnerable to loans that they made over recent years, and at the same time full of stories about bankers’ bonuses, can the Prime Minister tell us whether there was a discussion about the still perilous state of our banking system throughout Europe, and the fact that bankers’ bonuses are still paid out at such levels?

[The Prime Minister]

Of course we did discuss what lies at the heart of the eurozone crisis, part of which is about banks that were hopelessly over-leveraged, over-extended and all the rest of it. Here in the UK, we are having a serious conversation with the banks whereby we try to sort out what we want to see. I want to see them paying more tax, I want to see them doing more lending, particularly to small businesses, and I want to see a smaller bonus pool than last year. I am confident that we will be able to achieve those things in this country.

[Mr Edward Leigh (Gainsborough) (Con)]

I know that the Prime Minister has to use diplomatic language, but we all know that the truth is that if al-Megrahi had come from a non-oil rich, non-strategic country, he would still be in prison. So imagine the pain today of the mothers and fathers, the sons and daughters, of those killed on that flight. Can the Prime Minister somehow, on behalf of the British people, say sorry, apologise and articulate the view that never again will we appease murderous dictators in the interests of realpolitik?

[The Prime Minister]

My hon. Friend puts the point very powerfully. I would say to all those who lost loved ones in that appalling terrorist act that we are profoundly sorry for their loss and for how they have suffered. When one of them said, “I’m not able to spend Christmas at home with my loved ones in the way that this man is”, I think they spoke for everybody. We have to understand that when a crime like that is committed, it is not some un-violent sense of retribution just to say that that person should not be released from prison. They have basically committed a life sentence on all those families who are never going to see their loved ones again. Not to understand that is to fail in the duty of a Minister.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

This further step towards our long-held goal of a single market for energy should open doors for areas like mine to forge ahead with offshore wind. Will the Prime Minister recognise and address legitimate concerns over the weakness of his policies for growth so that jobs are created here in the UK and small businesses can properly apply for and get jobs in the supply chain?

[The Prime Minister]

I do not accept what the hon. Gentleman says. At a European level, this is going to be helpful for the onshore and offshore wind industry and other renewable industries in this country. Also, here in the UK we have provided specific grants to ports to update their infrastructure so that large manufacturers can come here and manufacture wind turbines and provide offshore wind. I have spoken personally to companies that are coming to do that in parts of the UK. We will go on supporting the growth of this very important renewables sector.

[Alun Cairns (Vale of Glamorgan) (Con)]

The Prime Minister has highlighted some significant inconsistencies between what the previous Administration stated publicly and what was released by Sir Gus O’Donnell earlier today. Obviously, the focus should be on the victims of this horrendous crime, but what assessment has the Prime Minister made of the effects on the relationship with some parts of the US Administration?

[The Prime Minister]

The relationship is extremely good, and I think it will go on being good. I discussed this issue with Hillary Clinton when we met at the weekend. I think that the Administration have been grateful for the very strong and clear view that the Government have taken about the events surrounding the release of al-Megrahi and the fact that it was wrong. This point also goes back to what was said earlier. Of course, we want to have good relations not just with America but with Libya and with other countries, but we have to have some pretty clear lines in our minds about what is going to be part of that relationship and what is not. Frankly, I think it is perfectly possible to have good relations if we are clear about those things.

[David Rutley (Macclesfield) (Con)]

I was fortunate enough to work briefly with one of the victims of the Lockerbie bombing who was so tragically taken from us in 1988. I am sure that the families of these victims will be very interested to read the report that was issued today. Is my right hon. Friend aware of whether any previous Ministers from the former Government are planning to meet the groups of families who represent these victims to explain the policy that has so obviously come to light today?

[The Prime Minister]

I know that a number of victims’ families will obviously be interested in the report, and some will be seeking meetings either with the Government or with others. To be frank with my hon. Friend, not all the victims’ families take the same view about al-Megrahi and what happened and whether he was responsible, and all the rest of it. We have to be clear that he was convicted after a properly constituted and thorough trial. He then had an appeal, which was quashed. On that basis, the decisions that were made were clearly wrong decisions.

[Damian Collins (Folkestone and Hythe) (Con)]

In the Cabinet Secretary’s report, he notes that the former Justice Secretary, the right hon. Member for Blackburn (Mr Straw),

“contemplated the merits of offering the Scottish Government a letter in support of a Libyan request”

to release al-Megrahi. Does the Prime Minister agree that that was an odd thing to contemplate if it was clear that there was a Government policy not to put any pressure on the Scottish Executive?

[The Prime Minister]

To be fair to the right hon. Member for Blackburn (Mr Straw), who is not here—although it is not my job to defend him—the report states that he considered making contact with the Scottish Executive and then decided not to. That piece of evidence suggests that there was not the great conspiracy that some people felt there might have been, in particular the American Senators I met who represent victims’ families. It is easy to understand why they thought that might have happened. They were looking at a country overseas, and were hearing what BP was saying, what the Government were doing and what the Scottish Executive were doing. However, I do not think that that is how the evidence stacks up. There was no conspiracy—it was a Scottish decision. As I said, the report highlights some issues about what we were told and how we were told it.

[Mr Philip Hollobone (Kettering) (Con)]

Greece is responsible for an extremely leaky part of the EU’s external border. Its asylum system was recently condemned as unfit. The problem for the UK is that should economic migrants make their way into the EU to claim asylum and end up in Britain, we cannot send them back to Greece. Was that issue discussed at the Council? How can we get the Greeks to secure their part of the EU frontier?

[The Prime Minister]

We did not discuss the EU migration issue at this Council, but we discuss it often. Greece and Italy tend to be voluble about it because they are often the door through which so many migrants come. I will make two points. First, we need to ensure that we can return people. The arrangements between Britain and France are extremely good. Secondly, one reason why we should not have a common immigration policy is that I do not want our population to be dependent on decisions made at the border of other countries. That is why I think we should keep this as an area of national competence.

Points of Order

Monday 7th February 2011 Commons Chamber

16:26

[Kevin Brennan (Cardiff West) (Lab)]

On a point of order, Mr Speaker. Will you confirm whether it is parliamentary to refer to right hon. or hon. Members as being guilty of “rank hypocrisy”? Obviously, if it is parliamentary, we might like to use it on a daily or even hourly basis to describe the Government’s policies. I gave notice to the Secretary of State for Education that I would raise this point of order. If it is an unparliamentary expression, can you require an apology and a withdrawal?

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order and for notice that he intended to raise it. At the outset, I say to the House that there was an enormous amount of noise in the Chamber when the Secretary of State was responding to a question and I did not hear clearly every word that he said. However, as the House would expect, I have had the record checked, and the words about which the hon. Gentleman complains appear in the draft Official Report at the end of the answer. It is indeed unparliamentary for any Member of the House to suggest that another Member is a hypocrite or has said something hypocritical. The term “rank hypocrisy”, when directed at what another Member has said, is unparliamentary and should be withdrawn. I hope that is clear.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

On a point of order, Mr Speaker. I cannot remember, having been in this House for quite a few years, a statement by the Prime Minister on such a diverse selection of topics. I find it difficult to understand how Members can hold the Prime Minister accountable if he comes to the House with a potpourri of different aspects for which we are supposed to hold him accountable. Will it become a general process that we will not be able to tell what we will be asking the Prime Minister about?

[Mr Speaker]

The decision on whether to make a statement is a matter for the Government, the title of the statement is a matter for the Government and the content of the statement is a matter for the Government. I never have treated and never will treat anything said by the hon. Gentleman, or any other Member, with levity. He is raising a serious point, but I do not feel that it is a matter for the Chair today. I hope I can safely say to the hon. Gentleman, who has been in the House for 31 years—coming up to 32 years—without interruption, that the idea that anything causes him difficulty is hard to credit.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Further to that point of order, Mr Speaker. Given that we no longer have debates in Government time ahead of the European Council, is it not even more reprehensible that the European Council statement has got mixed up with another major issue that should have been in a separate statement?

[Mr Speaker]

I really do not think that that is a matter for the Chair. I note what the hon. Lady has said about debates before European Councils, which is an important observation. The Leader of the House is in his place and has heard it, and if the hon. Lady wishes to pursue it through the usual channels or with the Leader of the House she is, of course, absolutely justified in doing so.

Earlier, I had an indication that the hon. Member for Walsall North (Mr Winnick) wished to raise a point of order.

[Mr David Winnick (Walsall North) (Lab)]

indicated dissent.

[Mr Speaker]

No, he does not wish to do so.

[Mr Peter Bone (Wellingborough) (Con)]

On a point of order, Mr Speaker. Would it not be strange if the Prime Minister came to the House and made a statement, and then when somebody asked him a question, he said, “I’m not answering that, because it’s outside the remit of what I came to the House for”? I should think that we should welcome the Prime Minister answering questions as widely as possible.

[Mr Speaker]

I am not sure that I should be the arbiter of that. The hon. Gentleman has raised an issue of what he considers to be “strangeness” and asked me to rule on it, but I think that is beyond the remit of the Chair, so we will leave it there for today.

Opposition Day

Monday 7th February 2011 Commons Chamber

[Un-allotted Half Day]

Fuel Costs

Monday 7th February 2011 Commons Chamber

[Mr Speaker]

I inform the House that I have selected the amendment in the name of the Prime Minister.

16:31

[Stewart Hosie (Dundee East) (SNP)]

I beg to move,

That this House notes that the oil price has reached $100 a barrel, and that diesel in the UK is the most expensive in Europe; further notes that the combination of the 1 January 2011 duty rise and the increase in value added tax is estimated to have added 3.5 pence to the cost of a litre of fuel; acknowledges the sharp rises in fuel prices over the past year and the resulting impact on headline inflation figures; recognises the financial pressure this places on hard-pressed families and businesses already struggling with high inflation and the impact of the recent rise in value added tax; condemns the Government’s continued dithering over the implementation of a fuel duty regulator (or stabiliser) as neither a sustainable or stable way to make tax policy; further recognises the specific additional fuel costs for those living in remote and rural parts of the UK; is concerned that diesel in such places is approaching £7 per gallon; condemns the Government for its failure to prioritise the implementation of a fuel duty derogation; and calls for the introduction of a fuel duty derogation to the most remote areas at the earliest opportunity.

The issue of high and spiking fuel prices is one of major concern around the country, as we can witness from the campaigns run by national and local newspapers and by campaign groups local and national the length and breadth of the country. Those campaigns—my favourite is the “fight for fairer fuel” run by The Courier—are not driving public opinion but reflecting it.

I was taken by the front page of the newspaper a week or so ago, which stated, “Osborne ‘may override 1p fuel duty increase’”. The Chancellor had clearly been listening to some of the concerns that had been expressed. The newspaper went on to report that when he was asked on a local radio station if he could do anything about fuel duty, he said:

“We can over-ride it, we are looking at that.”

He also seemed to confirm that Ministers were looking into a fuel duty stabiliser so that, as he said,

“the Government steps in to try to protect people from the effects”

of volatility at the pumps.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

It is not just the Dundee Courier; the Stornoway Gazette is admirably drawing attention to rural fuel derogations in some areas of Europe, particularly Mediterranean islands that do not have the same fuel demands as the north of Scotland. The question has been raised why the matter is taking so long, why it is stalling in the European Commission and why the UK Government are not moving as efficiently and effectively as some European Governments in respect of their citizens’ needs.

[Stewart Hosie]

I will come to the rural fuel derogation in the second part of my comments, but in relation to the Stornoway Gazette, I am sure that there are many other such campaigns. My hon. Friend’s point reflects what I have just said—this is an issue of extreme concern in many parts of the country.

I was explaining that The Courier reported that the Chancellor had suggested that the Government were looking into a fuel duty stabiliser. I was about to say “so far, so good”, but unfortunately the next paragraph of the newspaper’s front page read:

“The Treasury later played down any suggestion that the Chancellor was announcing any intention to scrap the rise”.

The Government’s position is clear as mud.

Although the scrapping of a single rise would be extremely welcome, it is not what is fundamentally needed. We need a permanent fuel duty regulator and a stabiliser mechanism that is always in place to smooth out spikes when prices rise at the pump. It is not that the Government do not know that that is needed, because in the very same article, the Secretary of State for Business, Innovation and Skills is quoted as saying, I believe at a Press Gallery lunch:

“It is quite likely that we are going to get a nasty period of high fuel prices.”

I say to him that we are not going to get that; we already have a nasty period of very high fuel prices.

In January, diesel in Stornoway was £1.42 a litre—that is almost £6.50 a gallon. In Aviemore, in the Chief Secretary’s constituency, the price was £1.38 a litre, which is nearly £6.30 a gallon.

[Mr MacNeil]

Those prices almost seem cheap now. They have gone up to £1.45 and £1.46 a litre. At Benbecula airport today, I spoke to Rhoda Macauley, who lives in Daliburgh and has a 50 mile round trip to work at the check-in, and is seriously considering whether working is worth her while, such is the price of fuel.

[Stewart Hosie]

That does not surprise me. In previous debates, after we have experienced high spikes, several Members in the House and elsewhere have reflected their constituents’ views that they had almost reached the point when it was not worth going to work, particularly in rural areas with long distances to travel—I will deal with that later—because of the price of fuel. However, that applies not just in Stornoway, Aviemore or my hon. Friend’s constituency. In Dundee last week, I paid more than £1.33 a litre—more than £6 a gallon in the city. That is now not uncommon, and it is unsustainable. It is inflationary, decimates family budgets and puts untold pressure on many businesses and business sectors. It is having a catastrophic effect in remote and rural areas. That is why we call on the Tory part of the Government to keep its promise to consult on and deliver quickly a fuel duty stabiliser, and on the Liberal part of the Tory-led Government to keep its promise to deliver a fuel duty derogation for remote and rural areas.

I have said that the high fuel prices are bad for business. The Federation of Small Businesses has told me just how bad. According to its January poll of members, should fuel prices continue to rise, 62% of those polled said that they would be forced to increase their prices; one in 10 suggested that they may lay off staff; more than a quarter said that they could be forced to freeze wages; more than a third said that they would have to reduce investment; and 78% said that rises would put overall business profitability in jeopardy. When we are trying to grow our way out of recession and into sustainable recovery, that is the wrong thing to do.

[Mr Mike Weir (Angus) (SNP)]

I very much agree with my hon. Friend. However, is not the position even worse, given that people in many rural areas and constituencies such as mine have no alternative but to move goods by road? There is simply no other way of getting goods to our towns, which are not served, apart from the coast, by the railway line.

[Stewart Hosie]

My hon. Friend is absolutely right. In many parts of his constituency, goods must be moved by road. The days of rail terminals in Brechin or Forfar that would take freight are sadly long gone.

[Mr Weir]

I also point out that the idea that the goods can be moved by rail is flawed in any event because although, as my hon. Friend knows, a rail line goes through the coastal part of my constituency, there is no longer a goods terminal in Arbroath or Montrose, the two stations there. There is no alternative to road transport.

[Stewart Hosie]

My hon. Friend is right, and I am sure that hon. Members throughout the House will have examples of infrastructure that used to exist, but is no longer there, with the result that 100% dependence on roads is now the case.

[Hywel Williams (Arfon) (PC)]

Does my hon. Friend accept that the high prices also affect rural businesses, where petrol, diesel and other goods, such as groceries, are sold? Those businesses are hit by not only the price rise in fuel, but the cost of carrying goods to their shops. That is a dreadful burden for businesses in rural communities.

[Stewart Hosie]

That is absolutely right. The price is hugely inflationary in rural areas. It is also a problem in some of the poorer parts of our cities, where car ownership is remarkably low. It means that some people with modest means do not even have the ability to travel to a supermarket, where there may be discounted goods. Instead, they are forced to pay higher prices in certain urban centres. That should not happen.

[Sajid Javid (Bromsgrove) (Con)]

The hon. Gentleman is right to raise this issue and to talk about the impact of high fuel prices on hard-pressed families, but he will know that fuel duty raises about £30 billion for the Exchequer, and that a 1p increase in duty raises about £500 million. His case would be far more powerful if he could outline the public spending he wants to cut so that fuel duty can be cut, because that money must be made up somehow.

[Stewart Hosie]

The hon. Gentleman makes the same point that the Labour party used to make—something must be cut to fund the Scottish National party proposal. However, the SNP argues that when the price at the pump increases, there is a VAT windfall. In any circumstances, we know that there is likely to be a windfall in excess of £1 billion from the North sea. We believe that that should be used to temper duty increases and to lower the duty level, so that the yield anticipated by the Government does not decrease, and to smooth the effects of the spiking at the pumps.

[Sajid Javid]

rose—

[Stewart Hosie]

I shall move on a little. I have been generous, and I will give way again in a little while.

I was talking about the impact on business and the information provided by the FSB. As I said, 78% of its members who were surveyed in January said that the increase in duty would have an impact on them and put business profitability in jeopardy, which is the wrong thing to do when we are trying to grow our way out of recession. I would have thought that this Government would want to listen to the views of the FSB, not least because small businesses in the UK provide 90% of all our enterprises, and in Scotland they provide 50% of all jobs. They will be engines of recovery in this country.

John Walker, the UK chairman of the FSB, and Andy Willox, the FSB’s Scottish policy convenor, said:

“Scottish small businesses want to grow, innovate and create employment but the cost of fuel puts the brakes on their ability to drive the recovery…Every extra penny spent at the pumps is a penny not being spent elsewhere in the economy and our members are finding it hard to plan for the future, as well as survive the present, due to the spiralling cost of fuel.”

[Mr Brian Binley (Northampton South) (Con)]

I am most grateful to the hon. Gentleman for allowing me to interject a little on the question of small and medium-sized business. I agree with his thrust that they are vital and that they will provide the jobs growth that the growth agenda requires. However, will he join me in expressing concern that the four increases in fuel duty are not as necessary as we were told they were by the then Government? Does he agree with that?

[Stewart Hosie]

I believe that the SNP opposed a number of the fuel duty increases. The hon. Gentleman may have been an honourable exception—I hope he was—but my memory tells me that Tory FrontBenchers abstained on some of those increases over the past few years when they were in opposition. He is generally right, but as I said, the debate is not about the cancellation or postponement of a single increase, however welcome that is, but about the implementation of a permanent stabilisation mechanism. Mr Willox said of that debate that:

“The FSB is right behind all moves to introduce a fuel duty stabiliser.”

[Robert Halfon (Harlow) (Con)]

I thank the hon. Gentleman for giving way on this very important subject. The Government pay around £7,000 per head per taxpayer in England, and yet they pay £8,500 for every Scottish taxpayer. Does he agree that if that subsidy were reduced, we would have more money across the country to cut fuel duty?

[Stewart Hosie]

I am always surprised when otherwise articulate, able and intelligent Members do not see the whole picture. When one looks at total tax and total income, rather than the mere, modest fragment of net identifiable expenditure, one sees a rather different story. Prior to the recession—independent figures stand this up—Scotland was about £50 billion in, £50 billion out. As the hon. Gentleman will recall, the UK ran a £0.5 trillion debt before the recession, so his argument is not particularly helpful, and nor does it really pertain to today’s motion.

Of course, some business sectors are hit rather harder than others. Some businesses have a little leeway in their pricing policy, but some have none. I was struck by the comments of Bill McIntosh, the general secretary of the Scottish Taxi Federation, who said:

“Taxi drivers”—

it is an important trade—

“are affected more than most by increases in fuel. Unlike other transport operators, taxi drivers can’t just raise their prices as fares are set by local authorities…The Scottish Taxi Federation welcomes and supports the proposal for a fuel stabiliser.”

That is important. The sector has a fixed pricing structure that it cannot adjust and rising input costs.

Many haulage firms—this is an extreme example—have already agreed long-term future contracts with a fixed price. There might be some variation, depending on the uplift in fuel, but it is unlikely, under the contractual arrangements, that they could be compensated for the very quickly and steeply rising input prices. In my view, the haulage sector suffers the largest single impact. According to the Road Haulage Association, operating costs have risen by 3.3% since last October. It tells me that fuel accounts for more than a third of the sector’s business costs, and that, in cash terms, an average rise is expected this year of £4,206 on the basis of increases over the past three months alone. That is quite extraordinary—an increase of £4,206 in the running costs per truck.

I suspect that that is why Phil Flanders, the Scottish and Northern Ireland director of the RHA, has said:

“The RHA…supports the SNP/Plaid Cymru motion to urge the Government to take immediate action to resolve the increasingly difficult situation that hauliers—and motorists—find themselves in due to the cost of fuel.”

He went on to say that it has always supported these

“proposals for a fuel duty regulator in order to bring stability to the costs of a haulage business where fuel”

in some places

“can account for around 40% of running costs…Whatever it is called—a stabiliser or a regulator”—

or a modulator—

“help is urgently needed for all hauliers and particularly those further from their market such as those in Scotland, Wales and Northern Ireland. Remote rural communities also deserve special help given the exorbitant price they have to pay.”

I will say more about that later. He continued:

“It cannot be stressed strongly enough that in the past year fuel prices have gone up by at least 14% and in the last 28 months there have been 8 fuel duty hikes amounting to a 25% increase. This is just simply unacceptable for the economy.”

I share that view entirely.

The Freight Transport Association has followed up that support and welcomes the effort

“to develop the fuel duty debate further. Lives and livelihoods up and down the country are suffering in the face of unsustainable and crippling fuel costs. For businesses still in the grip of tough trading conditions these costs severely restrict cash flow and a company’s ability to do business; sadly this can translate to job losses and the difference between solvency and insolvency.”

It says that when the price of fuel

“rises steeply it has an immediate impact on a company’s cash flow.”

Given how the banks are behaving, with credit tight and squeezed, cash flow is vital.

The FTA also says:

“As part of the Fair Fuel UK Campaign, the Freight Transport Association and the Road Haulage Association, along with backing from the RAC, are asking government principally to scrap the fuel duty rise planned in April and introduce a methodology for stabilising fuel prices.”

Indeed, Fair Fuel UK, which is supported by 20,000 road freight companies, the Royal Automobile Club, dozens of trade associations, other groups and tens of thousands of individual motorists, has said that it supports today’s attempt to raise this issue and its impact on the economy on the Floor of the House. It said that this

motion and debate will…add pressure to the Government to act”,

and act quickly, on what it calls a “fuel crisis”. There is no doubt that this is a crisis. It is also clear that there is not only an assessment of a real, immediate and serious problem, but a clear coalescing of those at the front line about the introduction of a stabiliser as the primary solution.

This is about not simply a fuel duty regulator or stabiliser, however, but the specific problems in remote areas.

[Mr Alan Reid (Argyll and Bute) (LD)]

The hon. Gentleman has outlined the problem, but he has not given the solution. He has spoken for 18 minutes, but has not told us how a stabiliser would work. I would like to hear how it would work, so will he please explain it to us?

[Stewart Hosie]

The hon. Gentleman has been here long enough to know that this is an Opposition day motion. If he waits until the Finance Bill, I am sure that both I and his hon. Friends will be happy to put forward detailed proposals and provisions, as we have all done on a number of previous occasions. Had he been listening to my response to an earlier intervention, when I explained how the proposal was due to work, he would know that we suggested it in 2005. We presented an amendment in 2008, and the then Conservative Opposition proposed something similar in July 2008. If he holds his horses, I suspect that we will have the detailed provisions for such a mechanism soon enough.

[Mr MacNeil]

Will my hon. Friend give way?

[Stewart Hosie]

I am going to make some ground.

This motion is not simply about the fuel duty regulator; it is about the problems in remote areas, where there is no choice but to drive. In a debate on introducing a rural fuel derogation in 2006, the argument was put as follows. The purpose of the proposal—on that occasion contained in a new clause—was to

“enable the Treasury to specify lower rates of duty on fuel to apply in remote rural areas. Hon. Members will know that article 19 of the European Union’s energy products directive allows member states to apply for a derogation to allow lower duty rates in specified areas. In October 2004, the French Government, with the support of UK Ministers and Ministers of other member states…did just that, following the example set by the Portuguese and the Greek Governments in previous years.”

The argument for applying such a measure in the United Kingdom rested on

“the very serious economic impact that higher fuel prices in rural areas have on areas such as the highlands and islands of Scotland. The truth is that people…in remote areas such as the highlands and islands are victims of a triple whammy. They pay higher fuel prices and have much longer distances to travel, with few or no alternatives to making those journeys by car. Unavoidably, they spend more on transport than others and therefore also contribute more to the Treasury. Motoring costs represent some 18 per cent. of total household expenditure in rural Scotland compared with 13 per cent. across the rest of Scotland.”—[Official Report, 4 July 2006; Vol. 448, c. 738-39.]

Those were not my words; they were the words of the current Chief Secretary to the Treasury. I am disappointed that he is not here to stand by his words and make a commitment to drive forward a rural fuel derogation at the earliest possible opportunity.

[Mr Reid]

rose—

[Stewart Hosie]

Before the hon. Gentleman gets to his feet, let me remind him that when the Liberal party last proposed a rural fuel derogation, we backed it. I suspect that some of his colleagues were less forthcoming in backing proposals that we had made, although there were some honourable exceptions who wanted to.

[Mr Reid]

Now that the Liberal Democrats are part of the Government, the hon. Gentleman should be pleased that the rural fuel derogation is going to happen. We tried for years and the Labour party knocked us back, but now that my right hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) is the Chief Secretary to the Treasury, the rural fuel derogation for the islands is going to happen.

[Stewart Hosie]

I am delighted to hear that the rural fuel derogation is going to happen. I cannot wait to hear that from a Minister, because the reports that I read earlier tended to indicate a little confusion in the Government’s ranks. I hope that that happens soon, for the following reasons.

In the final bit that I want to quote from the Chief Secretary’s speech in 2006, he said:

“Median earnings in the highlands and islands are some 85 per cent. of the UK figure, so the inequitable situation”

that he had described

“hits an already poorer region very hard.”

He said that, before coming to the Chamber, he had conducted

“a random survey of pump prices for a litre of unleaded petrol. In Aviemore in my constituency…the…price is 99.9p per litre. In Dalwhinnie, a little further south, it is 102p per litre. In Thurso, in the constituency of my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), it is 102p per litre. In Lerwick, in the constituency of my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael), it is 106.9p per litre. By comparison, at Asda in Leeds the price is 92.9p, while in Morrison’s in Camden in north London, it is 90.9p.”—[Official Report, 4 July 2006; Vol. 448, c. 739.]

In preparation for today, we were told by the AA that petrol cost £1.34 a litre in Portree and £1.42 a litre in Stornoway. With prices now more than 30p a litre more than four years ago, that means an increase of more than £1.30 a gallon—many hon. Members will remember when that was what a gallon of petrol itself cost. If the argument was correct then, when the price was between 90p and £1 a litre, it is even stronger today, when the price is £1.30 a gallon more.

[Mr MacNeil]

Does my hon. Friend remember just how full the Chamber used to be of Liberal Democrat Members when the prices were 30p a litre cheaper? Now, following the massive increase in prices and the real rural pain being felt as a result, where are they? I see two Liberal Democrats here today. Any more? Please stick your hands up! No, just two Liberal Democrats. Shocking!

[Stewart Hosie]

My hon. Friend makes his point in his own inimitable way. I have to say that I cannot remember a time when the House was ever full of Liberal Democrats, but I think I know what he means.

I want to raise three specific issues in relation to the vital importance of the rural fuel derogation. In urban, built-up areas, 95% of people live within 13 minutes of a bus stop with a service more than once an hour. That compares with less than half of residents in villages and hamlets. Before any Member gets up to make a point about that, let me say that I know that there are parts of every constituency in which there are no bus stops, no bus services and no choice but to use a car.

[Mr Weir]

I am following with interest what my hon. Friend is saying. Did he read the report in The Guardian this morning which suggested that many English local authorities were slashing their subsidies on bus routes, which will lead to the closure of those routes in many rural areas? Does he agree that that would make the situation very much worse in rural areas of England as well?

[Stewart Hosie]

I have not seen that report, but those developments will clearly make things difficult in areas that depend on those subsidies. I hope, in the light of the price of fuel, that local authorities and the Government will try to ensure that as many bus services as possible, particularly lifeline services, are maintained. The key point about living in remote and rural areas is that there are fewer alternatives available, and in some cases, no alternatives at all. The use of a car in those areas is vital.

[Hywel Williams]

The lowest wages in Wales are in Powys, in the middle of Wales. Powys also has the highest incidence of car ownership, with many families having to run two cars because of the lack of public transport.

[Stewart Hosie]

My hon. Friend touches on an important point. It has been mentioned already that car ownership is normally a sign of wealth and affluence, but in remote, rural and sparsely populated areas, people on almost every level of income, including those on low and modest wages, require a car. That results in their spending a disproportionate amount of their net disposable income on fuel.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

A further point that the hon. Gentleman will recall from the many debates that we have had on this subject is that people in my constituency and elsewhere who earn below the average wage often cannot afford to buy good, modern cars. Their cars are therefore much more costly to run. That is part of the triple whammy that I remember talking about six or seven years ago.

[Stewart Hosie]

There are whammies after whammies, and the hon. Gentleman is right to say that the use of a car can be a necessity, and that people have to buy whatever they can afford. Also, if the roads are not quite as good as they ought to be in remote and rural areas, that can pose its own problems, especially in winter.

There are three key issues in this debate. The first is the lack of choice, which is very important. The second, which I hope urban Members will recognise, is the fact that the average mileage per year travelled simply to access essential services in rural areas is 8,794 miles. The comparator in urban areas is 5,200 miles. So the people in rural areas have no choice, and the distances that they have to travel are far greater. On top of that, the third factor is the price of fuel.

I am grateful to the BBC, which reported on 22 January that the RAC Foundation had found that some filling stations in Orkney were charging £1.50 a litre, which is £6.82 a gallon. An increase of only 4p or 5p per litre would result in the £7 gallon, which, because people have no choice, they would have to pay in order to travel the greater distances necessary in rural areas to access the services that most of us take for granted.

The time for talk and promises on fuel is over. There is now an absolute necessity for the Government—both bits of them—to deliver on their promises. We need to put the stabilisers on rocketing fuel prices now, before the brakes are slammed down on any chance of economic growth.

17:00

[The Economic Secretary to the Treasury (Justine Greening)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“notes the dramatic increase in the world oil price to over $100 per barrel; further notes that there has been a significant impact on fuel prices in the UK as a result; recognises the impact this has on households and business; notes that the previous administration’s rises in fuel duty that have taken effect during the past year have further increased prices; further notes that the Government inherited the largest deficit in UK peacetime history, that the previous administration had no credible plan to deal with the deficit, that the Government has been clear that everyone will make a contribution to tackle the deficit but that the most vulnerable will be protected, and that the Government is considering a fair fuel stabiliser that could support motorists and businesses when oil prices are high; further notes that the Government in addition is taking forward swiftly its commitment at EU level to introduce a pilot scheme that would deliver a discount of up to 5 pence per litre in duty in remote rural areas such as the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly; and further notes that the Chancellor will update the House on all fiscal matters at the time of the Budget.”

We have long recognised on this side of the House—both parties in the coalition Government—that the price of fuel has been a very difficult issue for motorists, businesses and families up and down the country. I know that it is a particular concern for people living in our rural communities, and no doubt many Scottish Members who hope to participate in the debate will make points on behalf of their constituents and echo the concerns set out by the hon. Member for Dundee East (Stewart Hosie). I am sure that other Members representing rural seats will also want to set out their concerns.

There is no doubt that rising oil prices and their impact as they feed through to the petrol pump have been a real concern. In fact, even before we came into office, both coalition parties had committed to looking at the issues surrounding the cost of the fuel, as the hon. Member for Dundee East has pointed out. Let us be clear, however, that the last Government chose completely to ignore this whole area. They believed that the challenges posed by these problems were too great. When we were talking about alternatives to help families, hauliers and motorists, they said that it was all too difficult and that the issues were way too complex.

Let me state at the outset that we would be interested to hear from the Opposition whether they stand by the fuel duty escalator—the one that they put in place before the election; it is a bit like reaching from the political grave into taxpayers’ pockets. Or do they believe that that policy was a mistake? Are we to be treated to the spectacle of Labour Members arguing not only against the Government’s measures across a whole range of areas, but against the measures they put in place before being booted out of office? We have taken a very different approach to fuel prices to that of the last Government.

[Mr Weir]

I am listening carefully to the hon. Lady and it is not my place to defend the Labour party, as we spent much of the last Parliament attacking the Labour Government and their fuel policy, which was disgraceful. It is interesting to see that so few Labour Members are here today. However, the Economic Secretary is now in government: what is she going to do and when is action going to come? The problem is getting worse by the day, and unless action is taken soon, it will be too late for many businesses in rural Scotland.

[Justine Greening]

I can assure the hon. Gentleman that I shall set out our approach to policy in this regard in the run-up to the Budget in my further comments, but we need to recognise that the fuel duty escalator was put in place by the last Government. They have, I believe, a blank piece of paper that is called their economic policy, and they owe the House the honesty of being transparent about whether they believe that putting that policy in place was the right or the wrong thing to do.

[Mr MacNeil]

Far be it for me to draw it to the hon. Lady’s attention, but since last May she has been in government. We want to know—in Lewis, in Harris, in North Uist, Benbecula, South Uist and Barra—what she is going to do about the price of fuel.

[Justine Greening]

The hon. Gentleman will be pleased, as I have looked at the Scottish National party website today and seen the letter he wrote to voters last April, in which he said that it was the SNP who first called for this “derogation” for fuel areas. I can assure him that I am getting on with that very policy.

[Mr MacNeil]

rose—

[Justine Greening]

Presumably, the hon. Gentleman wants to intervene again to welcome the efforts of the coalition Government.

[Mr MacNeil]

I will welcome those efforts when they bear some fruit. We had four years of shilly-shallying from Labour—and I do not want to hear any more shilly-shallying from any Government from the Treasury Dispatch Box.

[Justine Greening]

In that case, I can tell the hon. Gentleman how he can help. It would be helpful if his party wholeheartedly supported the Government’s proposal to the European Union and the European Commission as we go through the process of securing the derogation. I assure him that we will be more powerful if we adopt a cross-Government, cross-devolved-Administration approach.

[Stewart Hosie]

The Minister is asking the Scottish National party and our friends to support the Government’s efforts in Europe. Will she please tell us whether the Chief Secretary has finally managed to write to the European Commission asking for the derogation?

[Justine Greening]

The hon. Gentleman will be aware that the derogation will come about as the outcome of a process. He seems to be asking me whether we are getting on with that process, and how much progress we have made. I trust that if I explain what the process is, what we have done so far and what will happen next, he will have been given so much information that he will find it necessary to take a more considered approach.

Let me explain the timing involved in the process leading to European Union and Commission clearance. We must begin by undertaking informal talks with the Commission abut the implementation of the scheme. That will give us a better chance of presenting a proposal that it will agree is, as it were, right first time. As Members have pointed out, similar schemes exist in other countries. It is sensible for the Government to engage in a process that includes talking informally to the European Commission about those schemes, and about the ways in which our scheme may resemble or differ from them.

[Mr MacNeil]

Will the Minister tell us how long it has taken other Governments to proceed from the informal talks stage to implementation of a rural fuel derogation, and how long she thinks it will take this Government to do so? Time is of the essence.

[Justine Greening]

Obviously it will not be a short process involving a few weeks, but I think that the hon. Gentleman and his party know from their experience of the process involved in calling for the derogation that the route that we are taking can provide real support for motorists in rural areas.

[Robert Halfon]

rose—

[John Thurso]

rose—

[Justine Greening]

I will give way to my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), because he tried to intervene earlier.

[John Thurso]

I think I heard the Minister quote from a letter from members of the SNP saying that they had thought of the derogation first. In fact, it was first raised in the House of Commons in 2000 by my predecessor in the constituency, now Lord Maclennan. I fleshed it out in a debate that I held in Westminster Hall in 2001, and I think I have raised it every year since then. Given that the matter was raised over a period of 12 years, is it not commendable that this Government have done more in six months than the last Government did in those 12 years?

[Justine Greening]

I agree with my hon. Friend. I too remember his party, before it joined the coalition Government, making the case for a rural fuel rebate.

I now give way to my hon. Friend the Member for Harlow (Robert Halfon), who tried to intervene earlier.

[Robert Halfon]

I welcome the debate, because hard-pressed constituents of mine, especially small businesses and families, are suffering hugely as a result of high fuel costs. May I make a special plea? National health service workers in my constituency who have to use their cars to visit patients receive tiny fuel allowances—in some cases, only 12p per mile—which remain the same regardless of the price of fuel. Will my hon. Friend consider changing the guidelines so that NHS workers need not suffer in that way?

[Justine Greening]

I shall ensure that I respond to my hon. Friend on that issue. A variety of concerns about the cost of motoring have been expressed in constituencies throughout the country in recent years.

I hope I can reassure Opposition Members that we are getting on with the process of requesting a derogation by trying to arrange some pilot schemes. I am sure they will be pleased to learn that, although we are still considering the exact scope of the pilots, we have announced our intention of including the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly, should we be given the necessary dispensation. I assure Members that we are pressing ahead as fast as we can, and we should appreciate their support in helping us to complete the process. I hope that they will be able to overcome any political barriers, do the right thing and back up the coalition Government as we go through this process over the coming months.

We recognise the importance of fuel prices to motorists and businesses. While we are looking at options in the run-up to the Budget, which I will discuss this afternoon, we can have one of two debates today: we can continue to argue about the problem and waste the opportunity presented by today’s debate by scoring points, or we can have a frank and open debate about how to reach the best solution and how we can find common ground. For instance, do we agree that the price of fuel and the affordability of motoring are important for motorists? The answer is yes. Do we agree that the unpredictable way in which the oil price fluctuates can create difficulties for households and businesses when it comes to budgeting? The answer is yes, although the Labour party never recognised that point in government, and I doubt whether it recognises that point in opposition—if it does, perhaps the hon. Member for Bristol East (Kerry McCarthy) will explain why it has suddenly changed its mind after having been booted out by the electorate.

[Kerry McCarthy (Bristol East) (Lab)]

I am pleased that the Economic Secretary wants to have a constructive debate this afternoon and does not want to engage in party political point scoring. Given that conciliatory approach, will she confirm that a Conservative Government were the first to introduce the fuel duty escalator at 3% in the March 1993 Budget, which they increased to 5% in the November 1993 Budget?

[Justine Greening]

The hon. Lady wants to go back into history. The previous Labour Government left a huge fiscal deficit, and we have to get to grips with those ginormous debts, so the position is entirely different. The previous Labour Government left not only debts and deficit, but tax rises that will unfold over the coming years. In opposition, the Lib Dems and the Conservatives discussed helping motorists, and we still want to see what we can do to help them. Given the state of the public finances when they were handed over to us, the Labour party in opposition should be thoroughly ashamed. We have waited in vain for an apology to the British people for the state of the public finances, and I suspect that we will have a long wait before we hear any of them say, “Sorry.”

The most depressing thing is that the main adviser to the former Chancellor and former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), is now shadow Chancellor. It is like returning the car keys to the man who crashed the car in the first place, which is the worst thing for the British electorate.

[Mr Stewart Jackson (Peterborough) (Con)]

The issue is not about going back into pre-history to discuss what a previous Conservative Government did 18 years ago. Her Majesty’s Opposition are not willing to make it clear where exactly the 20% public expenditure cuts would come from to pay for their opposition to tax rises. Is that not the real issue? We are paying £120 million a day in debt interest because of their debt legacy.

[Justine Greening]

My hon. Friend is right. We do not even know whether the Opposition think that going ahead with the fuel duty rise, which they planned, is a good idea. We know that they rejected calls from Opposition parties to look at alternatives when they were in power. Perhaps the hon. Member for Bristol East will explain her party’s position today.

My hon. Friend is also right to point out the difficult challenges that the current Government face. He has rightly pointed out that the level of deficit and debt that we have been left as a country costs the British taxpayer £120 million every single day. To put that in the context of a 1p a litre rise in fuel duty, which is worth £500 million, the British taxpayer will pay as much in debt interest over the course of four or five days as they will pay in fuel duty, if fuel duty is subject to a 1p a litre rise. That demonstrates two things, the first of which is the importance of tackling the deficit. Clearly, this country cannot continue to pay this expense of £120 million a day and it has to be tackled, because we are spending more on servicing our debt than on transport. The challenge for this country is that if we do not get this £500 million of real money from fuel duty, it has to come from somewhere else. The Government have made it clear that they want to try to protect key spending, for example, on the NHS—the Labour party did not want to do that—and schools.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Does the hon. Lady agree that it would be unfair for the disproportionate burden of that tax to fall on people in rural and remote areas?

[Justine Greening]

As I have said, the Government recognise the particular pressures that motoring costs put on people living in rural areas, which is one of the reasons why we want to try to get a derogation and undertake pilot schemes in some of those areas to see whether we can implement a rural fuel rebate. I hope that the hon. Lady acknowledges that we recognise those challenges.

[Naomi Long (Belfast East) (Alliance)]

Does the Minister recognise that this is about not only the significant issue of rurality but remoteness from the marketplace? In Northern Ireland, it can be incredibly difficult, even in urban constituencies such as mine, for those who wish to trade to reach the marketplace; added costs can be involved, reaching from Northern Ireland on to the UK mainland.

[Justine Greening]

The hon. Lady is right in that few Members in this House would not have their own particular reasons for raising the issue of the cost of motoring with government. This issue is clearly a real challenge, which is why the Conservative party acknowledged it in opposition and said that we wanted to examine how we could tackle some of the key issues.

The hon. Lady also referred to the impact of fuel duty on businesses. That is one of the reasons why our emergency Budget introduced a package of corporation tax reductions for companies, as she will recall. Small companies will now face a corporation tax rate of 20% whereas they were facing a rise to 22% under the previous Government. We also introduced reductions in national insurance, getting rid of the worst effects of the proposed jobs tax. We can support businesses in a number of ways to help them through a very challenging economic situation created by the previous Government.

[Mr Weir]

I reiterate a point that I made in last week’s debate about the Department for Business, Innovation and Skills: the Government keep saying that they have reduced corporation tax and although that is welcome for small companies, very many small businesses in our areas do not pay corporation tax. They are single traders or partnerships that pay income tax, so they are not being helped by these measures and being hammered by the VAT rises and the fuel cost rises.

[Justine Greening]

The hon. Gentleman will know that alongside those measures to support companies, particularly small ones, I could have mentioned the regional growth fund and the regional reduction in national insurance for new start-up companies creating new jobs. He will also be aware of the rise in the personal allowance, which has removed about 880,000 people from paying income tax altogether. We have also raised the threshold for national insurance, which means that employers no longer have to pay employer national insurance for thousands of employees. Across the board we are doing what we can, despite the challenging financial deficit left to us. We are doing what we can to make sure that we tackle the overriding priority of sorting out the deficit—that is what we have to do. For motorists, companies, families and unemployed people wanting to get back into the employment market and get a job, we have to get the economy back on its feet and public finances back on a sustainable footing. At the same time, we understand the pressures and challenges for motorists.

As things stand, there are alternatives for the devolved Administrations. I have to challenge hon. Members representing the Scottish National party in Scottish constituencies on whether they have considered using some of the devolved Administration budget to fund their own grant scheme to support motorists in their areas. They have taken different decisions on tuition fees to those taken in England and there is now additional scope for them to see this issue as a priority for their spending, as well as for the national Government to consider how we might be able to help in terms of tax policy.

[Mr MacNeil]

I want to ensure that the hon. Lady is aware of the importance of what the devolved Scottish Government—in what is an independent Parliament without the powers of independence—have done for the Outer Hebrides. We have introduced road equivalent tariff pilots, which have substantially reduced transportation costs, but the difficulty is that when the Scottish Government produce schemes that stimulate and grow the economy, the tax revenue goes not to our Government but down to Westminster. We are doing good work, but there is a double whammy: as we stimulate the economy, Westminster benefits, and then it comes and sticks on a fuel tax—thank you!

[Justine Greening]

I think the hon. Gentleman is taking the debate slightly wider than the wording in the motion. However, I will say to him that the measures we are taking are designed to get our economies in his part of the United Kingdom and the rest of it back on their feet. I hope that he welcomes the tax reductions we are bringing forward.

[Stewart Hosie]

Will the hon. Lady give way?

[Justine Greening]

I will give way one last time, and then I shall make a little progress. I have been generous in taking interventions.

[Stewart Hosie]

The hon. Lady has been very generous indeed. She asks us to welcome the actions that the Government have taken in terms of a deficit consolidation plan. I like and respect her, but I will never welcome a £1.3 billion cut to the Scottish budget this year and a £3.2 billion cut to the Scottish block over the next four years. That is the wrong thing to do in terms of stimulating economic growth and growing our way out of the recession. If we could focus on the fuel duty, that would be particularly helpful, unless of course she wants to devolve the duty to Scotland, in which case I would be absolutely delighted as we could take all the right decisions.

[Justine Greening]

I am sure that the hon. Gentleman will be aware of the Goodison review and that the Scotland Bill is passing through Parliament right now. We are making some changes on tax, and I think he will welcome those measures to strengthen the devolution settlement.[Official Report, 15 February 2011, Vol. 523, c. 3MC.]

I shall now, as I am sure the hon. Gentleman would like me to, address my comments to the measures we have been talking about and what we are considering. Only this Government have been looking at how best to help drivers, including those in Scotland and Wales. We have demonstrated our concerns about these issues both before and since coming into government. Indeed, one of the first things that the coalition Government did was to get the Office for Budget Responsibility to look at how oil prices affect the economy and feed into public finance.

This is a complex issue, and we have to make sure that whatever we do is not only fair but affordable. It would not be right of me to pre-empt the Chancellor or the Budget, but, as we promised in the June Budget, we are considering a range of options. We have already discussed the rural fuel duty rebate. The Government understand the challenges faced by people in rural areas in relation to fuel costs, which those of us in city and urban areas perhaps do not face. I know that those people cannot easily shop around nearby petrol stations to get the best deal in the way that other people can. I understand the arguments about the lack of public transport as an alternative and that the car is often the most realistic mode of transport. That is precisely way we are working towards getting a derogation so that we can get on with putting in place pilots to look at how a rural fuel rebate would work.

[Dr Whiteford]

Is it intended that at a future date the derogation pilots should extend to other rural and remote parts of Scotland not included in the current pilot scheme?

[Justine Greening]

We have yet to decide the exact scope of the pilots. I assume from her question that the hon. Lady would like her area to be included. No doubt she will write to me formally. I will take her comments on board. As I said, we are already working towards putting in place the pilots for a rural fuel duty rebate which will reduce the cost of fuel in the most remote areas of Britain. As with trying to tackle the feed-through of unpredictable oil prices to the pump prices, the previous Government rejected that outright, but the coalition Government are committed to getting it under way.

As my right hon. Friend the Chief Secretary announced in October, we wish to conduct a rural fuel duty pilot and look at how a rural fuel duty rebate could work in practice. We want to examine the underlying issues and see how that could be applied. The initial pilot could deliver a duty discount of up to 5p per litre on all petrol and diesel. That would save some drivers in rural areas upwards of £500 a year.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

As part of the derogation, will my hon. Friend please make sure that the definition of “rural” is a great deal more scientific than it has been in previous attempts? Will she also make sure that the interests of Wales are not left out?

[Justine Greening]

My hon. Friend makes a relevant point. One of the reasons that our initial discussions with the European Commission are so important is that they are an opportunity to scope properly any rural fuel duty rebate, why we would introduce it, where it would apply and the basis on which it would take place. In other countries, specific arguments have been made for the particular areas where such rebates were allowed by the European Commission. The benefit of going through the process, as we are doing, is that it maximises the chance that any proposal that we make will be given the go-ahead.

[Mr Stewart Jackson]

I thank the Minister, who is being very generous. The House will forgive me if I do not join in the excitement of our Scottish colleagues at the largesse of my English taxpayers footing the bill for their constituents. Will my hon. Friend take representations from areas such as mine, which is a travel-to-work area and essentially urban, but where there are pockets of social deprivation and low wages, such as the fens? In future, will she and her colleagues perhaps consider that such areas also require some support and assistance from the Treasury with significant increases in fuel duty, which have an impact on working life there too?

[Justine Greening]

My hon. Friend, as ever, represents his constituents powerfully. The point I would make to him and to the House is that we have inherited a huge fiscal deficit and eye-watering levels of debt, and we have to get the public finances back on to a sustainable footing. We must make sure that the economy is back on a sustainable footing too, creating long-term jobs, and that the economy is balanced so that it is less exposed to the peaks and troughs of economic winds than it was, perhaps, over the past decade.

That is the best way to help people across our country so that they are less reliant on Government giving them this, that and the other, and so that they can be reliant on themselves and choose where they spend their money and what they spend it on, instead of being reliant on somebody from Whitehall telling them.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

Does the Minister recall that when the fuel duty escalator first came in, it was meant to be a green tax? The environment was meant to benefit from the imposition of that year-on-year tax. As far as I know, it has not benefited the environment. It has just been a nice little earner, and now it is terribly heavy on rural dwellers and in the urban context as well. I, for one, appreciate the fact that Government are looking at the issue, and I hope they come up with a fair solution.

[Justine Greening]

There is undoubtedly an environmental aspect to how fuel duty changes over time, because people do change their driving behaviour. The hon. Gentleman’s point is that clearly we are all concerned about the affordability of motoring, which has been an issue in the past few years, and particularly today. In the long term, of course, the best move is to help people not to have cars that are so dependent on petrol and diesel and therefore prey to the fluctuations in the oil price market in the first place, but that is a debate for another day. That ties in to his earlier points about the environment.

Let me wrap up my remarks, because hon. Members wish to speak and I do not want to take up any more time. We are considering the exact scope of the rural fuel rebate scheme, and Members from Scotland will welcome the fact that the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly will certainly be included. It is not quite as simple as people suggest; there is complexity, so we are taking some time to work through it.

[Katy Clark (North Ayrshire and Arran) (Lab)]

The Minister has taken a number of interventions, which we are grateful for. I have written to her about part of my constituency, the Isle of Arran, where fuel prices are often the highest in Scotland. There has been a great deal of debate about what criteria will be used to choose the pilots being considered. Arran already does badly as a result of the equivalent scheme brought in by the SNP Administration in Holyrood, so will she look at Arran when considering these issues and perhaps expand on the criteria that will be used, either today or at a future opportunity?

[Justine Greening]

I can only reiterate what I have just said, which is that we are considering the exact scope of the scheme, but it is helpful to hear some of the issues that Members have in their constituencies. We are pressing ahead and will need European approval.

[Kerry McCarthy]

Will the Minister give way?

[Justine Greening]

I will give way one last time.

[Kerry McCarthy]

The Minister is being very generous. I am slightly confused, because my understanding was that it was Conservative party policy to look at the fuel duty stabiliser and Liberal Democrat policy to look at the rebate and the rural derogation. She has spoken for more than half an hour and focused almost totally on the rural derogation, so will she, before concluding her remarks, tell us the current position on the fuel duty stabiliser?

[Justine Greening]

I think that I have been very clear on that. In opposition and in government, we have always recognised the impact on motorists of the unstable oil price, which feeds through to pump prices. In setting up a stabiliser, we need to ensure that it works as intended, so the first step was to ask the Office for Budget Responsibility to look at how oil prices feed into the economy and affect public finances. We have commissioned that work, as the hon. Lady will know, and now need to take on board its outcomes before looking at how it feeds into policy making. It would not be right to pre-empt the Budget. Indeed, when the hon. Member for Dundee East was asked for further details, he said that he needed some time, which indicates that this is a complex policy area—too complicated for the Labour party when it was in government.

In conclusion, we want to treat motorists fairly, but we must also act responsibly by ensuring that we tackle our record national debt and the financial deficit, which will not be easy. I will not hide from the House the fact that that is a difficult balance to strike, so difficult that the previous Government chose to ignore it completely. That is also the approach they have adopted for tackling the deficit, offering no credible alternatives to our policies and, in the case of fuel duty, no viable alternatives to their own policies, because it is their fuel duty escalator that is causing the problems.

Once again, it has been left to the coalition Government to clear up the mess left by the Labour Government and look at how we can reach a fair resolution on fuel duty, get our economy back on its feet and support our businesses, families and, in this case, motorists. I look forward to the rest of the debate and hope that we can have an open and honest discussion on the problems faced by motorists across the country and possible solutions. I look forward to hearing from Members in the run-up to this year’s Budget what they think is the best way forward.

16:19

[Kerry McCarthy (Bristol East) (Lab)]

I congratulate the hon. Member for Dundee East (Stewart Hosie) on making a powerful case on behalf of his constituents—along with the interventions from his colleagues—about the impact that people living in remote rural areas can feel as fuel prices go up. He did make a very powerful case on behalf of his constituents, and Labour Members do understand the impact that motorists are feeling as fuel prices go up. I might represent an urban seat, but as a Member of Parliament in the south-west I am very much aware of the issues that are faced.

[Stewart Hosie]

I thank the hon. Lady for saying that I made a powerful case, but Dundee East is very much an urban seat. It has a rural hinterland of course, but my constituency is half the city. I know where Bristol is; a wee bit of geography would be great.

[Kerry McCarthy]

The hon. Gentleman makes a valid point. He was speaking on behalf of his colleagues in the more remote parts of Scotland, obviously, rather than on behalf of his own constituents. I thought that perhaps his constituency stretched a little further than the city boundaries.

For Governments, when considering fuel duties there is always a difficult balance to be struck among the needs to raise revenue and balance the public finances; to address environmental concerns about increasing road traffic and emissions, to which there has not been much reference in this debate; and to ensure that the motorist and especially people who have to rely on their cars—people who do not have a choice because of where they live and the environment in which they live—are not disproportionately penalised. The previous Labour Government endeavoured to strike that balance, despite the points that the Economic Secretary to the Treasury made. That was why, for example, in years when fuel prices rose, Labour chose to put the fuel duty escalator on hold—to help motorists meet those rising costs. It is a tricky balance to strike, however, as today’s debate demonstrates, and there are no easy answers.

[Justine Greening]

To clarify matters, is the formal Labour party position that the fuel duty rise should now go on hold?

[Kerry McCarthy]

If I can adopt the mantra that the hon. Member for Dundee East first used and the Minister then picked up on, I should say that that is a matter for us to discuss when we get round to the Budget negotiations. Today, we are here to discuss the two main proposals to ameliorate the impact of rising fuel prices, particularly on rural areas. We are talking about rural areas, rather than about fuel duty prices across the board.

The dog that has not barked during this debate—the thing that was most noticeably missing from the Minister’s speech—is the fact that motorists are being hit hard by the increase in VAT to 20%, which has helped push petrol prices up to their current record levels.

[Stewart Hosie]

It suddenly strikes me that, when the Labour Government had their fiscal stimulus policy, they cut VAT by 2.5 percentage points and increased fuel duty by 2.5 percentage points to compensate, but that, when VAT went back to 17.5%, the fuel duty rise was maintained. Does Labour now regret not reducing fuel duty in line with the increase in VAT?

[Kerry McCarthy]

Those matters were also affected by fuel prices at the time, but it is not my position to apologise for, or to express an opinion on, what my predecessors did.

The VAT rise now is the important thing. VAT went up at the beginning of the year from 17.5% to 20%. According to the Library, the VAT rise increases the cost of a litre of petrol by about 2.6p, assuming that it is passed on in full. That compares with the fuel duty increase in January of 0.76p per litre, so the VAT rise to 20% is hitting the motorist harder and people in rural areas, who rely on their cars most and have to travel longer distances, particularly hard.

[Mr MacNeil]

Is there any tinge of regret among Labour Members that for at least four years the previous Government did absolutely nothing on a rural fuel derogation?

[Kerry McCarthy]

I will deal later in my speech, if I may, with the rural fuel derogation and the problems that we see in implementing it.

The VAT rise did not have to be imposed. It flew in the face of all the warm words that Conservative politicians uttered before the election about ending the war on motorists, helping hard-hit families and keeping fuel costs down, but now it has been done and motorists are paying the price.

Let me turn to the fuel duty stabiliser, or regulator, which the Minister glossed over very quickly.

[Mr MacNeil]

If we are talking about glossing over, I feel that the hon. Lady glossed over my question. Will she take this opportunity to apologise for her Government doing nothing for four years on the rural fuel derogation?

[Kerry McCarthy]

As I said, I am coming on to the derogation, but it is not my place to express such opinions.

In principle, on paper, the fuel duty stabiliser sounds like a fairly simple, reasonable proposition—as oil prices go up, fuel duty goes down, and as oil prices drop, fuel duty goes up, so the motorist pays more or less the same for fuel and the Exchequer gets more or less the same in revenue. However, economics are not that simple.

The idea of the regulator has been floated for some time. During the debate on the 2008 Finance Bill, the Scottish National party spokesman, the hon. Member for Dundee East, suggested that a statutory instrument should implement an automatic mechanism so that as additional income from VAT receipts came in, it could be used to offset fuel duty in direct proportion. However, the regulator was based on rises in oil prices, not on rises in VAT receipts. It was assumed that one would flow from other—the hon. Gentleman reiterated that assumption today—but that is not necessarily the case, as the Office for Budget Responsibility has said.

[Stewart Hosie]

Will the hon. Lady give way?

[Kerry McCarthy]

I would like to make some progress.

There are other concerns about the stabiliser. The then Liberal Democrat spokesman, who is now Secretary of State for Business, Innovation and Skills, said at the time of the 2008 Finance Bill debates that the idea of a fuel duty regulator was “unbelievably complicated and unpredictable”. He said that the Exchequer would have to predict the net windfall, and then:

“May I suggest that there might not be any net windfall at all?”—[Official Report, 16 July 2008; Vol. 479, c. 339.]

The OBR has now confirmed that.

Labour’s then Chief Secretary to the Treasury said:

“In the face of a world slowdown, to take any one tax in isolation and claim that there is a windfall available to spend is economically illiterate, irresponsible or just disingenuous.”—[Official Report, 16 July 2008; Vol. 479, c. 331.]

She was basically saying—this was echoed by the hon. Member for Taunton Deane (Mr Browne), who was the junior Liberal Democrat spokesman at the time—that we cannot consider these revenues in a silo. Yes, oil revenues might go up, which might provide a boost to the nation’s finances—although I stress the word “might”, because it does not necessarily follow that increased revenues come from increased oil prices—but other things might happen that affect revenue flows, and it is irresponsible not to look at everything in the round. Hypothecation can box us into a corner and hamper our choices, and that is a real problem in the case of the stabiliser.

[Justine Greening]

Was the Chief Secretary who referred to economic illiteracy the same Chief Secretary who left us, as an incoming Government, a note saying that there was no money left?

[Kerry McCarthy]

No, I was referring to my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper). The Minister may have got the hint when I said “She”.

If a stabiliser were introduced, there is the question of whether the cut in duty would be passed on to the consumer at the pump. That would be very difficult to achieve without further Government enforcement and interference. I am not sure how that would square with the Government’s purported dearly held belief in the free market and dislike for state interference in the operation of the free market.

[Mr Reid]

Yes, that issue must be considered, but the whole point of a pilot scheme is to enable us to work out whether the cuts are being passed on, which the Government would monitor. The hon. Lady’s argument is no case for not having a pilot scheme.

[Kerry McCarthy]

I thank the hon. Gentleman for that intervention, but I am talking about the fuel duty stabiliser. I appreciate his confusion, because that has not been discussed much in this debate. The rural derogation is a separate issue. I am talking about how a stabiliser would be enforced.

Despite the concerns about a fuel duty stabiliser that were raised during the 2008 Finance Bill debates and afterwards, and the obvious difficulties in implementing one, the Conservatives could not resist dangling the prospect of reduced petrol prices before motorists’ eyes. They published a consultation document in July 2008, which proposed the stabiliser:

“when fuel prices go up, fuel duty would fall. And when fuel prices go down, fuel duty would rise”.

That continued to be Conservative party policy until polling day. A week before polling day, the Prime Minister told voters on a visit to a Coca-Cola plant that

“we’d be helping with the cost of living by trying to give you a flatter and more constant rate for filling up your car”.

It was suggested by Conservative politicians in the media that it would be included in the new Government’s first Budget.

Before the election, this Government made all the right noises about tackling high petrol prices. They led the public to believe that they would take action to slash fuel duty and bring down the price of petrol at the pumps. Since then, they have done nothing. Actually, that is not quite true. They have done nothing to implement the fuel duty stabiliser, which they made such a song and dance about before the election, but they have hit the motorist by whacking up VAT to 20%. They have increased petrol prices, not cut them.

Even the Office for Budget Responsibility, set up by this Government to give independent, impartial advice, has said that the fuel duty stabiliser would not work. The underlying economics of the stabiliser contain a simple, basic assumption that when oil prices rise, the Government receive an unexpected windfall from taxes on North sea oil production. The OBR said that that is not the case, at least not in the long term. In “Assessment of the Effect of Oil Price Fluctuations on the Public Finances”, which was published on 14 September last year, the OBR reported that a temporary rise in the oil price would have a negligible effect on the UK public finances, and that a permanent rise would create a loss. The OBR said that it would be difficult for the Government to introduce a fair fuel stabiliser without a significant cost to the Exchequer:

“There is no improvement in the public finances to be used for stabilising the pump price in the case of a permanent shock.”

In fact, a permanent increase in fuel prices would have a negative impact on the public finances after a year, given the effects on demand, inflationary pressures, household income and consumer spending.

[Stewart Hosie]

The hon. Lady seems to be labouring under a misapprehension. The fuel duty regulator would temper spikes. If there is a structural change in the oil price, the baseline figure against which a trigger is measured has to be reset. We have all seen the OBR figures, but the OBR does not say that we should not have a short-term stabiliser to stop spikes; it says that there is no benefit in the long run, as she said. The regulator is designed to smooth out short-term spikes, not to stop structural changes in the oil price.

[Kerry McCarthy]

What I am saying is that a correlation between oil price movements and revenue has not been established by the OBR. In fact, it has said that that is not the case and that in the short term a temporary rise in the oil price would have a negligible impact on revenue. Therefore, the question is what money would be used to offset the stabiliser or regulatory mechanism that the hon. Gentleman’s party wants. If it does not come from the revenue, where does it come from?

[Stewart Hosie]

I remind the hon. Lady that the OBR’s press notice was clear that the temporary £10 rise would deliver an overall effect in year 1 of £100 million. That is not insignificant.

[Kerry McCarthy]

The new head of the OBR, Robert Chote, said in an interview about a week ago that its analysis

“suggested that a fair fuel stabiliser would be likely to make the public finances less stable rather than more stable”.

If a £10 increase in oil prices was passed through, the assumption is that it would add 7.4p per litre at the pump. To offset that would cost £3.7 billion, which is £1.3 billion more than the consequential rise in oil and gas revenues. It might have been a good idea for the Conservative party to carry out that sort of analysis before making promises that it could not keep. All the Economic Secretary has to say today is that the Government will consider the OBR’s report.

I also ask the Economic Secretary what conversations she has had with people in the industry about the impact of fuel prices. I have been contacted by the Retail Motor Industry Federation, which tells me that it has written to the Chancellor and Prime Minister four times about the matter recently, with no response at all. It has stated that the Government have

“made no attempt to engage with industry”

and that it wants the policy of a stabiliser to be dropped, because it would be

“costly and a huge administrative burden”.—[Interruption.]

Sorry, is the Economic Secretary saying that the RMI has not written to the Chancellor or the Prime Minister?

[Justine Greening]

The hon. Lady says that there has been no engagement, which is completely wrong. Only about three weeks ago, we held a workshop on tax policy in relation to travelling and the environment, at which a range of stakeholders from a variety of sectors of the travelling industry came to the Treasury to talk about their challenges. Many said that it was the first time they had been invited in for any kind of constructive discussion.

[Kerry McCarthy]

The Economic Secretary says that as though I were the one saying that there had been no engagement. I am not, it is the RMI that states that the Government have

“made no attempt to engage with industry”.

Perhaps she could place in the Library a copy of the response from either the Chancellor or the Prime Minister to the letter that the RMI says it has sent four times, and copy me in. That would confirm whether there has been an attempt to have a dialogue.

I turn to the other proposal under active consideration, the rural derogation. As we have heard, the Government are planning to pilot it in the inner and outer Hebrides, the Northern Isles and the Isles of Scilly, although from what the Economic Secretary said I am not sure whether those are the definite areas for the pilot or whether the matter is still under consideration. My understanding is that there would be a maximum 5p per litre discount on petrol and diesel sold in those areas.

Will the Economic Secretary elaborate on just how far the informal conversations with the European Union have gone? Have they been about just the pilot scheme, or have there been discussions about introducing the scheme to a significant proportion of the British isles at some time in the future?

Following on from the question that my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) asked, will the Economic Secretary explain on what basis the islands in question were chosen for the pilot as opposed to other remote rural areas? Does she not think that it will be difficult to extrapolate from pilots carried out in island areas how such a scheme would work in remote mainland areas, particularly those from which it is not so far to travel to urban areas where petrol is in greater supply? Will she explain why the pilot scheme is to be so limited, rather than a larger pilot that could have more evidential benefit and be used to show how the scheme would work across the country?

We have a number of other concerns about the rural derogation. There is a long-standing principle that excise duties are charged on a universal basis, and it would set quite a precedent to depart from that practice. As has been said, the scheme would be difficult and expensive to administer, because at the moment duty is levied when oil leaves the refinery, not at the point of retail sale. That takes us back to the point that the hon. Member for Argyll and Bute (Mr Reid) made when I was talking about the stabiliser. How would the system be policed if there were to be differential duty at the point of sale? It sounds like a complex administrative system would be required.

[Justine Greening]

I am trying to follow the hon. Lady’s argument, but it is not clear to me. Will she confirm whether she supports the Government’s attempt to get a derogation in place by introducing pilots?

[Kerry McCarthy]

It is up to the Economic Secretary to answer the questions. We are certainly interested in the conversations that she is having with the EU, but we have major concerns about whether it is practical to take the proposal forward. We would like more information to be convinced that it will solve the problem.

The rural rebate proposal was, of course, a Liberal Democrat manifesto commitment, and it seems that the Government are now taking it up. The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) referred to the fact that he has raised the matter on many occasions over the past 12 years, and when he was his party’s transport spokesman he proposed a duty differential based on the Scottish Government’s method of having eight categories to distinguish between urban, rural and remote areas. Again, that could become quite complex. It would be quite easy to calculate rebates in the case of geographically isolated, sparsely populated areas, but in southern Scotland, where there is more of a patchwork of those categories, it could be difficult.

[Dr Whiteford]

For clarity, will the hon. Lady tell us whether her party is saying no to a derogation and no to a stabiliser?

[Kerry McCarthy]

Again, it is for the Economic Secretary to tell us what her policy is on the stabiliser and so on. We are quite happy to discuss and consider proposals for tackling the problem of increased fuel prices in rural areas. However, when the OBR is telling us that the fuel duty stabiliser would cost the public purse huge amounts of money and be difficult to administer, and when real and valid concerns are being raised about whether rural derogation pilot could be transposed over to mainland Britain, we are right to ask questions and require answers before we decide whether we can support the proposal.

[Dr Whiteford]

rose—

[John Thurso]

rose—

[Kerry McCarthy]

I want to conclude now. I have taken quite a lot of interventions, and hon. Members will have the opportunity to pose as many questions as they like in their own speeches.

Finally, I ask the Economic Secretary to confirm several things. Has the Conservative party dropped the fuel duty stabiliser policy in the light of the OBR’s fairly clear and damning verdict on its practicability? Is the policy now restricted to the rural derogation, and what time scale does she think would be appropriate for its introduction? It will take some time to get it through the EU, and considerably longer to roll it out to the UK as a whole. In the meantime, is she actively considering the impact of the VAT increase on fuel prices? That is hitting people now, and not an issue for the future.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. This has proved to be a popular debate, and nine Members have indicated that they wish to participate in the short space of time that we have left. To be as fair as we possibly can, and to try to get everybody in, we are going to introduce a seven-minute time limit, with the usual injury time for two interventions.

17:57

[David Morris (Morecambe and Lunesdale) (Con)]

I will keep it short, Mr Deputy Speaker.

We all know why we are having this debate today—the extortionate increases in fuel duty brought in mainly by the last Government, which were made worse by three increases introduced in the last Labour Budget that the new Government have to implement or find revenue from elsewhere.

My argument has always been that our top priority must be to cut the deficit, which my right hon. Friend the Chancellor is doing. We have a national and moral duty to do so. After that, we need to start considering ways to cut the burden of tax and get our country moving again—excuse the pun. When that process begins, fuel duty should be our top priority.

On Friday I was called by a haulier in my constituency, Mick Gorry, who claims that despite turning over £4.5 million from his 41 trucks in Morecambe, he made just £19,000 profit in the last financial year. To unpick that, we need to understand that of that £4.5 million turnover, £2.2 million was spent on fuel. As prices rise, it is easy to see how that small profit could disappear.

This is an Opposition day debate, but let us not delude ourselves: this problem was created by the last Labour Government, and we must work out how to clear it up. Mr Gorry is convinced that the solution to the essential user rebate is a fuel stabiliser. He makes the point, rightly in my view, that haulage costs are pushed up by prices in the shops, which in turn causes the risk of inflation, which we must avoid in an economic downturn. But let us not be unrealistic. As I said at the outset, our top priority is to cut the deficit. Thirteen years were spent telling everyone that we could pay for everything—we must never fall into that trap again. As a coalition supporter, I can look my constituents in the eye and tell them honestly that we do not have a bottomless pit of money, but that we can and will cut tax when the public finances are in a better position.

It benefits no one to have a bankrupt United Kingdom—everyone agrees about that. If we had continued down the old path, we would be in that position. My constituency looks to the House and the Government to show leadership on the matter. We showed ourselves at our best by being honest about the challenges and trying to find solutions. Without the reckless spending of the past, Mr Gorry would not be spending £2.2 million on fuel every year.

I support our Chancellor wholeheartedly. I support a proposed fuel stabiliser and any forthcoming rebates. I have yet to hear any detail from the Opposition about how they would try to get us out of the mess into which they got us.

18:00

[Paul Murphy (Torfaen) (Lab)]

I welcome the debate, and the hon. Member for Dundee East (Stewart Hosie) made a powerful speech. It is relevant that it arises on a Supply day motion from the Scottish National party and Plaid Cymru, because the issue is also of particular concern to Northern Ireland, and the hon. Member for Belfast East (Naomi Long) is in her place. All devolved Administrations have a voice to raise and a point to make about the fuel increases in their countries. Hon. Members will know that a joint ministerial Committee meeting took place last week in London, when the First Ministers of Wales, Scotland and Northern Ireland jointly asked the Government to ensure that there would be no increase in fuel prices in the Budget in April. I hope that that will be the case.

I share the concerns of my hon. Friend the Member for Bristol East (Kerry McCarthy) about some of the detail of the derogation for rural areas. I support the idea of a pilot, but it should include at least one part of Wales, and to confine it to islands would make such a study rather artificial. I appreciate that there are particular problems in rural parts of the United Kingdom and it is important to consider that, but confining the pilot to islands would be a mistake.

[Naomi Long]

Does the right hon. Gentleman agree that, if there were a pilot, it would be helpful if a part of Northern Ireland were included in it, given that there are specific problems due to the geographical separation between Northern Ireland and the rest of the United Kingdom?

[Paul Murphy]

Indeed. When I was Secretary of State for Northern Ireland, the point was always made to me that it is the only part of the United Kingdom that has a border with another country—the Republic of Ireland— and the problems of fuel prices in Northern Ireland are particularly acute. It would be a good idea to have a pilot there, too.

The Economic Secretary spent much of her time telling us that it was all the Labour Government’s fault, and then she said that she wanted to be conciliatory. If I may say so, she is slightly schizophrenic about what she wants. Let me emphasise to her that, for the 24 years that I have been in the House of Commons, whether in opposition or in government, the Treasury has always won its case. It has won it on the basis that it wanted the money from fuel—a Conservative Government as much as a Labour Government argued for fuel regulators. There is no point in trying to say that one side or the other is responsible because all Governments in the past three decades have done precisely that.

There is a difference now—and we will differ fundamentally about the reasons for it. Given that we are post banking crisis and have to deal with the deficit, of course the world has changed and we must therefore consider imaginatively ways in which to deal with the fuel prices that our businesses and our families have to pay. However, the Economic Secretary must recognise the point that my hon. Friend the Member for Bristol East made: the single, most devastating reason for fuel price rises in the past few months is the increase in VAT. It is as simple as that. Petrol and diesel are more expensive because VAT has gone up. As all Opposition parties have argued, we should rethink the VAT increase.

The effect of the fuel prices on small businesses in Wales is calamitous. The difference in Wales, as in Scotland, Northern Ireland and parts of England, is that so much of our economy is now based on the success of small and medium-sized businesses. If they are to suffer—it has been shown that they will if fuel prices increase—special attention should be paid to them. The Federation of Small Businesses in Wales has already said that it is disappointed with the Government’s treatment of fuel prices. The Economic Secretary is right to say that devolved Administrations have a part to play in that the Government and the devolved Administrations should work closely with small businesses to see how they can tackle the matter.

Small businesses also deal with other pressures. In south Wales, the Severn bridge is undoubtedly a problem for them. Someone who has a large vehicle such as a lorry and crosses from England to Wales has to pay £17 each time. That is a big disincentive to small businesses in Wales. Earlier, the Prime Minister rightly pointed out that he, like me and every hon. Member, wants banks in our countries to lend more regularly, more frequently and more effectively to small businesses.

The debate is important—so important that hon. Members from all parts of the United Kingdom are taking part in it to ensure that the Government’s mind is bent to trying to find a solution. I fear that the Economic Secretary was right when she said that the fuel stabiliser was a problem—doubtless the Government are looking at it—but there are serious issues, which could have a knock-on effect unless they are tackled effectively and carefully.

In the past couple of days, I went to my local Sainsbury’s petrol station to fill up. Like many supermarkets, it offers diesel and petrol at much cheaper rates than smaller, independent petrol stations. I paid just over £1.30 a litre for diesel. Compared with some of the prices, which we have heard today, in parts of rural Scotland and Wales, the price in my part of the world, although quite high, is lower.

It particularly struck me, when considering the reasons for taking part in the debate, that Shell was making £1.6 million an hour in profits. I know that that is not all on fuel. However it strikes me as incongruous that, when the citizens and businesses of our country have to face huge, inflationary rises because of increases in fuel duty, large oil companies are making those enormous profits. Perhaps the Government can consider that. They were supposed to look at how the banks share out their profits and pay their bonuses. They have not done well on that. Perhaps they should look at some oil companies, too.

Whatever the Government do, they should understand that there is real and justified concern from all Members about the fuel increases. I hope that they will listen.

18:07

[Mr Alan Reid (Argyll and Bute) (LD)]

Representing a sparsely populated rural constituency, I am only too aware of the severe impact of the high fuel price on motorists and local businesses. It is important to remember that, in remote areas, a car is an essential, not a luxury.

Let us consider the purpose of high fuel duty. Two arguments are often advanced: the green argument and the tax-raising argument. The green argument does not stack up in rural areas, because it is based on encouraging people out of their cars and on to public transport. That fails completely in the highland and islands of Scotland, where buses are few and far between. Indeed, there would be no point in rural councils in remote areas subsidising buses that run with only one or two passengers to try to reduce carbon emissions. Clearly, one or two people taking a car will cause far fewer carbon emissions than one or two people on a bus.

I represent many of the islands of the Inner Hebrides, and the price of fuel is far higher there than on the mainland. On the larger islands, such as Mull and Islay, the price of a litre of fuel is typically 15p higher than in a city. On the smaller islands, such as Coll and Colonsay, the price is often about 30p a litre higher. I was therefore delighted when the Government announced their intention to pursue a pilot scheme under which there would be a 5p fuel duty discount on many islands, including the Inner Hebrides. I realise that they must get EU permission to go ahead with that scheme, but since other EU countries operate a similar scheme for islands, I see no reason why permission will not be granted. It takes time to take such projects through the EU, and it is important that the Government get their proposals right, but I plead with them to take their proposals through as quickly as is humanly possible.

[Mr MacNeil]

When does the hon. Gentleman hope to see the rural fuel derogation in action on the Inner Hebrides?

[Mr Reid]

I hope that the scheme will be implemented as soon as possible, and that it can be extended to remote parts of the mainland once the pilot schemes are proven to be successful, as I am sure they will be.

Any argument that fuel duty must increase yet further in order to deter car use is complete nonsense. The high price of fuel already deters car use, and simply increasing the duty further will have no effect on the environment. As other hon. Members have said, increasing the duty will simply harm the rural economy.

I recognise that fuel duty brings in a lot of money for the Treasury, and that the Budget must be balanced. We face an enormous budget deficit, which was inherited from the previous Government, but I put it to the Chancellor that yet another fuel duty increase in the coming Budget will harm the economy, particularly in rural areas, and I urge him to find another way of raising that money. Fuel duty discriminates against rural areas in a way that no other tax does. Almost any other tax increase to replace an increase in fuel duty would therefore be an improvement.

We have debated the stabiliser previously, particularly during proceedings on the Finance Act 2009, when the hon. Member for Dundee East (Stewart Hosie) proposed one. The crucial decision is on the amount around which the price should be stabilised. The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), who was a Liberal Democrat Treasury spokesman at the time, pointed out that the proposal from the hon. Member for Dundee East would mean that the fuel duty would have been 4.5p higher if it had been introduced in the 2008 Budget. I am disappointed that in the intervening two years, the hon. Gentleman has not come forward with a detailed, workable proposal.

[Katy Clark]

I recall the debate and vote on that proposal. Parts of my constituency are similar to the hon. Gentleman’s constituency. Does he agree that the technical and practical problems of introducing a nationwide derogation would need to be looked at very seriously? When those on the Treasury Bench consider the detail, they might find that a nationwide scheme is impossible. Does he therefore agree that we need to consider introducing a scheme in specific communities in specific parts of the country, like the pilot scheme?

[Mr Reid]

Yes, I agree with the hon. Lady. I hope that a stabiliser formula for the whole country can be found and made to work, but I remain sceptical. It is important that the Government consider that idea, but it is also important that no idea is put into practice without careful consideration of all possible negative effects. Any rigid formula could have such unforeseen effects, such as the 4.5p increase that would have resulted in 2009. I am convinced that a rural fuel derogation could be made to work in a specific area. I have no argument whatever against a stabiliser pilot scheme, but I remain sceptical. It would be great if a stabiliser could be made to work—the Government ought to consider it—but we must be very careful. The way forward is definitely a rural fuel discount.

The Budget is only a few weeks away. It is important that the Chancellor exercises restraint and that he does not increase fuel duty in the Budget, when the fuel price is already so high. However, rather than having a rigid stabiliser formula, which could have unforeseen side effects, it is important that he acts sensibly.

Under the previous Labour Government’s policy in their last Budget—the fuel escalator—the tax on fuel would increase by more than 4p a litre in April. I hope that the Government do not follow Labour’s policy. That would be grim news for a rural economy that is already struggling under the burden of a high fuel price. I urge the Chancellor to heed the warnings he has received on the impact that another 4p per litre increase would have, and I plead with him to cancel the proposed fuel duty increase in the Budget.

18:15

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I have listened with great interest to this afternoon’s debate. I intend to limit my remarks to aspects of it that relate most to the area that I represent. That part of rural Aberdeenshire and Banffshire has no railway stations and very limited public transport options—there are far fewer bus services than hon. Members will find in urban areas. This is therefore an urgent issue not just for individuals, but for businesses in remote and rural areas, and I am glad that Members on both sides of the House take it seriously.

It almost goes without saying that people who live in the more remote and rural parts of Scotland, Wales and other parts of the UK have to travel further to access the most basic amenities, whether post offices, shops, schools, places of work or doctors’ surgeries. Inevitably, they incur extra costs in doing so, yet as other hon. Members have pointed out, people in rural and remote areas pay higher prices. In parts of my constituency, they pay £1.36 per litre for fuel. That might not be quite as high a price as is paid in some of the island communities, but it is nevertheless well above the average.

[Albert Owen (Ynys Môn) (Lab)]

The hon. Lady is quite right to point out that those in peripheral or rural areas pay more because their need for the car is greater. In addition, those people need larger cars, and there is a big difference between the costs of petrol and diesel—many diesel vehicle owners are hit harder. We are talking not about Chelsea tractors, but essential means of transport in rural areas.

[Dr Whiteford]

I agree with the hon. Gentleman. I live in rural Aberdeenshire, and at this time of year, I fully appreciate the need for vehicles that are suitable for the roads on which they travel and the driving conditions.

There is a huge irony in this situation for people in my constituency, who have had an oil terminal on their doorstep for many years. People who live at the heart of Europe’s oil and gas industry pay among the highest prices for petrol and diesel in Europe. That irony is certainly not wasted on folk in my part of the world. Nearly 62% of what we pay at the pumps goes directly in tax and duty to the Treasury. My concern—this is the chief point that I want to make this evening—is that that is a disproportionate tax on people who live and work in rural and remote areas.

[Jim McGovern (Dundee West) (Lab)]

May I say that I am sorry, Madam Deputy Speaker, that I was not here at the beginning of the debate? I was in Dundee for the launch of the Scottish Affairs Committee inquiry into the video games industry. The hon. Lady is a member of that Committee, so I am sure she will understand.

Does the hon. Lady agree that while figures suggest that fuel duty puts 1p on the price of a litre of petrol or fuel, VAT puts somewhere in the region of 3p a litre on it? Should we not attack the coalition Government for increasing VAT instead of looking for fuel duty regulators? I see that she is being advised by her colleagues on that.

[Dr Whiteford]

Had the hon. Gentleman been here earlier, he would have heard that point addressed in previous contributions. Both VAT and duty have a part to play. The previous Government’s record on this was shameful in not allowing motorists to benefit from the falls in VAT at the beginning of the recession. The key point is that the disproportionate tax on rural parts of these islands does not only harm individual motorists, but inhibits our business growth and the development of our rural economies.

[Katy Clark]

I support what the hon. Lady says about islands and remote communities, and I support a fuel duty discount for such areas. However, the bigger picture is how much we tax fuel in this country, and Britain has decided to have a high level of tax on petrol, diesel and other fuels. Does she support that?

[Dr Whiteford]

We have heard a lot this afternoon about the need for the Treasury to balance its books, and about the role of tax in that, but the fundamental underlying question is: why should people have to pay more and disproportionate tax just because they do not have access to public transport or happen to live in a rural area? I am all for tax, so long as it is fair, proportionately applied, and people are not discriminated against for living and working in a rural area.

The impact is felt particularly by businesses. As other Members have said, goods and services have to be moved into and out of parts of rural Scotland by road, and in many areas we already have to overcome significant challenges arising from our distance from markets. The area I represent has strong food processing, farming and fishing sectors and a great deal of manufacturing. Companies in northern Scotland have to cover the extra costs they incur and the extra taxes they pay, in order to make viable business plans, but nobody else has to. We have come through difficult times but are still struggling to emerge from the recession, and the fluctuating price of oil causes great instability and uncertainty for business. Big and small businesses alike struggle with that. Big businesses can sometimes buy fuel while in greater debt, but small businesses, which are often the greater engine of growth in our communities, really struggle with the unpredictability caused by fluctuating prices.

In conclusion, I urge the Government to honour their commitments before the election. I cannot over-emphasise the urgency and immediacy of this issue in rural Scotland. I urge them to consider the matter seriously. We have heard a lot about the derogation. I hope that not just island communities will be included in that, but that, notwithstanding the difficulties, other rural and remote parts will be included too. I also hope that much more attention will be given to the stabiliser, which, ultimately, will create fairness in the system and proportionality in the taxation on fuel.

18:23

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

This has been an interesting debate for a number of reasons. However, I begin by apologising to the hon. Member for Dundee East (Stewart Hosie) for missing the opening part of his remarks in introducing the debate.

The issue of fuel costs touches not only those living in regions that the devolved Administrations are largely responsible for governing, but many rural constituencies across the country, and certainly my constituents and members of the public across Lincolnshire. The reason is that it costs—and has done for a long time—a great deal of money to run a car, given the current fuel prices. However, a car is not a luxury to my constituents and people living not only in Wales, Scotland and Northern Ireland but in rural parts of England. In those places, a car is a necessity. Owing to the state of public transport, people cannot live their lives without at least one car—certainly, they could not do so without great difficulty.

Much of my constituency is made up of rural areas dotted with small villages and farms, which means that I live in a beautiful part of the country. However, it also means that it takes a great deal of time to get to the doctor’s, the supermarket or anywhere else that one needs to get to in order to live one’s ordinary life. Public transport has got worse over the past few years, and will continue to get worse owing to the state of the deficit left by the previous Government and the need for this Government to deal with it. That will not be conducive to better public transport over the next few years, and will exacerbate the problems caused by high fuel prices.

I would like to echo a point made by the Economic Secretary. The Labour Government left us with the worst possible fiscal position. The simple fact is that we are paying debt interest of £120 million a day in circumstances where 1p on fuel raises only £500 million. It does not take a very good mathematician to work out that were we not paying that debt, we would not need the level of fuel duty or VAT that we do—with all that that has meant for the current fuel crisis. I heard no apology in the remarks of the hon. Member for Bristol East (Kerry McCarthy) or explanation of why we have been left with this debt legacy and of what it means, in the context of this debate, for my constituents and others all over rural Britain who are paying the price for the previous Government’s failure, inter alia, through the cost of fuel.

[Guy Opperman (Hexham) (Con)]

Does my hon. and learned Friend think that it was right for the leader of the Labour party to indicate that he would not have implemented the previous two fuel rises in the current circumstances?

[Stephen Phillips]

I have not seen the comments made by the right hon. Member for Doncaster North (Edward Miliband). However, he was at the heart of the previous Administration, with all that that meant for the legacy inherited by this Government. Whatever opportunism Labour Members pursued—we saw it last week during the forestry debate from a party that sold off 25,000 acres of forest without any guarantees of rights of public access—we understand that it is the duty of the Opposition to oppose. However, I do not understand many of his policies, and I do not expect that I understand this one any better than any of the others.

We have heard about two mechanisms that might serve to address some of the difficulties associated with current high fuel prices. The first is the derogation. The Government have done more to take that forward during the few short months they have been in office than the previous Government did during the entire time they were in office. I congratulate my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) and his predecessor who have done so much work on this matter. It is gratifying that we at last have a Government who are beginning to take this issue seriously and to negotiate on it in Europe. I hope that in due course we will see this derogation.

On behalf of my constituents, I would like to hear from the Exchequer Secretary that the pilot, whatever that might be, is rolled out not just in the remote rural areas referred to in the amendment—the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly—but in areas of England affected by high fuel prices.

[Heather Wheeler (South Derbyshire) (Con)]

Could my hon. and learned Friend expand on the rural areas in England suffering with high fuel prices? It would be helpful for the Exchequer Secretary. Certainly in South Derbyshire we are seeing prices as high as £1.36 a litre. We are suffering too, and if that could be borne in mind when he sums up, it would be superb.

[Stephen Phillips]

I am sure that my hon. Friend the Minister will take into account the views from Derbyshire. I do not want to take up too much time dealing with that, however, because there are a number of other people who want to contribute to the debate.

What I want to hear from the Government Front Bench is that the pilot will be rolled out not just in island communities in Scotland or elsewhere, but in England. There are areas, such as the constituency that I represent, where it costs people an enormous amount just to live their ordinary lives, which is effectively a piece of discrimination via the tax system. We deserve the piloting of such a break, in just the same way as those areas of the United Kingdom where the pilot will take place deserve it.

This is not the subject of today’s debate, but a lot of my postbag is taken up with correspondence from constituents expressing concern about the Barnett formula and the way it effectively sends a subsidy—they would say at their expense—to Wales, Scotland and Northern Ireland. That is one of the issues that this Government will have to grapple with, at the same time as explaining to my constituents why the derogation will mean that there may be lower prices in other parts of the United Kingdom.

I have not yet dealt with the other limb to what is proposed—it is something that I understand the Government are looking at, and they must consider it carefully—namely, the fuel duty stabiliser. The fuel duty stabiliser, which we talked about in the election, is designed to smooth out, as the hon. Member for Banff and Buchan (Dr Whiteford) said, the spikes in prices that harm our constituents so much. To those who have read it, it is clear that the Office for Budget Responsibility report indicated that, although difficult, introducing the fuel duty stabiliser would not make that much difference to the revenue going to the Exchequer.

I did not understand the position of the hon. Member for Bristol East on that issue, as on so many other things. I am sure that in due course there will be some intolerant tweets about what I am saying about her across the Chamber, as that is her general way of dealing with me. I did not understand her or her party’s position on the fuel duty stabiliser, because she was unable properly to tell the House what it was, and I certainly did not understand her party’s position on the derogation from Europe. If the Opposition are to oppose in a responsible way, as the Leader of the Opposition has said, it would help if the Government and Members in all parts of the House knew what the Opposition’s position was, because at the moment, on this issue as on so many others, we do not.

Let me say a word about the question before the House. The difficulty with the motion, as the Government’s proposed amendment recognises, is that it does not take into account the concerns of constituencies other than those in the devolved Administrations. The motion is focused, no doubt for perfectly good political and tactical reasons, on those constituencies, not ours. It is for that reason, among many others, that I will not be supporting it, although I will of course support the amendment that my hon. Friend the Economic Secretary moved.

18:33

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

I shall try to be brief to allow my hon. Friend the Member for Angus (Mr Weir) to get in.

Simply put, fuel in my constituency costs a ridiculous amount, at £1.45 a litre. What we want, in essence, is to pay the same tax as elsewhere. We are only looking for fairness. A rural fuel derogation would not achieve fairness, but it would take us to the foothills of fairness and would be a big step in the right direction, reducing the price from £1.45 a litre to £1.40. I have sympathy with those in South Derbyshire; I only wish I was enjoying the prices that they are currently burdened with. We have to remember that, at the back of this debate, we want to look at fuel distribution throughout the country, which is often a difficulty to do with refineries—part of the excuse that some of the companies use as well.

Remoteness is often blamed, but I discovered recently that while we pay £1.44 a litre, those in the Faroe islands pay 94p a litre for diesel and £1.10 for petrol. For those who do not know, the Faroe islands are halfway between the Hebrides and Iceland, where petrol and diesel are £1.10 a litre. We do not need to go too far back to remember the difficult economic situation that Iceland faced. It has a big debt, although its deficit is not in the same situation as the UK’s, but it clearly understands that high fuel costs choke recovery. Iceland is not making that mistake; indeed, in the last quarter, Icelandic GDP grew far more than the UK’s. The Government here can talk of the deficit, but if they carry on like this, they will choke the recovery and will not see revenues flowing into their coffers, as they should and would like to.

The price is painful for us. As I left Benbecula this morning, the fuel concerns of Mr Alec MacIntosh, who works at Benbecula airport, were ringing in my ear, and small wonder, as he had just bought some fuel at £1.46 a litre. I think that his week’s wages had just about gone in filling up his vehicle. Those at Stornoway airport attacked my other eardrum on the issue. There is scarcely a place I can go without people seeing me as a telegraph to relay to the Treasury the pain that people are feeling. That pain is real, and I hope that that is taken on board. Indeed, it is not just pain; it is anger, because people know that more tax is flooding from my constituency to London than from just about any other constituency. We have the highest fuel poverty in the UK, and small wonder. The islands really need a rural fuel derogation, and they need it quickly. The hon. Member for North Ayrshire and Arran (Katy Clark) spoke earlier, and I have sympathy with those on Arran, too. Indeed, I saw the MSP for Arran, Kenny Gibson, on the television vociferously calling for a rural fuel derogation.

The high cost has an impact on a whole raft of other budgets. Local councils are haemorrhaging cash because they can run their vehicles only by paying higher fuel costs—again, the money goes directly to the Treasury—as are our health boards, and our police, fire, coastguard and ambulance services. They are all having to deal with budgetary cuts every time they fill up their vehicles, because of the cost of fuel. Businesses are losing too, and less money is circulating locally. Indeed, so vexed was one constituent of mine—Erica MacDonald—that she started a petition a few months ago and came to the Treasury. She is now wondering whether the EU’s rural development policy—€96 billion over a number of years—can be used. I do not think that it can, but such is the level of research being done by individual voters in rural and island Scotland, who are looking for solutions and hoping that the Treasury will listen to some of them.

Talking of solutions, we certainly listened to the Labour party earlier. We heard a repetition of what I would call the Pontius Pilate approach. The Labour party seemingly has no view on a rural fuel derogation or a fuel duty stabiliser, and no other plans or suggestions. Indeed, if those on the Labour Front Bench have a concrete plan or suggestion, I would ask them to tell us what it is. We definitely heard no apology for the years we spent in this place listening to the previous Government’s excuses for doing absolutely nothing, leaving places such as the Outer Hebrides with shockingly high fuel costs.

[Stewart Hosie]

My hon. Friend talks about the dearth of opinion on the Labour Front Bench. Might that be a consequence of the Labour leader saying recently that Labour found it difficult to implement a fuel duty regulator when in power, when in fact Labour voted against every single attempt to introduce one?

[Mr MacNeil]

Absolutely. Labour was against a fuel duty regulator, a rural fuel derogation and anything else that would have helped people in the Hebrides.

[Mr Reid]

What the hon. Gentleman is saying about the previous Labour Government is perfectly correct, but does he not have it within himself to congratulate the coalition Government? He knows that, time after time, I, along with my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) and other Liberal Democrats, put forward proposals in debates on Finance Bills for rural fuel derogations, and the Labour party rejected them. This Government are going to implement that. Will he not have the decency to recognise that and congratulate the Government?

[Mr MacNeil]

I certainly do have the decency to recognise that. I am very pleased that that announcement was made in the autumn. In fact, I think I text messaged the Chief Secretary to the Treasury to say how delighted I was. My only fear is that Liberal Members have lost the fierce urgency that they used to have in opposition, and are not really looking for a date on which we will see a rural fuel derogation. By Christmas we had heard that nothing formal had happened—that was one of the lines that came out. We want things to happen, and we genuinely need them to happen. The coalition agreement mentioned the rural fuel derogation. It did not mention the VAT rise, but hey, that was put in place quite quickly—by new year—yet we have not seen the rural fuel derogation.

The European Commission has been blamed, so I wrote to the Commission asking for the timetable, to see whether things are indeed being held back. However, the European Commission being the European Commission, it probably does not feel very accountable to democratically elected citizens in the member states of the EU. That is a matter for the European Commission. I hope that it is listening and will respond quickly, because we need action now. I need to know from the Government whether the formal stage has started. Just when will we see a rural fuel derogation? How long has it taken to get a rural fuel derogation in other countries? Those are the questions that I am being asked when I go back to the Hebrides, and I need answers from the Treasury now.

The rural fuel derogation is not at all like Christmas, because Christmas has come and gone, but where is the rural fuel derogation? I acknowledge that progress has been made, and I am pleased to see that. There are good intentions behind it, but thus far, it has been as effective only as the progress made by Labour. I hope that, in a year’s time, the situation will be very different. I hope that we will not have to debate the issue again in a year’s time, but I fear that we will. The Labour Government were famous for the ridiculous, obstinate answers that they gave us over the years—they were against giving any help at all to the islands—and my worry is that the Liberals have really lost the urgency of now. They should remember that there are elections in May, and that if there has been no action by then, the voting will hurt them.

18:40

[George Freeman (Mid Norfolk) (Con)]

I am grateful for this opportunity to speak in the debate, and I congratulate the hon. Member for Dundee East (Stewart Hosie) and his colleagues on raising this matter. I, for one, could listen to their wonderful brogue all afternoon.

[Stewart Hosie]

May I just say to the hon. Gentleman that I do not have a brogue or an accent? It is he who has the accent.

[George Freeman]

We can debate that another day.

The hon. Gentleman and his colleagues spoke eloquently about the needs of the rural economy, and I know that he will want to send his best wishes to one of the most exciting businesses in Norfolk, the English Whisky Co., which is doing great trade. As in so many debates, most of the suggestions that he and his colleagues made would lead to an increase in expenditure by the Exchequer, and, representing an English constituency, I find myself thinking, “English tax for Scottish voters.” His points on the rural economy were good ones, however, and I want to touch on the impact of fuel prices on that economy and offer some thoughts on how the Government might like to tackle the issue.

Fuel costs hit rural areas particularly hard, not only in Scotland but in England and Wales. In my constituency, where I am lucky enough to have four towns, 110 villages and a 130 mile boundary, the rurality is extreme. Fuel currently costs 130p a litre, which means that the average family are paying £70-odd to fill up their car. That is not a matter to be taken lightly. Families are hit particularly hard, especially those on low incomes who, it has been pointed out, tend to drive older, less efficient cars. Another group that is hit hard by high fuel costs is one by which the coalition has set so much store—namely, the people who are working hard to get out of welfare and into work. Small businesses are also affected, especially those in remote rural areas. They are crucial to the revitalisation of the rural economy.

The public sector is also affected by fuel costs. Many rural councils are hit very hard by their dependence on fuel, and this is another area in which rural councils in England have received particularly unfair treatment. Farmers are also hard hit, especially those growing commodity crops such as sugar beet and potatoes that require long-distance haulage. Hauliers are affected too, especially smaller, self-employed hauliers, who tell me that they are hit by the unfairness of the lack of a level playing field on which to compete with their European competitors.

[Rory Stewart (Penrith and The Border) (Con)]

May I make a plea to my hon. Friend to include a mention of dairy and livestock farmers, as they are also hit very hard by fuel prices in Cumbria?

[George Freeman]

My hon. Friend makes an excellent point.

On the wider economy, fuel inflation in rural areas not only affects rural communities but hinders our national economic growth. This goes to the heart of two of the coalition’s laudable objectives: the rebalancing of the economy and promotion of economic growth outside the City of London and our main metropolitan centres; and the attempts to help those sectors of the economy that do more than operate in the service, retail and housing industries—namely, the sectors that make things, transport things and sell things. Those sectors are hit particularly hard and we need to do all that we can to help them.

The reality that those on the Opposition Benches—particularly the Labour Benches—do not want to face is the fact that we have inherited a chronic legacy in our public finances that is costing £120 million a day in interest, which represents £20,000 of debt for every man, woman and child in the country. If we had not tackled the debt crisis, the interest payments would have been heading towards £70 billion a year. I repeat these figures because they need repeating to those on the Labour Benches. It ill behoves a serious party of government to come to the House, as those on the Labour Front Bench did today, and show no recognition of its part in causing this fiscal crisis. Labour Members have made no serious analysis of the rural economy and rural communities—[Interruption.] I wish that they would listen to what I am saying, rather than talking over it. They had no positive suggestions for how we might tackle the problem.

Fuel inflation risks strangling the economic recovery in our most marginal rural communities, but we cannot afford to do what we would like to do to address that. I therefore urge the Government, in accepting the constraints under which they are operating, to look carefully at the options.

[Claire Perry (Devizes) (Con)]

Does my hon. Friend agree that we need a sustainable solution, one that will work in bad times as well as good, rather than a knee-jerk reaction to what is clearly a problem for many rural constituencies, including my own?

[George Freeman]

My hon. Friend makes an excellent point. It is vital that we should not go for some short-term gimmick, and that we make a sustainable, serious commitment to helping rural communities and the rural economy.

My constituents and many in other rural constituencies have been encouraged by the Prime Minister’s continued espousal of the benefits of a fair fuel stabiliser. I defer to Ministers and experts in the Treasury on determining the right mechanism for that. We have a duty to make some gesture towards ameliorating this problem, and my plea to the Ministers and Treasury experts is that, whatever mechanism we go for, we focus on two groups in most urgent need: the rural small businesses on which we rely for economic growth and for the jobs in the rural economy on which we all ultimately depend; and the very lowest-paid employees who are struggling to get on and make something of their lives by earning a living. In my constituency, the average income is £17,500, and such people are hit hardest by this serious problem. I urge Ministers to do all that they can in the forthcoming Budget.

18:47

[Mr Mike Weir (Angus) (SNP)]

There has been a change since the general election. We spent the last Parliament trying to persuade the Labour Government to do something about this problem, and they steadfastly refused to do so. Now, we hear warm words from the new Government, but unfortunately we have yet to see any real action. That is the problem. Those on both Front Benches talked about the practicalities of this or that measure, and how they would have to look into them further, and I could hear the sound of things being thrown furiously at television screens up and down the country by people who are suffering now because of high fuel prices. It will be no good if it takes a year for any action to be taken, because, in that time, many of the businesses that are suffering now will no longer be in operation. That is important to the local economies of the areas concerned.

The Minister and others have talked about the need to pay down the deficit and to encourage growth. That is all true, but the growth in rural areas comes through small and medium-sized enterprises—the very businesses that are suffering most, as a result not only of fuel duty but of higher VAT and all the other factors affecting the economy. High fuel costs are strangling small businesses which have to transport goods into and out of their businesses by road, as there is no alternative. People have talked about transporting goods by rail, but in many areas such as my own, there is no realistic prospect of that happening. I have a rail line in my constituency; it goes up the whole of the east coast. Unfortunately, however, there are no freight depots on it. It is therefore impossible to use it for those purposes, and those businesses have to use the roads.

[Mark Tami (Alyn and Deeside) (Lab)]

The hon. Gentleman is making a powerful case. Does he agree that those same areas are also being hard hit by the rise in domestic oil prices? Are they not facing a double whammy in that regard?

[Mr Weir]

Indeed; I will come to that point later if I have time.

It is not only the businesses but their employees and the other people who live in the rural areas who are suffering in many ways. My constituency comprises small towns and villages, and many people have to travel to get to work. They have to use their cars to do so.

[Guy Opperman]

rose—

[Jim McGovern]

rose—

[Mr Weir]

I will not give way at the moment.

Many of my constituents have to travel to work, and they have no alternative to their car. There are bus services, but if we look at how people work today—many work split shifts and might have one or two jobs to make ends meet—we see that it is very difficult for them to get to their workplaces by bus. This places a great deal of pressure on family budgets. If we are talking about creating work and getting people back into it, we must make it easier for people to travel.

[Jim McGovern]

Will the hon. Gentleman give way on that point?

[Mr Weir]

I want to finish the point; I will give way to the hon. Gentleman in a moment.

As I mentioned in an intervention, The Guardian this morning features an article saying that bus routes are about to be slashed, and I understand that the rural bus rebate given to local authorities is also going to go. All that will cut back even further people’s ability to get to work by bus. I will now give way to the hon. Member for Dundee West (Jim McGovern) before he jumps up again.

[Jim McGovern]

I thank the hon. Gentleman for giving way. I must say first that I was disappointed that the hon. Member for Banff and Buchan (Dr Whiteford) criticised me for repeating a point and for not having been here earlier. I did explain why I was not here, but my main point is for the hon. Member for Angus (Mr Weir). I am sure he is aware that Stagecoach, a company owned by Brian Souter and one of the biggest donors to the Scottish National party, has said that the fuel price increases will help its business.

[Mr Weir]

The hon. Gentleman is bringing irrelevancies into this; we are talking about the real problems that rural areas face, and I am sorry that he does not understand that.

There is another problem with cars. The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) made the point that many people in rural areas have old vehicles and cannot afford to buy new ones. That brings several problems. Those vehicles are not only less reliable, but use more petrol than modern vehicles do and cost more to maintain and more to run in road tax and other things. People are suffering seriously by having to travel to work by car.

The right hon. Member for Torfaen (Paul Murphy) talked about what the devolved Administrations could do. The devolved Scottish Administration have introduced a business bonus to help with the costs of running small businesses. The right hon. Gentleman mentioned the ending of the Severn bridge toll. There is a huge cost in fuel for transportation, which is really hitting small businesses.

The hon. Member for Argyll and Bute (Mr Reid) mentioned the green argument, and I would like to address some of the related issues. Strangely enough, I agreed with a lot of what he had to say—I shall surely not make a habit of it!—but it seems to me that there is nothing green about strangling local economies in rural areas. Some say that people can move on to drive electric cars. I would like to see an electric car that would take me around my Angus constituency, never mind Argyll or Caithness and Sutherland, but the range is simply not available.

[Jim McGovern]

Does the hon. Gentleman have time to give way again?

[Mr Weir]

No, I do not.

There are real problems with fuel prices and they are strangling business in rural areas. They are an attack not only on the business itself, but on the family budget.

The hon. Member for Alyn and Deeside (Mark Tami), who is no longer in his place, mentioned home fuel oil. I appreciate that it is taxed differently from petrol, so it is a different issue, but he is quite correct to say that throughout rural Scotland, the escalating price of home fuel oil—used in many hard-to-treat homes that are otherwise unable to get central heating or any heating at all—is a huge problem, which is also hitting many people. These costs are devastating the rural economy.

The right hon. Member for Torfaen also mentioned supermarkets giving discounts on petrol, but in some ways that is a somewhat insidious practice. The Minister talked about people going to petrol stations, but in many rural areas such stations have ceased to exist. One of the hidden costs of living in rural areas is that people often have to travel many miles to fill up their vehicles with petrol in the first place. Cars cannot be driven right until the orange light comes on; if they are, they are unlikely to get to a petrol station for a fill-up and will be stranded somewhere along the line. If supermarkets offer discounts, people travel long distances to get there to fill up their cars, which has a knock-on effect on business in rural areas.

The key point is that the fuel issue is at the centre of the rural economy. Unless we sort this problem out, there will be no rural economy. We will not see a recovery of businesses that are strangled by rising fuel prices. Businesses will not survive for much longer if the price continues to rise as it has recently.

I think it was the hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) who talked about the Barnett formula. Frankly, that is completely irrelevant to this argument. If we had a fuel duty stabiliser, it would apply throughout the country. [Interruption.] The hon. and learned Gentleman is thinking about the derogation, which is a completely different matter: we are talking about two different systems here.

We have pushed for a fuel duty stabiliser to give certainty about the price, to allow hauliers, for example, to be able to quote in advance for a contract and know what the fuel prices are going to be. This will also allow people to look at their family budgets and know what they have to spend to get to work on a weekly or monthly basis. We need to remember that our constituents are not getting pay rises—in some cases, they are getting pay cuts—so they cannot cope with these rising prices, which impact directly on family budgets. For all those reasons, we need action now. It is all very well to talk about the problem and to look at the practicalities, but if this drags on into next year, I am afraid that many businesses will fail to survive.

18:56

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

There are two issues in the debate, which I would like to try to disaggregate. One is the high premium paid in rural areas and the specific circumstances that apply to it. The other is the general high cost of fuel in the country. Let me deal with the two separately.

Briefly, the derogation for rural areas exists because there is a premium to be paid in those areas. Many Members have provided the arguments, so I will not go over them all again. However, I would point out that it exists not simply because there is a premium. I have researched the issue over many years, so I can tell hon. Members that I have often found that a certain petrol station in Sloane avenue is in the top three or four for prices. That shows that it is not simply a matter of high prices; the problem is that there is high price, a premium and a lack of public transport, coupled with the other deprivation typically seen in the more remote rural areas. It is not high prices alone, but the combination of all those factors that counts.

Secondly, as a number of hon. Members mentioned, I wrote a paper on this subject and it dealt with all the elements that cause worry—imperfectly, I am sure, but the hon. Member for Wallasey (Ms Eagle), who was the Exchequer Secretary at the time, took it seriously and her officials looked at it, so it was reasonable enough. I would like to think that the imperfections contained in that scheme are currently being ironed out and that we will shortly know what the Government intend to put forward.

I want to deal more fully with the other question of the generally high price of fuel. I commend to anyone who has not yet had a chance to read it the note produced for this debate by the Library. Among other things, it contains some very interesting facts. For example, it points out that for a number of years, the cost of motoring has actually gone down in this country in real terms, whereas the cost of public transport has by comparison gone up. One of my successors as Liberal Democrat transport spokesman often used to point that out.

It is also interesting to look at the percentage of tax take. The total has varied from a high of about 89% at one point in the ’90s down to the high mid-50s and now back up to 63%. The tax take in real terms today is about equivalent to that of 1997-98. We need to get our facts right and look at the issue in perspective.

We need to take account of some of the external factors. They must include the fluctuation in the oil price, which has once more hit $100 a barrel. A number of economists believe that that is merely a resumption of the upward trend that existed before the recession. It is entirely possible that the price will rise further, in which event we shall have to deal with the consequences of a high fuel price for our economy.

I congratulate the Government on giving thought to the introduction of a fuel stabiliser, although I have some doubts about the practicalities. There is only one thing worse than a stabiliser that works, and that is a stabiliser that does not work, so if we are to have one, let us ensure that it works. However, we might consider how the Government could, as it were, be removed from the equation. There are a number of possibilities, and I should like my hon. Friend the Minister to investigate them.

The first possibility involves VAT. When the last Government reduced it to 15% they also increased duty by 2p, and that remained when VAT rose again. Thus a relationship was established between VAT and duty. I suggest that the reverse should apply: that VAT on fuel should be 5%, in line with VAT on heating fuel, and that the duty should be altered to an amount that the Government considered appropriate. That would remove the variability that comes from the market. It would not affect the Treasury, and it would not have some of the deficiencies of the stabiliser. It is an imperfect mechanism, but it would be of some small comfort to know that when the price at the pump rose, it would be largely a result of what the oil companies were doing rather than what the Government were doing.

[Albert Owen]

I agree with the principle of a stabiliser. However, the Government talk of having “inherited” the duty increase. In 1997, the Labour Government inherited a Conservative proposal to raise VAT on domestic fuel and then “disinherited” it. Is the hon. Gentleman suggesting, as I am, that the Conservatives should “disinherit” the duty increase? That would help people in his area and in mine.

[John Thurso]

I am, in fact, presenting the Minister with a novel suggestion which I hope he will consider in the Treasury, and which might benefit us all.

Let me make another point about the current regime. I happened to note that if the escalator were introduced, it would be based on the retail prices index. Perhaps the Minister would consider basing it on the consumer prices index, which would be in line with the rest of Government thinking.

Finally, let me express a view on an issue that I studied in some detail when I was my party’s transport spokesman. I believe that the whole way in which we tax fuel is wrong. In my opinion we should not tax it at all, but should adopt a proper method of variable road user charging. Through that mechanism, we could both raise the amount of money that we wish to raise and incorporate all the fairness that we seek. It would require those who are most able to find alternatives, and who use the most congested roads, to pay the most, while allowing those with the most need—most of whom live in the least congested areas—to pay the least, and it has been suggested by most academics in the field of transport.

I have a funny feeling, Madam Deputy Speaker, that when I first raised the issue of road user charging in a Westminster Hall debate in 2001, it was you who responded from the Dispatch Box. I hope that the Government will seriously consider introducing such a system, because it would enable us to escape from the groundhog day of the fuel duty debate which comes round at least once a year, and adopt a sensible method of charging for road use that would be both green and economically efficient.

19:04

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Diolch, Madam Deputy Speaker. I am delighted to have the opportunity to close the debate on behalf of the Plaid Cymru and SNP group. Our combined parties have campaigned on this issue for a number of years, not least in tabling amendments to Finance Bills in 2005 and 2008. It is somewhat disappointing that, in our first Opposition day debate of the Session, we must once again highlight the need for Government intervention to stabilise fuel prices.

Fuel prices are driven by the global price of oil and by domestic taxation. In the case of global oil prices, the trajectory is likely to go in only one direction, as oil is a finite resource. It is already being traded at over $100 a barrel. As the world economy recovers, the price will rise further as a result of increasing demand, especially from the emerging countries and, in particular, China. Volatility will only be exacerbated as we reach peak oil. Oil prices will also inevitably increase as a result of the long-term deflationary policies of the United States Government. Oil is traded in dollars, and a weakening dollar pushes up oil prices as producer countries try to make up for the shortfall of a currency whose value lessens. I echo the call of the French President, Mr Sarkozy, for a long-term agreement between oil-producing and consumer countries to offer more stability on prices.

Fuel prices are obviously influenced by domestic taxation, and it is with that element that we are concerned today. Duty on fuel in the UK represents about 65% of the price of fuel at the pump, if my sums are correct. Clearly, the higher the price of wholesale oil, the higher the tax receipts raked in by the Treasury. As is shown by an excellent House of Commons Library research paper, petrol duty in the UK is the second highest in the European Union, and the duty on diesel is by far the highest. While most other countries impose different levels of duty on road petrol and diesel, the UK’s rates are exactly the same, which means that the UK’s diesel prices are far higher than those of our European partners.

There are three general reasons for the need for a mechanism to stabilise fuel prices via control of duty. First, the volatility of fuel prices has far-reaching social and economic consequences, and we therefore need a mechanism to dampen the peaks and troughs. Secondly—as we have heard in a number of notable speeches today—surges in prices have a disproportionate effect on some sectors of the economy, some sections of society, and some geographical parts of the state. Thirdly, green taxes must be linked to clear environmental criteria, because otherwise the public will believe they are just another cash cow and there will be a loss of support for environmental taxation. That would be a disaster, in view of the challenges that we face as a nation and, of course, throughout the world.

Let me stress that we are not arguing for the introduction of something new and untested. Many OECD countries have mechanisms to regulate the price of fuel. France has a fuel regulator, and Canada even has a regional fuel stabiliser. If we were to adopt a similar system in the United Kingdom, I should like to advance a special case for south-west Wales.

In adopting our policy following the Finance Act 2008, the Conservative party’s 2010 general election manifesto stated:

“We will consult on the introduction of a ‘Fair Fuel Stabiliser’. This would cut fuel duty when oil prices rise, and vice versa. It would ensure families and businesses and the whole British economy are less exposed to volatile oil markets, and that there is a more stable environment for low carbon investment.”

I could not agree more, and I look forward to the support of hon. Members who stood for election on the basis of that manifesto commitment when the House divides later this evening.

We have had a very interesting debate, featuring many positive and informative contributions. The hon. Member for Dundee East (Stewart Hosie), in his usual ultra-detailed opening remarks, made a comprehensive case for the need for a stabilising mechanism. I urge those who missed the beginning of the debate to read his speech, and I hope one day to be able to rival his knowledge of these matters. He made the specific point that rising fuel costs constituted a significant economic headwind. Given the recent deliberations about the Government’s lack of a growth strategy, I humbly suggest that that is one idea that they should fully embrace.

The Minister defended the Government’s position admirably by blaming the previous Administration, but while we welcomed her comments about the rural derogation pilot and look forward to further progress, her suggestion that the devolved Governments could intervene to reduce the burden on families was somewhat weak. Much as I should like the Welsh Parliament to have the taxation powers that would enable it to intervene, this is a matter for the United Kingdom Government. They need to take the necessary responsibility and introduce proposals of their own, rather than blaming the previous Administration and placing the onus on the devolved Governments without giving them any power. That seems to have developed into a growing theme in recent months.

The hon. Member for Bristol East (Kerry McCarthy) confirmed that the Labour party opposes any stabilising mechanism. I am sure that colleagues who will fight Welsh Assembly elections and Scottish parliamentary elections in a few months’ time will remind electors of Labour’s policy.

The hon. Member for Morecambe and Lunesdale (David Morris) noted the problems that small companies—notably the haulage industry—face in his constituency.

As usual, the right hon. Member for Torfaen (Paul Murphy) spoke with great authority. He concentrated on the importance of small and medium-sized enterprises to the Welsh economy. I echo his views and look forward to his support in the Lobby later.

The hon. Member for Argyll and Bute (Mr Reid) highlighted the specific problems faced by communities in the Scottish islands, and I thank him for his contribution.

My hon. Friend the Member for Banff and Buchan (Dr Whiteford) made a strong case for the food processing industry in her constituency. She discussed the added burden that that industry faces as a result of spikes in the price of oil.

The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) made a staunch defence of the Government’s position. We would welcome a derogation pilot in England, as he suggested, because if it worked in remote parts of England it would work in Wales and mainland Scotland, too.

[Albert Owen]

The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) is not in his seat, but he said that only areas with devolved Administrations have been proposed for the pilot. The Isles of Scilly are, as we all know, in England. Wales has been left out, but surely the Isle of Anglesey would be the ideal place to experiment with such a derogation.

[Jonathan Edwards]

The hon. Gentleman makes a strong point. I am sure that the Assembly Member for his area, who is a member of my party, agrees with his comments.

My hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) discussed how fuel prices in his constituency have reached the £1.50 a litre mark. Having visited his beautiful constituency last week as a member of the Welsh Affairs Committee, I can inform my hon. Friend that his effort on that issue is appreciated.

The hon. Member for Mid Norfolk (George Freeman) highlighted how the rising fuel price hinders economic growth, especially outside south-east England and in those sectors of the economy that the UK Government are depending on, if they are serious about their stated aim of rebalancing the economy.

My hon. Friend the Member for Angus (Mr Weir) highlighted the huge problems caused to small businesses in his constituency. He pointed out the impact on disposable income for working families in his valid contribution.

The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) made an informative speech. He made a powerful argument about changing the VAT rate for fuel, and I hope that Ministers will consider his ideas.

In their joint economic declaration last week, the devolved Administrations specifically called on the UK Government to take action to counteract rising fuel and transport costs. The Governments of Wales, Scotland and Northern Ireland all highlighted how rising fuel costs form a significant economic headwind that undermines efforts to rebuild after the recent downturn. The declaration called for the postponement of the proposed duty increase planned for April this year. I am sure that all the Celtic Governments support the need for a fuel duty stabiliser.

In closing, I want to refer to those bodies that have contacted us to support our motion. We have received overwhelming support from many diverse organisations, such as the Farmers Union of Wales, NFU Cymru, the Freight Transport Association, the Road Haulage Association, the Federation of Small Businesses and the Countryside Association. That diversity reflects our point that ordinary families, businesses and workers across the UK acutely feel the effects of volatile fuel prices, although rising fuel duty will inevitably hit rural communities hardest.

Gareth Vaughan, president of the FUW, has written to say how “grossly unfair” it is that we in the UK pay more than any other country for our fuel, because of the “extortionate level of tax” imposed by the UK Government. He added that

“bearing in mind that there is a difference of as much as five pence per litre between rural and city garages in Wales already, the added fuel duty coupled with rising oil prices will be devastating to rural communities all over the UK.”

Jack Semple, director of policy at the Road Haulage Association, has stated:

“The Road Haulage Association welcomes Plaid’s and the SNP’s support for a fuel duty stabiliser”

since

“the volatility of fuel prices is a major issue for hauliers and, increasingly, for their customers.”

John Walker, the FSB’s national chairman, has also endorsed our approach, reminding us that

“Every extra penny spent at the pumps is a penny not being spent elsewhere in the economy…Small businesses want to grow...and create employment but the cost of fuel puts the brakes on their ability to drive the recovery.”

Finally, the FTA has stated:

“Lives and livelihoods up and down the country are suffering in the face of unsustainable and crippling fuel costs. This cost is unsustainable and...as part of the Fair Fuel UK Campaign, the Freight Transport Association and the Road Haulage Association, along with backing from the RAC, are asking government principally to scrap the fuel duty rise planned in April and introduce a methodology for stabilising fuel prices.”

It is not only organisations and individuals outside this place who have backed our campaign. In introducing his plans for a fuel stabiliser in 2008, the then shadow Chancellor—the current Chancellor—described the stabiliser as

“a common sense plan to help families, bring stability to the public finances and help the environment by making the price of carbon less volatile”.

In the light of those comments, people across the UK will ask why his Government oppose our motion today.

19:15

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

This has been an interesting debate, and I thank all hon. Members who have contributed. Fuel prices are undoubtedly of significant concern to hon. Members and the wider population.

It is fair to say that the issue is not new. My hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) has referred to this debate being like “Groundhog Day”. He is a long-standing participant in debates on this subject, and he is influential in setting out the arguments for a rural derogation, to which I shall turn later. He also set out further proposals that may influence this debate in the years to come.

At the moment, there is a particular concern about fuel prices. We have heard today from hon. Members from all parties and from all parts of the United Kingdom about the difficulties that their constituents face because of rising fuel prices. It appears to cost more every time that people fill up the car, and the public understandably want us to do something about that.

[Mr Binley]

I have a message for the Economic Secretary from hauliers in my constituency, such as Wrefords and Butts. They understand what the Government need to do to put the deficit right, but they urge him to do something that was in our manifesto, namely bring forward a stabiliser. They do not understand why we have not done it already.

[Mr Gauke]

I will turn to the stabiliser in a moment. My hon. Friend has touched on a point that my hon. Friend the Member for Morecambe and Lunesdale (David Morris) and my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) also raised, which is the deficit that we face. It is only by coming up with a credible plan to balance the books that we have managed to create the confidence needed for a recovery. To get there, we have had to make some tough decisions, such as raising certain taxes, including VAT, and cutting public expenditure in the teeth of opposition from the Labour party to all our plans.

One of the few things that we inherited that would reduce the deficit were the previous Government’s plans to increase fuel duty. We heard quite a lot from the Opposition spokesperson, the hon. Member for Bristol East (Kerry McCarthy), about VAT. It is worth pointing out that the Labour Budgets of 2009 and 2010 involved the following increases in fuel duty: in September 2009, there was a 2p increase; in 2010, there was a 2.76p increase; and there are 1p increases in 2011, 2012, 2013 and 2014. In total, the increase is about 9p a litre. We cannot dismiss those increases without knowing how we can fund any shortfall.

As the Prime Minister said over the weekend, we

“would love to see tax reductions…but when you’re borrowing 11% of your GDP, it’s not possible.”

So although I sympathise with the points made by hon. Members from all parts of the House, our decisions on tax must be viewed in that context, where every penny we increase fuel duty by raises an additional £500 million and if we cut fuel duty, that money will have to come from somewhere else.

[Dr Whiteford]

I ask the Minister the question that I have asked repeatedly in this debate: why should people who live in rural areas pay a disproportionate share of fuel taxation?

[Mr Gauke]

The two particular areas we have debated today are the fuel stabiliser and the rural fuel duty rebate, which this House has debated on a number of occasions and is clearly of close interest to a number of hon. Members. The Government have made no secret of the fact that we are considering such a rebate. People in rural areas do face particular challenges on petrol and diesel, as fuel prices there tend to be more expensive because of relatively high transport costs—a number of hon. Members have made that point. A lack of alternatives means that people in rural communities have little or no choice but to use the car, which is why we have announced our intention to introduce a rural fuel duty pilot. It will deliver a duty discount of up to 5p a litre on all petrol and diesel which, as the Economic Secretary said at the start of today’s debate, would save some drivers in rural areas upwards of £500 a year.

[Mr MacNeil]

The hon. Gentleman knows that I really welcome the rural fuel derogation and hope it comes soon. Will he give us any idea of when that might be?

[Mr Gauke]

As the Economic Secretary stated, the Government are engaged in informal conversations with the European Commission and we hope to be able to bring together our representations in a formal submission to take this forward, but this matter is not as simple as the hon. Gentleman might like it to be. We are considering the exact scope of the scheme, although the inner and outer Hebrides, the Northern Isles and the Isles of Scilly will certainly be included. I say to him, and to other hon. Members such as my hon. and learned Friend the Member for Sleaford and North Hykeham and my hon. Friend the Member for South Derbyshire (Heather Wheeler), that we can go ahead only when we have got clearance from the European Union. It is important to set out proposals that will achieve that clearance and we can then obtain the unanimous support of the 27 EU member states, which is what we require. Productive discussions are ongoing and we will of course update the House whenever we have any further progress. I hope that we will be able to provide a further update at the time of the Budget. Hon. Members should note, as, to be fair, the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) did, that at least this Government are trying to make progress on this area. The hon. Member for Bristol East did not even make it clear today whether she supports our even trying to do something on this issue, and that is a remarkable position.

The fuel stabiliser proposal was raised by a number of hon. Members, and the hon. Member for Dundee East (Stewart Hosie), in particular, has taken a close interest in it for many years. There is an argument that higher oil prices will automatically lead to higher tax revenues. The Conservative manifesto said that the Office for Budget Responsibility would seek to review this policy to see what we could do in this area. We did ask the OBR to examine how the oil price affects our economy in order to determine how the Government could share the burden of high oil prices and see whether a fair fuel stabiliser could work in practice. The OBR’s assessment was that increases in tax revenue received from oil and gas production can be easily offset by things such as higher inflation, which would lead to higher benefit payments and a further drain on the Exchequer. The reality, as set out by the OBR, is that there is no sudden windfall for the Exchequer as a consequence of higher oil prices. None the less, we recognise the strains that this situation causes and we continue to examine a range of options, including the fair fuel stabiliser. It is right that we must ensure that whatever we do is not only fair, but affordable.

This Government understand the problems people are facing and are taking every action possible to help those most in need, but we also know that we have to act responsibly and ensure that we tackle the record national debt. The increases in fuel duty result from the previous Government’s proposals. Some people argue that we could abandon those proposals, but it is not clear whether that is the position of the Labour party. We need to strike a difficult balance, but our priorities are clear. We must get the economy back on its feet and we must have a private sector leading the recovery and creating new jobs. In contrast to our predecessors, we are seeking to address the genuine concerns that exist about rising fuel prices and we are determined to settle on a proposal that is fair, sustainable and fiscally responsible.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

19:26

Division 191

Ayes: 14

---

Labour: 6
Scottish National Party: 5
Plaid Cymru: 2
Alliance: 1

Noes: 303

---

Conservative: 251
Liberal Democrat: 51

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

19:40

Division 192

Ayes: 297

---

Conservative: 245
Liberal Democrat: 51

Noes: 135

---

Labour: 125
Scottish National Party: 5
Plaid Cymru: 2
Alliance: 1
Independent: 1

The Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).

Resolved,

That this House notes the dramatic increase in the world oil price to over $100 per barrel; further notes that there has been a significant impact on fuel prices in the UK as a result; recognises the impact this has on households and business; notes that the previous administration’s rises in fuel duty that have taken effect during the past year have further increased prices; further notes that the Government inherited the largest deficit in UK peacetime history, that the previous administration had no credible plan to deal with the deficit, that the Government has been clear that everyone will make a contribution to tackle the deficit but that the most vulnerable will be protected, and that the Government is considering a fair fuel stabiliser that could support motorists and businesses when oil prices are high; further notes that the Government in addition is taking forward swiftly its commitment at EU level to introduce a pilot scheme that would deliver a discount of up to 5 pence per litre in duty in remote rural areas such as the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly; and further notes that the Chancellor will update the House on all fiscal matters at the time of the Budget.

[The Secretary of State for Education (Michael Gove)]

On a point of order, Mr Speaker. I am grateful to you for your ruling earlier this afternoon that the phrase “rank hypocrisy” is unparliamentary language. I should therefore like to withdraw the phrase, which I used earlier today, and apologise to the right hon. Member for Leigh (Andy Burnham), who may have felt that it was directed at him. Under no circumstances would I wish to accuse him of any activity that was in any way covered by the use of unparliamentary language.

[Mr Speaker]

I am extremely grateful to the Secretary of State and thank him, on behalf of the House, for the apology he has given. As far as I am concerned, that is the end of the matter.

[Ms Angela Eagle (Wallasey) (Lab)]

On a point of order, Mr Speaker. Rumours are rife in the Press Gallery, and more widely, that the Government are planning to announce the result of their talks with the banks on bonuses and lending, otherwise known as Project Merlin, to TV stations and via a press release this evening. Do you agree with me that if the Government are doing private deals with the banks, they should have the courage to come to the House, that the House should be the first to hear about it and that announcing the outcome behind the backs of Members of this House would be totally unacceptable?

[Mr Speaker]

I am grateful to the hon. Lady for both her point of order and her advance notice of it. The Procedure Committee published its report on ministerial statements only last week, reaffirming the principle that important statements should be made first to this House. As a former Minister, and indeed an experienced parliamentarian, she will be aware of her options for taking up the matter. The Table Office will be open until the rising of the House, and it will not have escaped her notice that the Leader of the House is in his place and has heard what she has said.

Registration of Members’ Financial Interests

Monday 7th February 2011 Commons Chamber

19:53

[Mr Kevin Barron (Rother Valley) (Lab)]

I beg to move,

That—

(1) this House agrees with the recommendations in the Tenth Report of the Committee on Standards and Privileges, on Registration of income from employment (HC 749); and

(2) accordingly the resolution of the House of 30 April 2009 relating to the Registration of Members’ Financial Interests be amended, by leaving out paragraph (2) and inserting:—

“(2) That such a payment shall be registered

(a) where its value exceeds one tenth of 1 per cent. of the current

Parliamentary salary; or

(b) where the total value of payments from the same person, organisation or company in a calendar year exceeds 1 per cent. of the current Parliamentary salary.”

Hon. Members will recall that the Leader of the House is one of my predecessors as Chair of the Standards and Privileges Committee. I know that he will be as pleased as I am that time has been found to take forward two sets of proposals in which he played an important part in a former life, particularly as one of them was agreed in the 2008-09 Session.

The more recent of the two reports seeks to make a simple but welcome change to the rule requiring Members to register each payment they receive for work carried out outside the House. As we note in the report, it might not have been the intention of the House when it agreed the original resolution in April 2009 to require Members to register bottles of wine or bunches of flowers, but that has been the effect. The problem is that when a Member receives a bottle of wine, a bunch of flowers or maybe even a ballpoint pen as a thank you for giving a speech or hosting an event, it might be intended as a gift, but it has the characteristics of a payment. A gift is given in its own right, without the expectation of anything in return. Where something is given in return for a service rendered, however, it is a payment, and therein lies the difficulty. As we state in our report, the Committee considered whether it might be possible to draw a line between the circumstances in which the bottle of wine or bunch of flowers is clearly a gift, and those in which it is clearly a payment. We concluded that, wherever such a line is drawn, the distinction is unlikely to be sufficiently clear and so the risk that Members would unintentionally fall foul of the rule would remain.

The Committee therefore favours a threshold, but to preserve confidence in the register we propose that it should be set at quite a low level. The level we propose is 0.1% of a Member’s salary for individual payments, which is £66, and 1% of a Member’s salary for the cumulative total of payments from the same source in the same year, which is £660, which we think is proportionate. By linking it to Members’ pay, the House will ensure that we do not have to keep resetting it.

I want to emphasise that we do not take issue with the intention behind the resolution of April 2009, which was that the public should be able to know how much MPs are paid for other employment and who pays them. We simply want to make the rules more workable and to catch only the sorts of payments that are relevant to the central purpose of the register, which is to show whether a Member has received a material benefit that might reasonably be thought by others to influence his or her actions, speeches or votes.

There are, of course, other recommendations that we could have made, two of which are particularly worth mentioning. The first is the requirement to register the hours worked. I know that that requirement has not been universally popular in the House, but any proposal to amend it would require proper consideration. I will of course listen to any comments made in today’s debate and discuss them with my colleagues in the Committee. The second requirement, which is mentioned in the report, relates to the threshold that applies for gifts. The threshold is currently 1% of the salary, or £660, and was set in 2001. I think that the Committee needs to consider whether that remains the right level and I intend to invite it to do so later in the Session.

[Nicholas Soames (Mid Sussex) (Con)]

I should declare an interest, as I speak quite a lot for colleagues, although so far I have never been given anything—I am not sure what to make of that. The right hon. Gentleman is not only Chair of the Committee, but a long-standing member of it, so he has considerable experience of these matters. On a serious point, does he not agree that if we all lose sight of common sense when it comes to declaring interests, we really will run out of road. We really must return to some form of understanding that, although codification of these matters is now deemed necessary, because of events that we all deeply regret, it does nothing for the standards of this House or for what it might think of itself if we have to codify the value of a gift given to a Member who makes a speech on behalf of a colleague.

[Mr Barron]

I will not say whether I agree or disagree with the hon. Gentleman. I have said that I will bring all points made in the debate to the Committee’s attention, and we will decide on that basis whether to look into these matters.

[Mr Speaker]

Order. Just before the right hon. Gentleman continues, I note that he has referred to matters that are in motion 3. I make no complaint about that, but it leads me to think that, for the purposes of his speech, he is conflating the two separate motions. As I say, I make no complaint about that. No request was made that the motions be taken together, but if it is for the convenience of the House, the Chair is very happy that they be taken together. [Hon. Members: “Aye.”] I get the impression that that is the position. I am grateful. So we shall also consider the following:

That—

(1) this House agrees with the recommendations in the Eighth Report of the Committee on Standards and Privileges of Session 2008-09, on All-Party Groups (HC 920); and

(2) accordingly the resolution of the House of 17 December 1985, as amended on 10 March 1989 and 29 July 1998, be further amended by leaving out paragraph 3 and inserting:—

“3. Groups whose membership:

• is open to all Members of the House of Commons and House of Lords, and

• includes at least 20 Members (each of whom must be a Member of the House of Commons or House of Lords), comprising: at least 10 Members who are from the same political party as the Government, and at least 10 who are not from the Government’s party (of whom at least six must be from the main opposition party), and

• includes at least one officer who is a Member of the House of Commons be required to register the following information on the Register of All-Party Groups:

(a) The full title of the group. If persons other than Members of the Commons or Lords are allowed full membership (i.e. voting rights) the term ‘Associate Parliamentary Group’ must be included in the group’s title. If such persons are not allowed full membership the term ‘All-Party Parliamentary Group’ must be included instead. The rest of the group’s title should simply reflect the group’s subject so that the latter is obvious from its title alone.

(b) A brief summary of the group’s main purpose.

(c) The names of the group’s officers. At least one officer must be an MP; each of the other officers must be a Member of the House of Commons or House of Lords.

(d) The names of exactly 20 qualifying Members (each of whom must be a Member of the House of Commons or Lords), comprising: 10 Members who are from the same political party as the Government, and 10 who are not from the Government’s party (of which at least six must be from the main opposition party).

(e) The contact details of the group’s registered contact, who must be both an officer of the group and a Member of the House of Commons, and is the person ultimately responsible for the group’s compliance with the rules of the House.

(f) Any relevant gainful occupation of staff to the group who hold a parliamentary pass (relevant gainful occupation means any occupation that is advantaged by the privileged access afforded by the pass).

(g) The source and extent of any financial benefit (e.g. donations) and the source and nature of any non-financial material benefit (e.g. provision of goods or services) received by the group from a single source outside Parliament, if the value of the benefit equals or exceeds the financial threshold for registration (currently £1,500) in a calendar year. Once the group has made that initial registration, any further donation received from the same source in the same calendar year should be registered if its value exceeds £500.

(h) The website address of any organisation registered as the group’s secretariat.

(i) If a consultancy is registered as the group’s secretariat, the names and website of the consultancy plus the name of any client of theirs who is specifically paying the consultancy to act as the secretariat must also be registered. The consultancy must either publish on its website its full client list or agree to provide such a list on request, otherwise it is not allowed to act as the group’s secretariat.

(ii) If a charity or not-for-profit organisation is registered as the group’s secretariat, the former’s name and website must also be registered. The charity or not-for-profit organisation must agree to make available on request a list citing any commercial company which has donated either as a single sum or cumulatively more than £5,000 in the course of the 12 months prior to the month in which the request is made, otherwise it is not allowed to act as the group’s secretariat.

(i) The address of the group’s website, if it has its own website.

(j) The date of the group’s inaugural election of officers and of any Annual General Meeting held thereafter.

(k) Affiliation to the Inter-Parliamentary Union and Commonwealth Parliamentary Association, if the group is affiliated to either or both.”

I call Mr Kevin Barron, dealing with the two motions.

[Mr Barron]

I now turn to the report on all-party groups, published in July 2009. The proposals set out in the report are a package, most of them originally recommended by the previous Parliamentary Commissioner for Standards, Sir Philip Mawer, to whom I pay tribute. In summary, the proposed changes will require each group to register the website address of any organisation acting as its secretariat, where the secretarial assistance is more than £1,500 a year; in the case of a charity providing such support, require the charity to make available on request a list of commercial donors who have donated more than £5,000 to it in the previous 12 months; in the case of a consultancy providing such support, require the consultancy to publish on its website its full client list or provide such a list on request; require groups to register their website address; require groups to include on their website details of their sponsors and providers of secretarial services; and require each group to nominate an MP, who must also be an officer of the group, to act as the main point of contact for the group and also as the person who is ultimately responsible for ensuring its compliance with the rules.

In my view, those are sensible tidying-up changes that will increase public confidence in the Register of All-party Groups. The Committee’s report also proposes tightening the rules for the registration of all-party groups by aligning them with those for inclusion on the separate approved list maintained by the Commissioner’s office. This means that groups will no longer qualify for inclusion on the register unless they comply with the more extensive requirements of the approved list, such as the need to provide the names of 20 qualifying Members.

Taken as a whole, the changes should improve the scheme’s operations, providing clearer rules for those running the groups and those compiling the register, and greater transparency and ease of use for those who wish to consult the register.

[Mr Edward Leigh (Gainsborough) (Con)]

I am just interested in knowing the right hon. Gentleman’s general approach. Does he not realise that we had the least corrupt system of any Parliament, perhaps in the world? The more rules and regulations we bring in, the more the registry office will be snowed under. The absurd rule that it has to register every payment is, frankly, ridiculous; it cannot cope at present. The more rules we have, the more people will break them and the more corruption will be driven underground. We should have a general approach, because the public want to know broadly what we earn when that might affect our behaviour—in other words, a fairly large sum. That is where we should be—with as deregulatory an approach as possible.

[Mr Barron]

As I said earlier, I shall invite the Committee to look into those matters to see whether any changes ought to be made.

I just spoke about the Committee report of July 2009 on making all-party groups more transparent, so that we know exactly who runs those organisations and what moneys go into them. That seems to be an obvious thing for us to do. The report has been waiting for our attention since July 2009, and I hope that the House will commend both reports, so that they can go ahead and make us better at what we do. We might want to look at the issues that were raised in the two interventions, and if we do, we will ask the House and individual Members for their view. On that basis, I commend the reports to the House.

20:03

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

I congratulate the right hon. Member for Rother Valley (Mr Barron) on securing this debate about two modest but important improvements to the rules on the registration of Members’ financial interests and on the registration of all-party groups. I also congratulate my right hon. Friend the Leader of the House, as the new rules relating to all-party groups were produced under his chairmanship of the Standards and Privileges Committee back in July 2009.

The Committee’s proposal to reintroduce a sensible de minimis threshold for the registration of income from employment will remedy a problem that arose with the rule changes that the House agreed to on 30 April 2009. Under those new rules, Members are required to register every single payment they receive for remunerated employment of any kind, however small its value. The problem is that, for the House’s purposes, “remunerated employment” means any benefit of any kind which a Member might receive in exchange for providing a service.

The test is not whether there is a formal employment relationship in law, or whether there is some kind of contractual obligation on either side, but whether the Member would have received the benefit if he or she had not provided some kind of service. This includes any small gift to a Member who addresses a school assembly, opens a village fete or makes, as the hon. Member for Mid Sussex (Nicholas Soames) said, a speech at a constituency function. I am very sad to hear that he has never received any sort of thank you—not even a meal, from the sound of it. I find it extraordinary that he should go so unrewarded for his labours, but nevertheless any gift—

[The Vice-Chamberlain of Her Majesty's Household (Mr Mark Francois)]

A gift would be cheaper!

[Mr Heath]

The right hon. Gentleman says from a sedentary position that “a gift would be cheaper” than providing a meal. I cannot believe that in the case of the hon. Member for Mid Sussex.

Anyway, any small gift received under those circumstances must be registered, and that has led to a large number of registrations of things that most of us would regard as gifts—tokens of thanks for some small service. For example, my hon. Friend the Member for East Dunbartonshire (Jo Swinson) has been commendably thorough in her registrations, which include a Scottish Bible Society cloth bag worth £2.95, some branded pens and pencils from a local recycling company worth £5 and a Girlguiding centenary pencil to the value of 35p. No one will honestly feel that her judgment has been clouded by the generosity of those gifts, but nevertheless she has complied with the strict requirements that the House places on us all.

My examples would not be complete if I did not mention that my right hon. Friend the Leader of the House has registered a gift of a pair of hand-knitted, yellow socks, which I am very sad to see he is not wearing today. He was given them when he opened a wool shop in his constituency, and I understand that the owners even went to the trouble of contacting his office to establish his shoe size.

[Stephen Pound (Ealing North) (Lab)]

I am quite awed by the thoroughness of many right hon. and hon. Members, but will the hon. Gentleman help me? I do not drink wine—I tried it once and did not much care for it—but when I addressed The Spectator dinner just before Christmas the organisers sent me half a dozen bottles of wine. I have not the faintest idea how much they are worth, so how does one find the price if not of a Scottish Bible Society bio-recyclable-degradable bag, then of things like a bottle of wine? Can the hon. Gentleman give some advice or assistance to those of us who are innocents in the area?

[Mr Heath]

The rather straightforward and dull response to the hon. Gentleman is, consult the registrar if in doubt. The registrar has an omniscience that transcends any normal Member, in that they know the value of all things. They will I am sure be able to find out the value of that wine gift, which I suspect, being from The Spectator, is a rather fine half case of wine. I am sure he fully deserved to be paid in such kind.

[Nicholas Soames]

The hon. Gentleman is himself beginning to stray—I am sure without realising it—into an area where common sense has completely departed. Surely it is important that common sense is exercised in all such matters, but it is absolutely impossible to codify the situation without it looking completely ridiculous.

[Mr Heath]

It is because there is a danger of the situation looking completely ridiculous that the right hon. Member for Rother Valley and his Committee have come up with the proposed changes. There clearly is a gradation. If the hon. Member for Ealing North (Stephen Pound) were, in response to his speaking at an event for The Spectator, given several cases of Chateau d’quem, it might well be considered that that would have an effect on his judgment, whether he consumed them or not—but a half bottle of Newcastle Brown Ale might not be considered to have the same effect.

There is a need for common sense. That is precisely why the right hon. Gentleman has come forward with the proposal for a sensible de minimis requirement worth about the £65 mark. Most people can judge whether what they have received is likely to be in that region. Judging from my experience, I am very rarely given a token that comes to anything like that value. I think that if I were given something of more than that value, it would suggest that I was involved in paid employment of some kind—doing it for some remuneration—and that it should be declared. One must use a level of common sense.

I do not want this debate to become merely an insight into the life of a constituency MP. The purpose of the register is to provide information about any material benefit that a Member receives and which might reasonably be thought by others to influence his or her conduct in the House. The trivial nature of these registrations and the effort and expense involved in registering them does nothing, I would suggest, to contribute to the purpose of the register. I welcome the Committee’s proposal to introduce a sensible de minimis threshold of 0.1% of a Member’s salary, which currently works out at about £65. That is a sensible compromise between ensuring clarity and accountability while not over-encumbering the register with things that are frankly of little or no concern to any reasonable member of the public.

Turning to the rules on all-party groups, this motion implements recommendations made by the Committee in July 2009. I will not repeat the details of the rule changes, which the right hon. Member for Rother Valley has already outlined to the House. The Government welcome these proposed changes. The House will be aware of the valuable work that is done by all-party groups on a vast range of issues—for example, the armed forces, the BBC, beer and cider, clean water, underground space and shipbuilding. There can scarcely be a country in the world, nor—as the right hon. Member for Saffron Walden (Sir Alan Haselhurst) told a debate in Westminster Hall last week—a condition of the human body that is not covered by an all-party group. As the House will be aware, some groups are campaigning bodies, some are concerned with building relationships with other countries, and some are essentially social groups. The examples that I have here suggest that the parliamentary choir and the rugby club might fall into the latter group, although I have my doubts as to whether they do not also, to an extent, have a campaigning purpose.

I would not wish for one moment to frustrate the work of these groups or to place unnecessary obstacles in their way. However, it is important for the House to have robust registration requirements in place in order to protect its reputation, the reputations of hon. Members, and those of the groups themselves.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Although the recommendations are entirely worthy and should be supported, the one issue that remains—the right hon. Member for Rother Valley (Mr Barron) may be able to reflect on it when he winds up—is that groups often appear to be overlapping or duplicating, and we are always spawning more groups than we can manage properly to attend or service. Might it be possible, informally if not formally, for the registrar to ensure, when somebody seeks to register a group, that the activity is not already covered somewhere else, so that we do not end up duplicating activities?

[Mr Heath]

I am grateful to my right hon. Friend for that comment. He is absolutely right to say that there is a degree of overlap and proliferation among all-party groups. It would certainly be helpful if the registrar were able to give guidance on where there is any likely overlap. I would not be happy for the registrar to be in a position to veto the formation of a new all-party group that might have a different view or complexion as regards a particular matter, but knowing that somebody already deals with a specific subject might be helpful at an early stage in a group’s formation in order to prevent duplication.

[Mr Denis MacShane (Rotherham) (Lab)]

I declare an interest in that I am chairman of the all-party group on Georgia, having been asked to take it over from my good friend Bruce George, the former right hon. Member for Walsall. Apart from that, I am not really active in any of these groups. Several colleagues are, however, and they have to overlap; otherwise, the group dies because if it does not have its officers it ceases to exist. Yet they are pilloried in the press as junketeers and all the rest of it. Is there any mechanism that allows them to send a statement to these reptiles that in fact an all-party group for no-man’s land somewhere can be of importance—that these groups can help our ambassadors, chambers of commerce and investment? How do we push back this endless sneering that any involvement with any country outside Britain is something that no right hon. or hon. Member should take part in?

[Mr Heath]

I am grateful to the right hon. Gentleman for making that point. All-party groups that deal with overseas countries are often of huge value in increasing understanding and maintaining contacts with parliamentarians in those countries and, indeed, their civil societies. He mentioned that Members are often members of several different groups. That, to me, is not duplication. It is not an obstacle; it is simply showing a breadth of interest. My right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) was referring to the situation where more than one all-party group has an overlapping interest, which is not quite the same thing.

All-party groups, particularly some of the overseas groups, are of value. But—and there is a but—there is a need for transparency in the way that they operate and the degree to which they may or may not provide benefit to Members. First, many, but by no means all, groups provide a forum for commercial interests and campaign groups to lobby hon. Members. There is absolutely nothing wrong with that in a free society, and lobbying is one of the routes by which hon. Members can come to a better understanding of some of the policy issues that confront us in this House. However, the public rightly expect to know who is lobbying whom, and on whose behalf and with what outcome. That is the crucial aspect. That is why the Government are working towards increasing transparency and openness in the activity of lobbyists by introducing a statutory register. These proposals also contribute to that objective.

Secondly, as the right hon. Member for Rotherham (Mr MacShane) said, Members receive hospitality, including in some cases overseas travel, through some of the groups. Of course, Members are still under a duty to register any registrable interest personally, but there is a legitimate public interest in the publication of full details about the groups under whose auspices such benefits may be received.

Finally, although all-party groups are independent of the House, they carry something of its brand. They can use the word “parliamentary” in their titles, and they have access to the facilities of the House. I am sure that in the public mind, the distinction between an all-party group and a Committee of this House is unclear, at best. The House therefore has a legitimate interest in ensuring that the groups observe the highest standards of transparency.

I should like finally to touch on an issue of drafting. The motion refers to Members who are from the same political party as the Government and those who are not from the Government’s party—singular. I have been advised by the Clerks that this is already being interpreted in motions relating to all-party groups, as it is in other resolutions of the House, as meaning all those parties making up the Government in the situation of a coalition. This is the advice that has been given to Members since the start of the Parliament by those operating the system, and it is working without any problem to date. While it would have been possible to amend the motion so that it reflected more accurately the current position of the coalition Government, it would have put it at odds with other resolutions in use around the House. For that reason, the motion is not being amended and is being put to the House in a form consistent with other resolutions of the House.

On behalf of the Government, I thank the right hon. Member for Rother Valley and other members of the Standards and Privileges Committee for their work. I am pleased to support the motions and commend them to the House.

20:18

[Helen Jones (Warrington North) (Lab)]

I begin by thanking members of the Standards and Privileges Committee, both past and present, for the work they have done to bring these two motions before the House. We have heard from Members about the need for common sense in our procedures. The motions are an attempt to introduce some consistency and common sense into our registration procedures. It is very easy for the House to set out general principles, but it is often quite tricky to bring forward the motions that put those principles into practice. In this case, the Committee has done a good job, and I support the proposals.

One of the motions deals with the registration of all-party groups. I must declare an interest as the chair of the all-party group on stroke and as secretary of the parliamentary friends of CAFOD—the Catholic Fund for Overseas Development—group.

It is interesting to look back on how the Committee’s consideration of these matters arose. Originally, there was a report on lobbying and all-party groups by the Parliamentary Commissioner for Standards. The Committee rightly looked at his recommendations to work out how they could be put into practice and which it was most sensible to put into practice. Having looked back at the original suggestions, I am bound to say that some of them were unworkable.

The Committee has attempted to make the way in which assistance to groups is registered transparent and to prevent the register from increasing to such a volume that it is unusable or that it requires corrections every other day. Hence, it suggests that we stick to the current principle that benefits worth less than £1,500 in a calendar year are not registrable. The onus is put on consultancies that work with all-party groups to be transparent about their clients, either through a published list on their website or by making such a list available to people who ask for it. It also places requirements on charities.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Perhaps this is a question that I should have asked the Deputy Leader of the House. How does the hon. Lady envisage the £1,500 limit working for people who give pro bono advice to parliamentary groups? Will they have to compute a value for that advice, or will it be taken on face value that it is not charged and therefore is not declarable?

[Helen Jones]

The hon. Gentleman raises an interesting question. It is quite easy to put a value on secretarial support and staff time. Pro bono advice is a more difficult area, and I cannot give him an answer on that off the top of my head. He is right to raise it, and it needs to be discussed, perhaps by the Standards and Privileges Committee and the Registrar of Members’ Interests.

I am grateful to the Committee for considering how charities should operate in this regard, and for making it clear that it does not want to put an insupportable burden on charities that work with all-party parliamentary groups. The Committee does ask charities to make available lists of commercial companies that have donated more than £5,000. That is a sensible proposal.

As we have heard, there are proposals on making websites available. There are also recommendations to align the rules relating to the Register of All-party Groups with the rules relating to the approved list, so that only groups that meet the criteria for inclusion on the approved list should be permitted to register. The Opposition believe that those suggestions are sensible and proportionate. They meet the requirement of transparency, while not imposing unnecessary burdens, particularly on charities.

The House tried in 2009 to deal with the registration of income from employment, when it decided that all income from other employment should be registered, whether or not it exceeded 1% of the parliamentary salary in any year. The then Standards and Privileges Committee said that the rule would probably have to be reviewed in this Parliament. In particular, it suggested that there be consideration of a de minimis rule. Members who were in the House at the time will remember that there was a debate on whether, for instance, a bottle of wine given to someone after a speaking engagement would become registrable as remuneration for employment. The then Chair of the Committee thought that it would, and the Minister replying thought that it would be counted as a gift or hospitality and therefore would be subject to the de minimis rule for gifts. That difference was not over the intention of the rule, but about how it would be interpreted in practice.

It is clear that the advice given to Members has led to the registration of things such as pots of honey and bunches of flowers. I do not believe that such things would be regarded by any of our constituents as remuneration for employment. Frankly, if anyone is working for a pot of honey, I dread to think how many employment laws are being broken in the process. I will not even try to enumerate them, because it is so long since I practised law.

I also think that the registration of such things is perceived as an insult to those who gave them, who simply thought that they were making a generous gesture or rewarding hospitality; they did not in any sense think that they were rewarding a Member of Parliament. It has been common for my constituents to load me with flowers—I am sure that other hon. Members are given flowers wherever they go. My constituents do not believe that they are paying my wages in doing so. They believe that they are making a kind and thoughtful gesture. That is how it should be dealt with.

The Committee has recommended that registration should apply only to payments of more than 0.1% of the parliamentary salary and of more than 1% of the parliamentary salary for multiple payments from a single source. There are Members who think that the registration threshold is still too low. I suggest that we will have to consider that in the future. I understand why the Committee made this recommendation.

[Geoffrey Clifton-Brown]

I am grateful to the hon. Lady; she is being very generous in giving way, and I do not want to prolong this debate. I have a feeling that the threshold may be too low, particularly as parliamentary salaries are likely to be frozen or have very small increases in the coming years, whereas the inflation on gifts will be 4% or 5%. The fiscal drag of bringing registration into the system will become greater and greater. If we are not careful, it will lead to the situation that she described of the register becoming too full to be used.

[Helen Jones]

The hon. Gentleman makes a valid point.

I understand why the Committee made these recommendations: they are simple, easy to operate and do not need constant updating. I suggest that the House needs to let the rules bed in and then see how they are working. We have to get to a situation where what we register is what can reasonably be thought to influence hon. Members. I argue strongly that if anyone in this House can be influenced by the gift of a pencil, a pot of honey or a bag, they probably should not be here. I do not think that any of our constituents believes that we can be influenced by such things. We can look again at the operation of the rules over time, but for the moment, they are the sensible way forward. I thank the Committee for its work and I commend the motions to the House.

20:27

[Robert Halfon (Harlow) (Con)]

The report by the Standards and Privileges Committee on all-party parliamentary groups makes three reasonable suggestions that I support. First, a list of commercial companies that donate more than £5,000 to an APPG should be available on request. However, I see the case for a lower threshold—possibly £500—to ensure that APPGs are as transparent as possible. Secondly, a charity that supports an APPG should have its website listed on the Register of All-party Groups so that people can access relevant information. Thirdly, publications by APPGs should carry the names of their authors and the organisations that provide secretariat services to the group, plus the names of any relevant client or sponsor. Parliament should be transparent and I believe that these reforms will help us to move in that direction. However, I am concerned about which organisations can become an APPG’s secretariat and the parliamentary access that it affords.

Last week at business questions, I asked the Leader of the House for an urgent statement on iEngage, an extremist group that seeks to influence Government and discredit moderate Muslims. It has been appointed secretariat to the new APPG for Islamophobia. It defends mosques that host terrorist preachers, schools that teach anti-Semitism and homophobia, individuals such as Daud Abdullah who have pressed for terrorist attacks on the British Navy, and the invitation of hate preachers to Britain. When those revelations emerged, the elected chair of the APPG, my hon. Friend the Member for Keighley (Kris Hopkins), and the vice-chair Lord Janner, stood down in protest.

[Sir Peter Bottomley (Worthing West) (Con)]

I am sorry to trouble my hon. Friend, but perhaps I can give him notice that I will make a passing comment on that matter if you call me to speak later in the debate, Mr Deputy Speaker. There may be more than one side to this.

[Robert Halfon]

I look forward to it, and I had a feeling that that was the case from the e-mail that my hon. Friend sent me. Because he is counter-intuitive on so many issues, I urge him to be counter-intuitive on this one and not to go along with the tide of taking the soft way on Islamism.

I received a letter from the Serjeant at Arms today informing me that iEngage has not yet been issued with a parliamentary pass. I am grateful to her and her office for their prompt and professional response on the matter, but at the same time, there is still some confusion in the House records, as the register of APPGs on the parliamentary website on Friday 4 February, last week—I have it here—was still indicating that iEngage’s head of research, Shenaz Bunglawala, had been granted a Commons pass in her capacity as the secretariat to the all-party group on Islamophobia.

[Simon Hughes]

To follow up on what the hon. Member for Worthing West (Sir Peter Bottomley) said, I am sure that the hon. Member for Harlow (Robert Halfon) has done his research and understands that I remain an officer of that group. I will therefore seek to catch your eye, Mr Deputy Speaker, because it is important that the latter’s comments, which are his opinion, are not necessarily regarded as factually and objectively accurate. I am very happy to engage in the debate, but there are certainly at least two sides to the story, if not more.

[Robert Halfon]

My later remarks will show that I am not just giving an opinion, I am giving hard facts. I urge my right hon. Friend, who is a progressive individual, to look at the organisation in question properly and support progressive Islamic groups that do not hold the views that iEngage holds. We should judge organisations by the company they keep. Just as he would condemn somebody who spent their time supporting fascism, even if they did not commit fascist acts, he should not support Islamist groups that support extremism.

[Stephen Pound]

I am listening with great interest and, I have to say, with very little knowledge of the circumstances that the hon. Gentleman describes. The subject to which he is speaking seems so important that I ask him whether it would not be more appropriately addressed in a full and separate debate of the House rather than in the context of the motions before us.

[Robert Halfon]

I did ask my right hon. Friend the Leader of the House for a debate and a statement last week, and he suggested that I bring the matter up in this debate. As this matter is about the secretariat of an APPG, I think the current debate is the right forum for bringing it up.

The online records on the parliamentary website state that iEngage

“acts as the group’s secretariat”,

a role that involves taking minutes of its meetings and heavily influencing its reports and speaker programme. The Serjeant at Arms has clarified to me in absolute terms that no pass has been issued. In an e-mail to me a few hours ago, she stated:

“We have spoken to the ex-Chairman and ex-Deputy Chairman of the APPG. It was iENGAGE who claimed they had a Parliamentary pass, but there is no evidence whatsoever to support this claim. As I said before, no application has been made and no pass issued for anyone connected to iENGAGE.”

[Mr MacShane]

I think it is appropriate for this matter to be discussed in the debate, because it is a great worry to many people that an organisation with a very clear ideological purpose should be seeking to infiltrate the House of Commons and act as a secretariat. My Muslim constituents are worried about that. I do not know Mrs Bunglawala, but I have certainly heard Mr Bunglawala say at a meeting that he cannot condemn the lapidation—stoning to death—of women, because thus it is written in the Koran. He is entitled to that point of view, but I do not think it should be propagated. As the Prime Minister rightly says, and as I have been saying for some time, we have to keep ultra-Islamist ideologues out of our campuses and keep them from poisoning young minds. If there is even a hint of suspicion—and there is more than that—that it is now the secretariat of an all-party group, it is quite appropriate for the matter to be raised tonight.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I think that we are in danger of straying into security matters. I would like us to try to keep to the motion. I know that it is broad, but we are in danger of going down an avenue that could possibly lead to security matters about who is and who is not issued with a pass. I would therefore appreciate it if we stuck to the general motion.

[Robert Halfon]

I will do my best, Mr Deputy Speaker. I thank the right hon. Member for Rotherham (Mr MacShane) for his remarks. As he does so often on the issue that we are considering, he hits the nail on the head. The Prime Minister’s comments at the weekend fit very much with his line of thinking.

I oppose Islamophobia in all its forms as vehemently as I oppose anti-Semitism, chauvinism or any bigotry. I was recently on an all-party group delegation to northern Iraq in the predominantly Muslim state of Kurdistan, which is a beacon for the prosperity and security that can be achieved when Christians, Muslims and Jews live harmoniously together. I am an active member of the APPG on Kurdistan and secretary of the APPG on Azerbaijan because I want to support progressive Muslim nations.

However, the problem with iEngage and its aggressive approach is that the views that it publishes and defends and the well documented history of its officers and trustees undermine any attempt to tackle anti-Muslim bigotry. Indeed, iEngage supports precisely the sort of extremist groups that fuel prejudice and anti-Muslim hatred, and grossly misrepresent Islam.

Shortly after my request for an urgent statement on iEngage, I was attacked online in what appeared to be a co-ordinated effort. That included a verbal assault from Inayat Bunglawala, who until recently was iEngage’s head of policy and research.

[Mr Deputy Speaker]

Order. I understand that the hon. Gentleman wants to get things on the record, but we are dealing with a motion, and I think that we are straying away from the relevant points to which we should be sticking, and getting into issues about individual groups. The motion is about the future of all-party groups, and I am not sure where the connection is. I understand that the hon. Gentleman wants to make his points, but we are in danger of straying way off where we should be.

[Robert Halfon]

On a point of order, Mr Deputy Speaker. I had originally planned to make a point of order about the subject this afternoon, but the Speaker’s Office asked me whether I still wanted to do that, given that I would be raising the matter tonight, and I said no. The Speaker’s Office was therefore well aware that I intended to raise the issue, and because it is about an APPG and its secretariat, I feel that it is relevant to tonight’s debate.

[Mr Deputy Speaker]

Comments must relate to the motion. I understand the advice that has rightly been given, but speeches must relate to the motion.

[Sir Peter Bottomley]

Further to that point of order, Mr Deputy Speaker. For us to stick to the terms of the motion, passing references to individual matters may be fine, but if we are induced—rather than “provoked”—into going into such issues in detail, the debate will change its character and its usefulness. If the advice to my hon. Friend the Member for Harlow (Robert Halfon) was that he could mention the subject, that is fine, but to go on at great length will lead to the rest of us trying to do the same thing.

[Mr Deputy Speaker]

That is quite right. Hon. Members could start raising other issues, and I am therefore frightened that the debate will not be the one that we should hold, and that we will be drawn into other subjects. The hon. Gentleman has mentioned the issue that he needed to raise, but the debate must not stray from the motion.

[Robert Halfon]

I need to raise the issue because we are discussing APPGs under the motion.

[Mr Deputy Speaker]

Order. You may wish to raise the issue, but you cannot. We must stick to the motion. I am trying to be as helpful as I can, but we are being tested. Please, if you can relate the matter directly to the motion, do that, then we can continue, rather than drawing other Members into a subject that we should not be discussing tonight.

[Simon Hughes]

On a point of order, Mr Deputy Speaker. I remain an officer of the group, and there is an issue about who should comprise the secretariat. There will be a meeting for colleagues in both Houses to discuss the matter, which will be reviewed. I hope that that will be an appropriate forum for discussing the way in which the group will be looked after, and that we can take the subject away from the wider debate to an appropriate place for people who have an interest.

[Mr Deputy Speaker]

I welcome the point of clarification, which certainly clarifies matters to the House. I thank the right hon. Gentleman.

[Robert Halfon]

rose—

[John Mann (Bassetlaw) (Lab)]

Is not one of the key issues that the hon. Gentleman highlights the dilemma of whether a group of Members of Parliament, as an APPG, appoints a secretariat, and the danger that, in some instances, a secretariat—particularly a professional one—can essentially scout around for Members of Parliament to create the all-party group that the secretariat wishes to run? Should not Members of Parliament appoint a secretariat, not the other way around?

[Robert Halfon]

Yes. The hon. Gentleman is exactly right. There should be proper security procedures and vetting for organisations that become secretariats of all-party groups.

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) said that what I said was just my opinion. If I am not allowed to continue in that vein, I cannot answer his query and those of others on why I said what I have said. I need to give evidence to show why I am so worried that the proper procedures have not been adhered to in relation to secretariats of that particular group. I therefore hope you will allow me, Mr Deputy Speaker, to elaborate a little bit.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am not going to be tempted down that avenue. We have said that we have a debate before us, and I want to make sure that everybody is aware that we stick to it. The motions are about the new rules and the future of groups. We are talking about an issue that has happened, and I believe that that discussion ought to take place in another forum—the appropriate forum. The detail that we are getting down to is not for here, tonight. This debate is not about that.

[Mr MacShane]

On a point of order, Mr Deputy Speaker. The motion is widely drafted. It states:

“If a charity or not-for-profit organisation is registered as the group’s secretariat, the former’s name and website must also be registered.”

It also states that such an organisation must announce what it is and tell us about the details of its website. One cannot argue a general case without adducing evidence and examples, and the hon. Member for Harlow (Robert Halfon) is doing exactly that. There really is no point in debating these things—

[Mr Deputy Speaker]

Order. That is not a point of order. I have got to say that the debate must relate to the motion before us, but it is not at the moment. As much as advice might be given from right hon. and hon. Members, I am making the ruling. The debate must be related to the motion before us—that is the end of that. If the hon. Member for Harlow wishes to continue on the motion before us or to relate the two motions together, that is fine.

[Robert Halfon]

In conclusion, although I support all-party parliamentary groups, I call on members of the all-party group on Islamophobia to think seriously about their choice of secretariat and the message that that sends. I ask the Standards and Privileges Committee and the Serjeant at Arms to consider how the House might vet the secretariat of APPGs—perhaps by a special committee—before they are placed on the approved list, especially when there are security concerns.

20:39

[Chris Bryant (Rhondda) (Lab)]

I commend the hon. Member for Harlow (Robert Halfon) for bringing an important matter to the attention of the House. I am sure that many will want to pursue the issues that he raised in many different places, not least the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). I want to correct the hon. Gentleman on just one word that he used. He referred inadvertently to the all-party parliamentary group “for” Islamophobia, but I think it is the all-party group “on” Islamophobia. Sometimes even prepositions are important.

I confess that motion 2 is on the Order Paper perhaps because several right hon. and hon. Members think that I got the matter wrong when I was a Minister. I see the Leader of the House winking at me now, possibly because he agrees that I got it wrong. I commend my right hon. Friend the Member for Rother Valley (Mr Barron) for his stewardship of the Standards and Privileges Committee. The hon. Member for Worthing West (Sir Peter Bottomley) said earlier how important it is that my right hon. Friend is not only a long-standing Member of the House but a long-standing member of that Committee, and that that is an important element in his work. For that matter, he was also the Chair of another Select Committee.

The answer that we have come up with in the motion is, I believe, the wrong answer. I do not intend to press it to a Division, but I believe that we have the wrong answer, and I shall explain why. There is no great problem with the rules as they are currently drafted. The Leader of the House and the Deputy Leader of the House disagree with me, as they did when I was a Minister, but I believe that they have presented the nature of the problem wrongly.

The Deputy Leader of the House was absolutely right about the entry of the hon. Member for East Dunbartonshire (Jo Swinson). There was no need for her to record the receipt of Girlguiding centenary merchandise, flower festival flowers and all the rest of it. Nor was it necessary for the Leader of the House himself to record that he was presented with a bottle of 2008 Beaujolais Villages valued at approximately £10—incidentally, it can be bought in most places in Rhondda for about £6.50—after he spoke at Bishop Wordsworth’s Church of England grammar school for boys for 45 minutes. If that was honestly the advice that hon. Members were given by the registrar, I think it was inappropriate advice.

A distinction should be made to identify clearly those cases in which a reasonable person would think that somebody was being given remuneration for providing a service, and in none of those cases would it seem to a reasonable person that somebody was being remunerated. I would use this rule: if I had not been given that bottle of wine, pen or whatever, would I still have made the speech? Would I still have opened the Girlguiding centre or whatever? The honest truth is yes, I would. It would not have made the blindest difference to me. That is the rule that a reasonable person would follow. I know the registrar, I have always followed her advice and I respect her enormously, but she might have used a legalistic understanding of the rules that would not in all honesty be followed by any of our constituents.

Let us imagine for the moment that the registrar is right and that all those cases should have been registered. Has it done any great harm that they have been registered? I do not believe it has done any harm to anybody. There is a greater sense of transparency, and I do not think that that is a problem. However, let us say for argument’s sake that we should not make a distinction between gifts and remuneration. There is an argument for that. It could be argued that any gift we receive for doing something—after speaking at a meal, for example—whether to the value of £400, £500 or whatever should be considered in exactly the same way. However, that is not the proposition before us this evening. The proposition is that a gift should be registered if it has a value in excess of 1% of salary, and that remuneration should be registered if it has a value in excess of one tenth of 1%. [Interruption.] I think that the Chairman of the Standards and Privileges Committee is disagreeing with me. If he wants to intervene, I am happy to give way—but he does not. I can see an argument for not making a distinction at all and for having exactly the same level for gifts and remuneration. However, I cannot see an argument for introducing a new concept at £65.

[Simon Hughes]

The hon. Gentleman might have just answered my point. To people reading and listening, talking in money terms is as relevant as percentages and tenths of percentages. Out there, people just want to know how much money we are getting or what the monetary value is.

[Chris Bryant]

That is another good point. To be honest, I think it makes more sense to have a fixed amount. The old rule used to be £125 for registration. At the moment, the limit is zero, but if the motion is passed tonight, it will move to something in the region of £65 or £66. I would prefer the number to be fixed, so that it is perfectly intelligible to every member of the public.

We all use a layer of common sense. I am chair of the all-party group on Russia. As hon. Members might know, I have adopted a very hawkish attitude towards the Russian Federation. I believe that there are many abuses in Russia and, as chair of the all-party group, I have tried to advance that argument. Now, I must confess that I was given a bottle of vodka by the Russian embassy at Christmas. I did not believe it to be a remuneration for the questions I had asked or the tenor of the debate I had conducted in the House, so I did not even bother to ask the registrar whether I should have registered that bottle of vodka. I have always been a bit suspicious about some gifts so, as it happens, I have not even opened that bottle of vodka, which is still sitting precisely where I put it when it arrived. I suspect that I will probably not get any more bottles of vodka from the Russian embassy.

If one pursued the Deputy Leader of the House’s logic, one could argue that if a Member is invited to dinner by an embassy and, somehow or other, they speak at that dinner—whether or not they are actually the speaker at the dinner—that is remuneration. However, I just do not think that that meets the common-sense test. I honestly believe that the proposition before us this evening is the wrong proposition. I can see an argument for perfect equality between gifts and remuneration, but I cannot see the argument for what is before us this evening.

Finally, on all-party groups, I agree with the hon. Member for Harlow in that when I became the chair of the all-party group on Russia, a large number of people suddenly started ringing me offering to work in the secretariat. I am sure that some did so with perfectly good intentions; I am also sure that some did so with not-so-pure intentions, because they wanted to grind an axe in relation to Britain’s attitude towards Russia. The more that all-party groups can assert some genuine independence, the better. That is why the hon. Gentleman is absolutely right that it is important to look at the process for providing an all-party group with a secretariat.

20:51

[Mr Robert Syms (Poole) (Con)]

If an example were needed of why we need these rule changes, it is that we are having a short debate today in which a number of Members have already disagreed about what the existing rules actually are. A de minimis level is sensible, because it takes one beyond what is arguable. Members of Parliament do not want to go to bed at night wondering whether they should or should not have declared something, whether it be a box of chocolates or a pencil sharpener. The fact that the level is £65 makes things fairly clear. It also removes some of the burden placed on the registrar and her staff, who are put under quite a lot of pressure by this House because of the rules that have had to be applied. Indeed, if we are not careful, we will fill the Register of Members’ Financial Interests with a lot of extraneous rubbish and people will not be able to see the wood for the trees. De minimis levels are therefore sensible. I hope that what the right hon. Member for Rother Valley (Mr Barron) has brought to the House today will be the first of a number of such thoughts on a number of issues that we have to clear up, because we have gone from having too liberal a position to making a rod for our own backs and creating difficulties for the registrar. I welcome this resolution and commend the Standards and Privileges Committee for bringing it to the House.

The issue of all-party groups is one that ought to receive a lot more scrutiny. We all know of examples of all-party groups that are run by particular organisations. Sometimes public affairs companies are employed by charities or other organisations to run a group. I am a member of a number of all-party groups, including some that I do not think I have ever joined, but which claim me. I think that we are all in the same situation. Sometimes people say, “You haven’t been to the all-party group meeting,” and I wonder which one it is, when I joined it and how I can get out. It is a little bit like joining the mafia, Mr Deputy Speaker: once you give a half-hearted “Well, possibly” to somebody, you get put on a list and you are there for evermore. If I sat down and honestly listed all the all-party groups of which I think I am a member and all those of which I actually am a member, I am perfectly sure that they would be very different lists.

One thought for the Chairman of the Committee is this. Having to put in writing the fact that we were going to join an all-party group might be one way of testing the numbers joining such organisations. Realistically, we know that Members put friends, colleagues, neighbours or anybody they can find in a weak moment on to all-party groups, but the attendance for some of them is very poor. What the motion says about declarations is perfectly right. They should be transparent. We should see who is behind all-party groups and their grand titles, but if we are going to take them seriously, we should have some way of registering the real interest of Members of Parliament. If, God forbid, we made it mandatory to publish which members of an all-party group had attended its meetings, nobody would join them, because none of us has any time to go to any of them. Whenever I get the all-party “Whip” and I read about all the all-party groups, I think that anybody who was a member of even half of them would not have time to do anything else if they went to all the meetings. So there has been some inflation in that area. Certain organisations use the authority of an all-party group to produce campaigns. My hon. Friend the Member for Harlow (Robert Halfon) made a serious point, and I hope that the Chair of the Committee will take that back. Perhaps an Adjournment debate would be a legitimate forum in which colleagues could pursue that issue.

We know that all-party groups have grown rapidly, and that they now exist for all body parts and all parts of the globe, as the Deputy Leader of the House said. There ought to be a much stronger test for an all-party group. We ought to be able to see who its members are, and the resolution before the House will mean that any provision of secretarial support, finance or back-up—whether in the form of champagne receptions or anything else—should find its way into the register so that we know what is going on. I welcome what has happened, and I hope that this is the start of a process whereby we can get some common sense back into the rules.

20:55

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I welcome this short debate, and I thank the right hon. Member for Rother Valley (Mr Barron) for his work and that of his Committee. I also thank the Leader of the House, who started the work on this subject earlier. I support both the motions. I made my first point during an intervention on the hon. Member for Rhondda (Chris Bryant). It was that, in due course, we might want to talk about payments in sums rather than percentages, for the sake of greater transparency. I am happy that we are starting where we are, however. The proposal will create a reasonable division between the more substantial gift and the single gift—the bottle of wine, the pair of socks—given as what the hon. Member for Warrington North (Helen Jones) described as a courteous thank you. I had visions of her making a kind of royal procession round Warrington with her arms full of flowers—all, I am sure, gratefully given and received. Also, we should not over-regulate. There is a balance to be struck, and we seem to be going in the right direction.

I want to make two further points, about all-party groups. The first follows the theme pursued by my hon. Friend the Member for Poole (Mr Syms). I, too, have always felt that there was a danger that these groups could proliferate. We can sign up 20 people relatively easily, but getting them to come to meetings is a wholly different ball game. Of course it is right that there should be an all-party group with an interest in Russia. It is a very important country for us to take an interest in, and elections are held to decide who the officers of that group will be. For example, I am a member of various all-party groups, and I have served as an officer in many of them. I am a member of the all-party parliamentary group on Ukraine, which is next to Russia. It is a very big, important country—the second largest European country—and we have a duty to take an interest in such a developing democracy. It is relevant not only to democratic issues but to energy issues and the like. There are all kinds of different all-party groups.

Secondly, on the subject raised by the hon. Memberfor Harlow (Robert Halfon), we have had an all-party group to deal with anti-Semitism for many years, and rightly so, because it is a plague and a scourge on our country. It is therefore unsurprising that there is now a newly formed group on Islamophobia. The hon. Member for Rhondda rightly pointed out that it is a group “on” Islamophobia, not a group “for” it. Islamophobia is also a scourge. The Prime Minister spoke about it only this weekend in his speech in Munich. Whatever we might think about the tenor and balance of that speech, this is a real issue in many of our constituencies. I see the shadow Leader of the House, the right hon. Member for Leeds Central (Hilary Benn), nodding. His city, as well as mine, has seen faith-based prejudices that are directed at other faiths, and there are other prejudices that we also need to counter.

All the proposals in the motion are reasonable.

“The contact details of the group’s registered contact”

should be made public, so that there can be an accountable person.

“Any relevant gainful occupation of staff to the group who hold a parliamentary pass”

should be publicised, so that if any pass holder is paid by someone else, we would know who they are.

“The source and extent of any financial benefit (e.g. donations) and the source and nature of any non-financial material benefit (e.g. provision of goods or services) received by the group from a single source outside Parliament”

above a certain amount will have to be publicised, so that people will know exactly where the servicing is funded from. That is absolutely right. The hon. Member for Rhondda made the perfectly good point that, because these groups have a certain status, and because they can use parliamentary logos such as the portcullis, there is an interest in being associated with them. The Chairman of the Committee also knows that very well.

Lastly, the website address should be publicised. The rules are much more explicit than in the past, so if a consultancy or a for-profit organisation is acting as the secretariat, we must know what the consultancy is and what it does—it must supply the information. Similarly, if it is a charity or a not-for-profit organisation, the rules are explicit that it

“must agree to make available on request a list citing any commercial company which has donated either as a single sum or cumulatively more than £5,000 in the course of the 12 months prior to the month in which the request is made”.

We will have a much better system: I do not think it will be perfect, but it will be much better.

Given your clear rulings earlier, Mr Deputy Speaker, I hope I have already made a helpful intervention to calm the House. A group has been set up—properly—on Islamophobia. In a meeting at which I was not present, a secretariat was appointed. I had agreed to be elected as an officer; other officers have now resigned. The secretariat has been a controversial issue and there are campaigns on both sides of the argument. My office has been in touch with that of my hon. Friend the Member for Harlow to ask for information to back up what he is saying, although I have not yet received it. I will be happy to receive it. There will be a meeting for all colleagues who wish to come. I have no prejudice in favour or against a particular organisation being the secretariat, and I now regard it as my duty to try to proceed carefully and with consensus, but I am not going to allow myself to be bullied into having or not having a particular organisation because it might have some views that are difficult for others to accept.

All parties are debating how to manage organisations that deal in these difficult areas of faith-based issues, which apply in your constituency, Mr Deputy Speaker, as in mine. Some people think we should go to meetings or events with people whose views we may disagree with or who might have more extreme views than we would normally tolerate. I have been to some such events. I attended a Global Peace and Unity event last year in order to speak on behalf of my party, and a Minister attended to speak on behalf of the Government. The co-chairman of the Conservative party was asked not to go, because it was not thought that a Conservative representative would be appropriate. These sort of debates will carry on.

We have to take advice and to act in the best interests of Parliament and the wider community. All I hope I can do is to assure those who take an interest in our proceedings that agreement to tonight’s motions will lead to better procedures. All-party groups will not lack controversy, just as our debates on the Floor of the House do not lack it. It is right that there is a place for controversial issues to be discussed, but I hope that they will be discussed on the basis of facts and an understanding of the severity of some of the issues dealt with by all-party groups. I hope that this debate has pointed people in the right direction. I hope that the last group I mentioned will know where it will go next—legitimately, properly and appropriately. More generally, I hope that people will understand that we have processes for these issues and that the processes are good ones.

Finally, my understanding, like that of many colleagues who have been involved with these matters, is that all pass holders are security checked for this House. Whatever their status, all staff and anybody who comes in must be checked, and not just by the House authorities, as the matter is then referred outside. That provides the protection. I assume that any colleague who has any worries about any pass holder in any organisation will follow the appropriate procedures, which are well known to Members. The inquiries must be made. Passes have been removed if people have held them inappropriately; and people have been prevented from being here if it is inappropriate for them to work here. We have to assume that the authorities continue to do a good job. We have not had problems regularly in the past. I trust the authorities to be vigilant; that is what we pay them to do. I think they serve us well in doing that.

21:03

[Sir Peter Bottomley (Worthing West) (Con)]

It is a pleasure to follow my hon. Friend the Member for Harlow (Robert Halfon), the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) and others. I am not certain that security vetting solves all problems. The number of people who have been assassinated by their own bodyguards suggests that there might be a weakness in that.

[Chris Bryant]

It is worth bearing it in mind that the person working as the secretary for the all-party parliamentary group on Russia, prior to my becoming the chairman, is supposedly being thrown out of the country by the Government, yet managed to get a security pass here.

[Sir Peter Bottomley]

I recall that about 25 years ago, the London representative of the Palestine Liberation Organisation was assassinated for being too moderate. Many people who take part in public affairs are at risk, which is one of the risks that an open society faces in peacetime just as it does at times of war.

Let me say to the right hon. Member for Rother Valley (Mr Barron) that, although I do not intend to try to divide the House on the first motion, I think it would be better to specify 0.2% or 0.3% of the parliamentary salary. A long time ago, when I was a Minister, I visited a country in south-east Asia and was presented with a tin bowl. I saw the same bowl in a shop priced at the equivalent of £130 in local currency, so I gave it to my private secretary. At the airport on my way home, I saw it again priced at £65, so I asked for it back. [Laughter.]

There will be boundary problems of that kind whatever limit is set, but my general view is that a limit of £130 or £180 would be better, and that it would be even better to make the limit the same as that applying to gifts presented to Ministers. As for the question of Members’ including on their websites gifts whose value was below the minimum, the registrar could advise us if we tried to include details that were not required according to the interpretation of the rules.

In view of your ruling, Mr Deputy Speaker, I shall not add to what has already been said about the motion on all-party groups. If it is possible for me to attend the meeting of the all-party group that has been mentioned, I will happily do so.

Let me, in passing, pay tribute to some people in my constituency. When I was involved with students from the Three Faiths Forum, I was delighted that the senior Jewish woman in my constituency was willing to meet us, as were representatives of the local Islamic society and mosque, the Salvation Army and the Worthing Churches Homeless Projects. It was immensely valuable that people were able to share that experience, and learn along with members of other faiths and people with different views. I also pay tribute to members of my local mosque, who have been pleased to attend the holocaust memorial event in Worthing. I hope that its organisers will at some stage focus on the massacre at Srebrenica. It should be borne in mind that the most recent modern massacre in Europe was a massacre of Muslims, both secular and otherwise, by people claiming membership of other religions.

I have no strong views on the issue of all-party groups, but there seems to have been a bit of “creep”. Paragraph 13(b) on page 5 of the “All-Party Groups” report by the Committee on Standards and Privileges, the eighth report of Session 2008-09, HC 920, states that in future such groups should have to

“register any commercial company with a direct interest in the work of the APG which contributes materially (say more than £5,000 or 5%, whichever is the lower) to meeting the central costs of the charity.”

According to the motion,

“The charity or not-for-profit organisation must agree to make available on request a list citing any commercial company which has donated either as a single sum or cumulatively more than £5,000”.

Perhaps the Minister who replies to the debate will tell us whether the movement from the requirement for a “direct interest” to no qualification was deliberate, and, if it was not, whether it could be considered when the resolutions are before the House.

Let us suppose that, for instance, the Army Benevolent Fund were to provide the secretariat for an issue-based all-party group. I am not saying that it should do so. Given that it has raised millions of pounds for our armed forces, I think that it would be going too far to have to list every commercial company that has given it money for that purpose, whether by gift aid or otherwise. At one stage I was chairman of the Church of England children’s society. A fair amount of money was donated to us by commercial companies for events and other purposes. I think that we might be putting a burden on some charities and not-for-profit causes if the resolution followed the motion—which will obviously be accepted—rather than the committee’s report.

Let me return briefly to the issue of earnings as opposed to gifts. For a number of years I have tried to avoid having any outside earnings. I failed in the current year, because I wrote an obituary for a friend and, rather to my surprise, received a cheque from the newspaper that kindly published it. I have given the money away, but it clearly constituted earnings, and I think that I am obliged to declare it. I believe that the sum was £300. A long time ago, between 1979 and 1984, I was personnel director of a fairly major commodities trading company. I should have been very prepared to declare the salary that I received for that.

On another occasion, I was an adviser to the International Fund for Animal Welfare. I gave it advice that it did not take and did not want, but its founder asked whether I would do more work for it, which I did, although it did not take any notice of what I said. That relationship came to an end in time.

What is clearly employment or something done for the purposes of an organisation for which one is paid should be declared, and what one is doing outside ought to be. However, I have a warning. Let us suppose that Peter Thurnham, who was a colleague at one stage in this House and who bought two machine tools when he was unemployed and set up an engineering business, entered the House of Commons when the business was on its feet. How would he calculate the time that he was putting into the business? That seems to be a very difficult thing to do. When James Callaghan was a farmer after being Prime Minister, how much time did he put into it? When Michael Foot was writing his biography of the founder of the health service, how much time did he put into it? If I, for example, had to put in the number of hours that I spent on the obituary, I would have to guess. It is obvious that we have to be prepared to put down rough and ready figures, which will not be easy.

The key point is to back a system where people will feel embarrassed if they know that they are doing something wrong, rather than having an enormous box-ticking exercise. I hope that when we ask the Committee on Standards and Privileges to review the matter and it conducts a consultation, more people will agree that 0.1% is too low and could be at least doubled or trebled without disadvantage to the House or to the interests of the public.

21:11

[Mr Kevin Barron]

The vast majority of hon. Members who have spoken agree that these motions should go through tonight and that we should alter the arrangements.

The hon. Member for Worthing West (Sir Peter Bottomley) raised the issue of the limit of 0.1% of a Member’s salary. We have tried to find a seer in public life to tell us what the approximate worth of a gift should be. Some local authorities have a level as low as £25, and some have no levels at all. It seems to us that £66—some people interpret the figure as £65—is about right. We will reconsider the matter, if we feel that it is not working in future.

On all-party groups, it would clearly be a matter for the House to consider the provision, if it is a burden on some all-party groups. The aim is to find out who is behind the secretariats of all-party groups and not necessarily their motivations, which is a point that has been raised tonight. We need the situation to be transparent if a commercial organisation is effectively funding all-party groups. I am not saying that that would necessarily be wrong—I am not sure whether the House would say that that is necessarily wrong—but it is right that we know exactly who the secretariat are and how they operate.

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) discussed duplication and overlap. I once considered setting up an all-party group on all-party groups to see how many members we could get to join. I chair all-party groups, which are an effective aid to legislation. This House should practise a wider democracy, and people with knowledge about individual issues come and talk to us on a regular basis—there is nothing wrong with that in my view. However, the situation needs to be transparent, so it is clear what has motivated them to do that and what is motivating us to make arguments on the Floor of the House.

The hon. Member for The Cotswolds (Geoffrey Clifton-Brown) raised the issue of pro bono advice to an all-party group rather than secretarial support. As my hon. Friend the Member for Warrington North (Helen Jones) said from the Front Bench, we need to consider that matter, but it should not take us away from making improvements tonight.

My hon. Friend the Member for Rhondda (Chris Bryant) said that any reasonable person knows the difference between a gift and remuneration, but, as Members of Parliament, we do not always deal with reasonable people. I have had 27 years in this place and on the odd occasion I have dealt with people who are not reasonable. [Interruption.] I was talking not only about people outside here, but some in here too. The Committee has said:

“A Member who chooses to treat as a gift the bottle of wine he or she receives after making a speech exposes him- or herself to an allegation that he or she has failed to register a payment received for a service provided.”

That is the reality of the situation. It might be that people have seen someone receive a bouquet of flowers, a declaration has not been made and nobody has made a complaint, but an unreasonable person might think that that is open to investigation and might write in, and that would start an investigation. We are trying to stop that happening and that is what we are going to do.

[Sir Peter Bottomley]

I am aware that I slightly bounced the right hon. Gentleman with my question about paragraph 13(b). If he is not able to say tonight whether the reference to

“a direct interest in the work of the APG”

was taken out deliberately, could he ask someone to let me know whether it was deliberate or whether it was just one of those things?

[Mr Barron]

I will make sure that the hon. Gentleman gets that information.

The Committee also said:

“The trivial nature of some of these payments and the disproportionate effort involved in recording and then registering them has called into question the utility of the rule. The February 2010 edition of the Register contained over 100 more pages than the June 2008 edition.”

The figures were 264 pages as opposed to 157. If what we have heard is correct, it is clear that the many hon. Members who have not registered bouquets of flowers, pots of honey and so on could eventually find that they are outwith the register. Given those circumstances, we need to address this area.

[Chris Bryant]

The main change was that previously we had to register remuneration in our capacity as a Member of Parliament and we did not have to register things all the way down. We have introduced much greater transparency, which has meant that we now know about earnings of hon. Members that have nothing to do with their membership of the House.

[Mr Barron]

I accept that, although I believe that my hon. Friend said that he saw no real difference between gifts and remuneration. It seems to me that if I make a speech to a company and am given a £500 gift, it is more likely that that is remuneration, it is declarable and should be declared in the Register of Members’ Financial Interests. As I said in my opening speech, this is a grey area and we are trying to make things as clear as we can. Both these motions will help the House and I hope that the House will support them.

Question put and agreed to.

Resolved,

That—

(1) this House agrees with the recommendations in the Tenth Report of the Committee on Standards and Privileges, on Registration of income from employment (HC 749);

and

(2) accordingly the resolution of the House of 30 April 2009 relating to the Registration of Members’ Financial Interests be amended, by leaving out paragraph (2) and inserting:—

“(2) That such a payment shall be registered

(a) where its value exceeds one tenth of 1 per cent. of the current Parliamentary salary; or

(b) where the total value of payments from the same person, organisation or company in a calendar year exceeds 1 per cent. of the current Parliamentary salary.”

All-party groups

Resolved,

That—

(1) this House agrees with the recommendations in the Eighth Report of the Committee on Standards and Privileges of Session 2008-09, on All-Party Groups (HC 920); and

(2) accordingly the resolution of the House of 17 December 1985, as amended on 10 March 1989 and 29 July 1998, be further amended by leaving out paragraph 3 and inserting:—

“3. Groups whose membership:

• is open to all Members of the House of Commons and House of Lords, and

• includes at least 20 Members (each of whom must be a Member of the House of Commons or House of Lords), comprising: at least 10 Members who are from the same political party as the Government, and at least 10 who are not from the Government’s party (of whom at least six must be from the main opposition party), and

• includes at least one officer who is a Member of the House of Commons be required to register the following information on the Register of All-Party Groups:

(a) The full title of the group. If persons other than Members of the Commons or Lords are allowed full membership (i.e. voting rights) the term ‘Associate Parliamentary Group’ must be included in the group’s title. If such persons are not allowed full membership the term ‘All-Party Parliamentary Group’ must be included instead. The rest of the group’s title should simply reflect the group’s subject so that the latter is obvious from its title alone.

(b) A brief summary of the group’s main purpose.

(c) The names of the group’s officers. At least one officer must be an MP; each of the other officers must be a Member of the House of Commons or House of Lords.

(d) The names of exactly 20 qualifying Members (each of whom must be a Member of the House of Commons or Lords), comprising: 10 Members who are from the same political party as the Government, and 10 who are not from the Government’s party (of which at least six must be from the main opposition party).

(e) The contact details of the group’s registered contact, who must be both an officer of the group and a Member of the House of Commons, and is the person ultimately responsible for the group’s compliance with the rules of the House.

(f) Any relevant gainful occupation of staff to the group who hold a parliamentary pass (relevant gainful occupation means any occupation that is advantaged by the privileged access afforded by the pass).

(g) The source and extent of any financial benefit (e.g. donations) and the source and nature of any non-financial material benefit (e.g. provision of goods or services) received by the group from a single source outside Parliament, if the value of the benefit equals or exceeds the financial threshold for registration (currently £1,500) in a calendar year. Once the group has made that initial registration, any further donation received from the same source in the same calendar year should be registered if its value exceeds £500.

(h) The website address of any organisation registered as the group’s secretariat.

(i) If a consultancy is registered as the group’s secretariat, the names and website of the consultancy plus the name of any client of theirs who is specifically paying the consultancy to act as the secretariat must also be registered. The consultancy must either publish on its website its full client list or agree to provide such a list on request, otherwise it is not allowed to act as the group’s secretariat.

(ii) If a charity or not-for-profit organisation is registered as the group’s secretariat, the former’s name and website must also be registered. The charity or not-for-profit organisation must agree to make available on request a list citing any commercial company which has donated either as a single sum or cumulatively more than £5,000 in the course of the 12 months prior to the month in which the request is made, otherwise it is not allowed to act as the group’s secretariat.

(i) The address of the group’s website, if it has its own website.

(j) The date of the group’s inaugural election of officers and of any Annual General Meeting held thereafter.

(k) Affiliation to the Inter-Parliamentary Union and Commonwealth Parliamentary Association, if the group is affiliated to either or both.”—(Mr Barron.)

Business without debate

Monday 7th February 2011 Commons Chamber

COMMUNITIES AND LOCAL GOVERNMENT

Ordered,

That Clive Efford be discharged from the Communities and Local Government Committee and Steve Rotheram be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Supermarket Acquisitions (Tyne and Wear)

Monday 7th February 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Angela Watkinson.)

21:18

[Mr David Anderson (Blaydon) (Lab)]

The title of this debate says that it is about supermarkets, but it is really about people. It is about the town of Birtley, where I live, which is in the south-east of my constituency. The town has a long history of being resilient and has dealt with hard knocks. Its situation is post-industrial, like many other towns in northern England, and it has gone through tough times with the loss of its brickworks and the running down of its chemical factory, and it is also a former coal mining area and there was a lot of engineering in the town. Birtley has kept strong and has developed. The town has a lot of high-tech engineering; a big car sales place; three separate bodies selling caravans and motor homes; an aluminium processing factory; and a cable factory. The key to the town is the shopping area, which is on what was the old great north road—the old A1.

That shopping area has developed over many years since there was a huge Co-operative store there. After that store ceased operating long ago, its role was taken over by two supermarkets—a medium-sized one and a smaller one—the ownership of which changed over the years. Until two years ago, the medium-sized one was operated by Somerfield and the smaller one was operated by a company called Netto, which has a number of supermarkets across the north of England and has about 1% of the supermarket share in this country. Between them they helped to support a huge array of small retail businesses—one-man, two-man and three-man businesses such as hairdressers, greengrocers, butchers, bakers, newsagents, pharmacies, opticians, a shop selling cards and pictures, a post office, a number of banks, a launderette, a huge array of fast-food outlets, coffee shops, travel agents, estate agents, florists, a pet shop, a carpet store, a general dealer and public houses. If I have missed any of the businesses there, I apologise to the good people of Birtley. The key point is that all those operations were quite small and that what really drew people to Birtley was the supermarkets, particularly the one run by Somerfield.

Two years ago, we got the news that Somerfield was going to be taken over by Co-op and we thought that that was good news, but then we heard, sadly, that our store was not going to be taken over by Co-op. In these situations, the Office of Fair Trading usually has a role to play in ensuring that a huge takeover by a big group does not allow the creation of a monopoly. The Somerfield store in Birtley was not identified by the OFT as being one that Co-op had to get rid of. However, Co-op did have to get rid of 25 stores and it decided, in its wisdom, to divest itself of 38 stores. I found this hard to believe, but it put them up for sale as a package, telling potential buyers that they must buy all 38 or none.

When we in Birtley heard that Morrisons was buying the 38 stores, we were quite pleased because it has a good reputation in the north-east as a successful operator with good-quality stores that have a lot of fresh food and a good deal of business. So we thought it would be really good for the area—until 27 April, two years ago, when Morrisons took over. On that same day, it announced that the Birtley store was not going to open and the staff in the store were moved to other stores in the Morrisons network. It did that because—I found this hard to grasp—it had bought the store as part of the package of 38 without actually seeing it. However, it had run the store 20 years previously. Further down the line, I met the manager who made the final decision and he told me that he had been the manager of that same store 20 years before and that hardly any money had been spent on its infrastructure, so it was little wonder that it needed major refurbishment.

The people of Birtley went from being very happy that a good-quality supermarket was coming in, which could only be good for the town centre, to the current situation in which that building has stood empty for two years, deteriorating and sticking out like a sore thumb on the middle of our main street. The really sad part of what has happened is the impact on local businesses. Many people have had to stop doing all their shopping in Birtley because the town cannot support that kind of shopping any more. People used to go to Somerfield for 70-80% of what they wanted and then use the hairdressers, post office and other stores. Everybody was making a living then, but Somerfield’s closure had a negative impact on the town. Many businesses closed, many people moved out of town, and those who stayed have been hit hard. Netto upped its game. I give credit to the people working there—they have done really well in filling the gap, but the Netto offer is not what Somerfield was or what, sadly, Morrisons could have been.

About 12 months ago we had some good news. Asda, which is one of the biggest stores in the country, was going to buy the Netto chain. We thought that was tremendous because, even though we still had the Somerfield store standing empty, we believed that Asda could come into Birtley, give us a real lift and recreate some of the business that had gone when Somerfield went. That would lift the town up again, business would come back, and more people would come and shop in Birtley. We saw Asda as a premier league team. I mean no disrespect to Netto, but if Netto was a football team, it certainly would not be in the premier league, despite the great work that it has done.

We found out late last month that the Office of Fair Trading, in its wisdom, had decided yet again that Asda would not be allowed to take over the number of stores that it wanted to take over, in the same way as the OFT had decided previously that the Co-op would not be allowed to do that. The issue for me, and the reason that I am holding the debate tonight, is that that decision was made public on 29 September last year. It was announced in an internal press release, which was only brought to my notice through the local council some three weeks ago.

There are many people who could have been informed. I will discuss with the Minister later how we can improve this so that people learn from the mistakes that were made. We have a very positive community partnership in Birtley, which is run by some great people, such as Dean and Jean Cox and Peter Cowie. We have committed local councillors and an enormous number of businesses looking every day at what is going to happen in the town. We have a strong economic development team in Gateshead council, who have worked night and day to try to make sure that Birtley can survive and improve. The team did tremendous work with Morrisons to try to improve the offer on a site that had not yet been developed. The chief executives of the council had a hands-on approach to what was going on in Birtley.

I would have been massively interested if, four months ago, I had been made aware of what was going on. If any of the people who have collared me in the past three weeks had known about that four months ago, they would have come and said to me, “David, what’s happening?” and none more so than my wife. She shops in Birtley all the time. She does not drive so she has to get a bus 3 miles to another town, then come back and wait for the groceries to be delivered. That is not an effective way of doing business. People like her need shops on the doorstep that work for the community.

As I said, we got a copy of the press release last week and contacted the OFT. I have read the press release and the information that has been sent since. It seems to me that the OFT runs a system based on those in the know telling other people in the know about the business that they know. They decide on closures by projecting the cost of a box of cornflakes in two shops a few miles apart. If a store 2 miles away is going to sell 1,000 boxes of cornflakes a week at 10p less than the store where we live, the nearer one will have to close.

The OFT and the businesses concerned fail to connect the dots between the real life of people on the ground, who are directly affected by such decisions—older people, people without transport, people who are less able to travel, those with disabilities, those who like the security of their own place. I have a good old friend who was severely affected when the supermarket that she went to every day of her life was, in effect, taken away. She became seriously unwell and disoriented by what was going on. She was not eating properly and went through some real problems, which thankfully have now been resolved.

When I found out about the OFT decision, around 28 January, my office made contact with the OFT, which sent me a number of documents about the process. I shall refer to them now and try to speak a little more slowly, for the sake of Hansard. In a letter dated 20 January, Timothy Geer, who was the officer in charge at the OFT, wrote:

“In September 2010 the Office for Fair Trading (OFT) announced that it was minded to refer the acquisition by ASDA stores Limited… to the Competition Commission… unless Asda gave suitable undertakings to address our competition concerns. While the OFT concluded that the acquisition would not give rise to competition concerns at a national level, we were concerned that competition could be substantially reduced in around one in four of the local areas where there are overlapping stores.”

To me, that means that the OFT realised back in September that there was a problem, not at a national level, but in certain areas. It should have flagged up that situation so that it could be addressed.

The OFT’s letter goes on to explain the methodology used to reach that decision. I will read the paragraph about what it did before deciding whether to go ahead with the transfer:

“The local areas in which the OFT found cause for concern were identified following the application of two tests. First, we applied a fascia counting test. If the merger reduced the number of relevant supermarket operators (by fascia) to three or fewer in the local area, the area moved to the next stage of testing. This next stage comprised Asda hiring a professional market research firm to undertake consumer surveys at the relevant Netto and Asda stores in order to gauge how close local rivalry was between them.”

I have spoken with many people at the Netto store in Birtley and no one, not the manager or the staff, are aware of any survey being done at that store, which is what the OFT’s letter mentions. It continues:

“The OFT then coupled this information with profit margin data and used an analytical method called the ‘illustrative price rise’ to identify those areas in which a realistic prospect of a substantial lessening of competition arose. More information on these methods can be found in Annexe A of our report.”

I read Annexe A, and I only wish that our good colleague Sir Patrick Cormack, the former Member for South Staffordshire, were here today, because he would have a wonderful time with the paragraphs that I am going to read out. The OFT has what it calls a stage 1 filter for deciding whether the process should go ahead. Paragraph A.4 of annexe A states:

“To identify overlaps, the filter used a ‘maximum reach’ isochrone”—

I do not have a dictionary to find out what an isochrone is, but perhaps the Minister knows.

“The ‘maximum reach’ isochrones, centred on the Netto stores, were based on that used in CGL/Somerfield ”.

Therefore, in the process that happened two years earlier in Birtley, the OFT had used the same process, so again I make the point that it ought to have been aware of the impact on us. The annexe states that those isochrones

“offered a conservative approach to capturing overlaps between the parties (and bearing in mind the asymmetric constraints imposed of each other by the merger parties)… A local area was deemed to be unlikely to present competition concerns if at least three other (non-merging) fascia were present in the primary isochrone. What is more, an asymmetric constraints approach was adopted.”

I hope that the Minister is keeping up with this. Paragraph A.9 states:

“In addition to the primary isochrone filtering (centred on the Netto stores), the stage one filtering exercise also replicated the primary isochrone filtering but re-centred on census output areas where Asda measured whether 10 per cent or more of the local population would see a reduction in fascias as a result of the proposed merger. Census output areas allow for the stage 1 analysis to be carried out at as fine a level of detail as practicable.”

I think that that is a pretty fine example I have given. I could go on, but I will not, because there is just more and more gobbledegook.

As I read that, I was reminded of another thing related to Birtley. One of the things the town takes great pride in is being a centre for English folk music. There is a folk club in the town that was pulled together back in the late ’50s and early ’60s by a man called Jack Elliot, and anyone who knows anything about English folk music will have heard of the Elliots of Birtley. That tradition continues today, personified by his daughter, Doreen Henderson, who every Wednesday night in the Birtley Catholic club still hosts the folk club, where everyone is welcome. You would be more than welcome, Mr Speaker—I know that you can do a song or two—and the Minister would be welcome too. One of the people who came through that same culture was a gentleman called Alex Glasgow, who sang a song in the 1970s called “Standing at the Door”. These are the words that came to my mind when I read those paragraphs that I have just related: “Nowadays we have a craze, to follow clever Keynesian ways, while computers measure economic growth, we’ve got experts running round, writing theories on the pound, caring little whether we can buy a loaf.” That says it all: people at a high level are discussing issues about computer modelling and facts and figures without any real cognisance of what is happening on the ground. That would be bad enough if we had not been hit two years ago with something that really tore the heart out of our town, and we are determined not to let that be repeated over the next few months.

The OFT made a decision last September, but it should have been much more up-front and proactive with people on the ground. We believe that the conclusion was flawed, because the relationship between the ASDA store, which would have been in Birtley, and the one that the OFT compared it with, which is about 3 miles away in Washington, bears no resemblance to fact. The one in Washington is a huge superstore; the one in Birtley would have been very small—effectively like a Tesco Extra, which Members might be aware of.

The OFT has not given any consideration to the viability of Birtley as a community, particularly given the underlying problems of Morrisons’ decision two years ago not to acquire and open a store on the Somerfield site. The procedure that was supposed to protect the public and consumer interest has done exactly the opposite.

I have a number of requests that I hope the Minister can respond to positively. I know that there might be limits to what he is allowed to do with the OFT, but will he, if at all possible, ask it to review the decision and go and do a real survey on the ground? I am more than happy to make myself available, and I am sure that local people, business people, the community partnership, the council leadership, the office of the council and local councillors will be there to help the OFT see the error of its ways, but it is massively important to confirm that, whatever happens, that store on the Netto site will remain open. Perhaps it will not do so under ASDA or Netto ownership, but if the store is allowed to close, it will really put those other businesses, which are struggling now, in real jeopardy.

Going forward, can I suggest that the Minister sits down with his colleagues in the OFT and asks them to re-evaluate how they do their work? This is a real-life situation where, if there had been a dialogue, we might have come to a different conclusion. If nothing else, they should have spoken to people much earlier, because, if we had not been made aware of the consultation in time, we would not have been able to respond to it. The consultation closed on 2 February; we did not find out about the decision until around about 18 or 19 January. If we had been able to get involved earlier, we might have had a different situation, and many people, who had many sleepless nights, might have been much more reassured.

I am particularly proud to have this debate this week, because a year ago this week a very close friend of mine, Ian Caddy, was given the MBE by the Queen. Ian was the man who drove the community partnership in Birtley, and on 12 February last year I was proud to be with him at Buckingham palace, when he was awarded that medal. He walked up to Her Majesty and stood there, ramrod straight like the serviceman he was, and she gave him that medal. He actually invited her to Birtley to see the community partnership; we did not invite her to the folk club, but she is more than welcome as well.

I say this, because three weeks later Ian Caddy died of cancer. He knew he was dying, and he was there that day not as Ian Caddy MBE, but as Ian Caddy the people’s representative at the court of Queen Elizabeth. In his memory, I hope we can resolve the matter tonight and help the people of Birtley to get on with their lives.

21:39

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

Let me begin by congratulating the hon. Member for Blaydon (Mr Anderson) on securing the debate. I am replying on behalf of the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), who sadly is unable to attend.

The hon. Gentleman rightly set out his concerns about the way in which competition policy set at a national level can have a genuine impact on local high streets and their communities. His concerns and those of his constituents have been heightened by the fact that not just one store but two are involved in this problem. Birtley had already lost its local Somerfield store, which closed back in the spring of 2009 following, as he said, the acquisition by Morrisons. I gather that recently there have been more positive discussions about that site, and I will turn to that in a moment. Nevertheless, I entirely understand that local people and local small businesses will have felt that their town is suffering. He described that very well and put across his constituents’ concerns accurately and vigorously.

Open competition is good for the economy and for consumers. At the same time, however, arms of government, at whatever level, have a responsibility to take careful note of the effects of their policies, and how they consult, on local communities. It is not just a question of a simple national identity. The hon. Gentleman accurately parodied some of the nonsense that occurs in some official documents, which does not relate to most people’s real-world existence. I certainly understand that the loss of a local supermarket greatly affects a local town and community. Clearly, it will mean that that community attracts fewer customers, and that is bad for the small shops and for the other traders. It can also be a problem, as the hon. Gentleman accurately described, for older people who do not have their own form of transport. For them it means that they have to travel further just to get the basics, and the costs rise on each occasion.

To establish the facts in this instance, my officials have been in direct contact with the Office of Fair Trading. The OFT’s role is to examine and adjudicate on mergers to ensure that they do not substantially reduce competition, which would harm the ability of consumers to shop around. That is an important role. It, together with the Competition Commission, which investigates mergers that have prompted concern, is of course fully independent. I should emphasise that Ministers can play no role in this whatsoever and have no powers to make any decision where a live case is in hand. That is probably right, because otherwise there is a danger that decisions will not be based on the evidence or will not necessarily be perceived as being free from political interference.

On this particular case, Asda announced in 2010 that it had struck a deal to acquire 194 Netto stores in this country. The OFT then acted on its legal duty to investigate the proposed merger. In September 2010, as the hon. Gentleman pointed out, the OFT announced its findings—that in 47 areas, Netto was the main competition to Asda and that in those areas consumers’ interests would be harmed by the proposed merger. As a result of that, the OFT has a legal duty to refer the merger to the Competition Commission for a full six-month investigation unless a solution can be found. But in this case, Asda has offered to sell the Netto stores in those 47 areas, including the one in Birtley. It is true that Asda does not need to have found a buyer before the OFT will accept that undertaking, but—this is in direct answer to one of the points that the hon. Gentleman raised—it is legally obliged to keep the Netto store open until a purchaser is found. Any purchaser must also convince the OFT that it will operate a grocery retail shop capable of mounting local competition, and Asda must ensure that it makes real efforts to ensure that workers will keep their jobs afterwards. Those matters relate to the substance of the issue with regard to the OFT and Asda. I hope that that provides the hon. Gentleman and his constituents with some reassurance.

The hon. Gentleman rightly went on to question how the consultation process really worked. The OFT has advised me that it did indeed commission a research company to survey about 12,000 Asda and Netto shoppers throughout the UK, and it tells me that that included Birtley. However, the House will have noted, you will have noted, Mr Speaker, and I have noted that that is not the experience of the hon. Gentleman. I trust that the OFT will have noted that that is his view. When we get into some of the complex language and processes that often deter people from being able to get involved in these surveys, it is important that officials, at whatever level, understand the need to check not only that they have followed due process but that they have thought carefully about whether what they are doing has been explained carefully to the people they are affecting. I trust that that will be made clear to the officials involved.

[Mr Anderson]

I was in no way having a go at the OFT, but this matter is of serious importance in Birtley. People in Birtley may well have been surveyed, but what information were they given when that happened? Things would have been different had they been told that the store might not reopen. That is the key issue. That is why I said that perhaps we could discuss whether there is a different way of doing things that is in everybody’s interests.

[Mr Prisk]

Absolutely; that leads to the point that I was about to come to. I understand that the OFT is now talking to the hon. Gentleman, which is good. However, he is right to say that we should always be prepared to listen and learn on these issues. That is why I am pleased to tell him and the House that the Government are preparing to look carefully and consult broadly and thoroughly to improve the efficiency of the regime and the robustness of the decision making. I hope that the hon. Gentleman will ensure that his views are known, and I am sure that he will. This instance is a good one, from which all of us can listen and learn.

I will briefly record Morrisons’ acquisition of 38 stores from the Co-operative Group in 2009, which included Somerfield stores such as the one in Birtley. Based on the representations I have received from Morrisons, I understand that the company took ownership of the site in April 2009. As the hon. Gentleman pointed out, it undertook a review after the purchase of the store’s commercial potential. Three months later, Morrisons concluded that the store was not viable as a Morrisons-branded outlet. Instead, it decided to seek a purchaser or tenant for the store, and it was marketed for sale or to let in July 2009.

In August 2010, with the property still on the market, Morrisons reached an agreement with Gateshead council to market the store jointly with the council’s land to the rear of the site as a combined development opportunity. In October 2010, the joint site was advertised in the press. I believe that it is still being marketed, either for sale or to let. Encouragingly, I understand that that has recently led to a number of offers, including from other food retailers. Morrisons and Gateshead council are now considering the feasibility of those bids. The company has reasserted its commitment to work not only with the council, but with the hon. Gentleman to find a viable solution. I hope that that progresses well and that it will be felt that the town centre has a more positive future than has been the case over the past 18 months.

We all recognise that there have to be strong rules over free and fair competition. That is the role of the OFT and the Competition Commission. However, as this debate has shown, central Government agencies must have clear regard to the impact that that policy has on local high streets and local people. The hon. Gentleman has rightly raised the concerns of his constituents about the effect on Birtley. I restate that Asda is legally obliged to keep the Netto store open until a buyer is found, and that purchaser must convince the OFT that it will operate a grocery outlet capable of competing with neighbouring stores. Although I appreciate that the situation is far from perfect, I hope that those two statements from the OFT will give some comfort to the hon. Gentleman and his constituents, whom he has so ably represented this evening.

Question put and agreed to.

21:48

House adjourned.

Written Ministerial Statements

Monday 7th February 2011 Written Statements

Monday 7 February 2011

Barlow Clowes International

Monday 7th February 2011 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The Barlow Clowes group of companies collapsed in 1988, following the misappropriation of investors’ funds, which had been routed through approximately 50 related companies and entities in 16 jurisdictions. In the same year the Le Quesne report was published on regulatory functions in this matter. In 1989, the Parliamentary Commissioner for Administration published the report “The Barlow Clowes Affair”, which criticised the Department of Trade and Industry for maladministration in the handling of Barlow Clowes.

The Government disputed the main findings in the report but made a decision to make substantial ex gratia payments to Barlow Clowes investors. This was based on an exceptional combination of circumstances and was not to be regarded a precedent. At the same time the Government gave a clear assurance to Parliament to try and recover the cost of the ex gratia payments. The Government subsequently paid £153 million in ex gratia payments to 14,250 investors who suffered a loss as a result of the collapse of the Barlow Clowes group.

Since 1988, successive Governments have followed a policy of vigorously pursuing all claims in relation to the Barlow Clowes companies which showed any prospect of cost-effective recovery, in order to reduce the cost to the taxpayer of the ex gratia payments scheme.

The court-appointed receivers and liquidators to the Barlow Clowes companies have now concluded the last outstanding litigation in this case and will take no further action.

On 9 December 2010 the Supreme Court of Gibraltar granted the release of the receivers and liquidators of the various offshore portfolios previously promoted by Barlow Clowes International Limited, with effect from 6 January 2011. This brings to an end the Barlow Clowes affair.

As at 19 January 2011, from the recovery of assets and proceeds of legal action, the Government have recovered £120 million and £36 million was recovered and paid to investors. In total the investors, including the Government under their assigned rights, have been repaid £156.5 million, net of all costs.

Local Government Finance

Monday 7th February 2011 Written Statements

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

Further to my statement on Monday 31 January on the local government finance settlement, I am announcing that I will be making a technical change to the provisional formula grant allocations for 2012-13 increasing the overall total for formula grant by £11.3 million.

I have today placed in the Library of the House revised tables which reflect this change. Copies are available from the Vote Office and should be referred to in place of those issued on Monday 31 January which related to the 2012-13 settlement. All local authorities have been notified directly today of this change.

Plutonium Stocks

Monday 7th February 2011 Written Statements

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The Department of Energy and Climate Change (DECC) will publish on 7 February a consultation on the long-term management of UK-owned separated civil plutonium.

Currently the UK’s plutonium is stored in facilities designed to meet high standards of safety and security, however there is a need to consider how it should be managed in the long term. This consultation sets out for public scrutiny Government’s preliminary view on the long-term management of the UK’s plutonium. In particular the consultation covers the security and proliferation sensitivities associated with continued storage of plutonium, and also how we can best manage it in the interests of future generations.

Copies of the consultation have been placed in Libraries of both Houses or can be obtained from the DECC website.

http://www.decc.gov.uk/en/content/cms/consultations/open/open.aspx

Feed-in Tariffs

Monday 7th February 2011 Written Statements

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I am today announcing the start of the first review of the feed-in tariffs (FITs) scheme for small-scale low-carbon electricity generation.

Decentralised renewables are vital to green growth and the FITs scheme has proved highly successful at stimulating growth, driving innovation, creating jobs and cutting carbon.

Since the scheme began last year more than 21,000 installations have registered to date. The vast majority of these are domestic installations, including solar panels, wind turbines and micro-hydro installations. The scheme is working well. The take-up of solar photovoltaic (PV) panels under FITs has been a success with 20,000 installations now registered. However there is room for improvement. I am concerned about the impact of super-size solar installations. I am also disappointed at the lack of farm-based anaerobic digestion plants currently accessing FITs.

In light of the economic and fiscal situation, inherited by the coalition, it is imperative that we take a more responsible and efficient approach to public subsidy, including where this subsidy is funded through energy bills. Specifically, the spending review committed to improving the efficiency of FITs and finding £40 million of savings, around 10%, in 2014-15.

Since the spending review, I have become increasingly concerned about the prospect of large-scale solar PV projects under FITs, which was not fully anticipated in the original scheme and could, if left unchecked, take a disproportionate amount of available funding or even break the cap on total funding. Several large solar installations have already received planning permission. Industry projections indicate there could be many more in the planning system. In light of this uncertainty, and the risk that such schemes could push FITs uptake off trajectory and may make the spending review savings difficult, I have decided to end the potential for damaging speculation and bring forward the review of the scheme to look at ways of correcting these early teething problems.

I recognise that industry needs a long-term plan for investment in which it can have full confidence. Today I am announcing a comprehensive evidence-based review of the FITS scheme and, to provide further certainty to the renewables industry, I can confirm that we also hope to publish next month measures to support renewable heat within the envelope agreed at spending review.

The FITs review will:

Assess all aspects of the scheme including tariff levels, administration and eligibility of technologies;

Be completed by the end of the year, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency);

Fast-track consideration of large-scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and parliamentary scrutiny as required by the Energy Act 2008.

Alongside the fast-track review of large-scale solar PV, we will also undertake a short study into the take-up of FITs for farm-based anaerobic digestion plants. Only two such projects have been accredited so far and by this point at least six were expected. We are looking again at the tariff rates inherited from the previous Administration to see if they are enough to make farm-based anaerobic digestion worthwhile.

Broad terms of reference for the review are available from www.decc.gov.uk/FITS and we are seeking views on specific issues to be considered. The Government will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FITs scheme. Installations which are already accredited for FITs at the time will not be affected.

Antisocial Behaviour

Monday 7th February 2011 Written Statements

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

Today I am launching, “More effective responses to anti-social behaviour”, which sets out the key findings of the Home Office’s review of the current tools and powers to deal with antisocial behaviour, as well as proposals to simplify and improve them.

Reducing the everyday crime and disorder that is described as antisocial behaviour—from vandalism and graffiti to drug dealing and harassment—is a high priority for the public, and for the Government. It is corrosive, blights communities and neighbourhoods and has a huge impact on the quality of life of millions of people. The unprecedented response by the public to the launch of street-level crime information earlier this month illustrates just how concerned they are about the issue.

Our aim is to ensure that where a community or victim is suffering antisocial behaviour—particularly the sort of targeted, persistent harassment apparent in a number of high-profile recent cases—the police and other local agencies take the problem seriously, take the necessary steps to stop it permanently, and protect vulnerable victims.

Our reforms to local crime and policing will take us some way towards meeting that objective. The introduction of elected police and crime commissioners, street-level crime information and regular neighbourhood beat meetings will make police forces more accountable for the way they deal with the issues that matter to local people. Helen Newlove is highlighting ways the public can get involved in making their communities safer. And we announced earlier in January that eight police forces are, with local partners, trialling a new approach to handling calls from the public that will ensure repeat and vulnerable victims of antisocial behaviour get a better service.

However, the police and other professionals also need an effective toolkit to deal with antisocial behaviour; one that is quick, practical, easy to use and provides a real deterrent to perpetrators.

Our review of the current tools and powers found that there are too many of them, with practitioners tending to focus on the measures they are most familiar with. And the bureaucracy and cost associated with some of the court orders (especially the antisocial behaviour order) may encourage some practitioners to use informal or voluntary tools to deal with serious incidents instead. At the same time, the growing number of people who breach their ASBO suggests the potentially serious consequences are still not deterring a persistent minority from continued antisocial behaviour. Finally, the tools that were designed to help perpetrators deal with the underlying causes of their antisocial behaviour are rarely used.

In response we propose a radical streamlining. Instead of providing a specific tool to deal with every problem, we aim to introduce a handful of faster, more flexible and more effective tools that allow practitioners to protect victims and communities and get to the root of the problem. Specifically, we propose to:

repeal the ASBO and other court orders for antisocial individuals, and replace them with two new orders that bring together restrictions on future behaviour and support to address underlying problems—a criminal behaviour order that can be attached to a criminal conviction, and a crime prevention injunction that can quickly stop antisocial behaviour before it escalates;

ensure there are powerful incentives on perpetrators to stop behaving antisocially—for example, by making breach of the new orders grounds for eviction from social housing;

bring together many of the existing tools for dealing with place-specific antisocial behaviour, from persistent litter or noisy neighbours, to street drinking and crack houses, into a community protection order;

bring together existing police dispersal powers into a single police power to direct people away from an area for antisocial behaviour;

make the informal and out-of-court tools for dealing with antisocial behaviour more rehabilitative and restorative; and

introduce a community trigger that gives victims and communities the right to require agencies to deal with persistent antisocial behaviour.

Copies of the consultation document will be placed in the House Library. The consultation, which runs until 3 May, is open to everyone to have their say and details can be found on the Home Office website at www.homeoffice.gov.uk/asb-consultation.

Abdelbaset al-Megrahi

Monday 7th February 2011 Written Statements

[The Prime Minister (Mr David Cameron)]

On 20 July 2010 I asked the Cabinet Secretary to conduct a review of Government papers relating to the release of the Lockerbie bomber. The purpose of this review was to ensure that all paperwork that could be published was published in order to address as fully as possible the continued concerns that were being expressed over this release, including from victims’ families.

The Cabinet Secretary has completed that review. I have placed his report and the further papers that are being released in the Libraries of both Houses.

The review assessed all material across Government. The Cabinet Secretary was assisted in this task by the former Information Commissioner and current Chairman of the Administrative Justice and Tribunals Council, Richard Thomas. He has provided independent validation of this process and confirms the report and the documents now being published are consistent with all the materials he has reviewed and provide a fair and accurate account of events.

Under the convention covering papers of a previous administration, the Cabinet Secretary consulted former Ministers and the former Prime Minister about publication of additional papers.

All decisions on the declassification and publication of papers belonging to the previous Administration were taken by the Cabinet Secretary. He is clear that any information not published does not alter or contradict his report in any way.

Grand Committee

Monday 7th February 2011 Grand Committee

Monday, 7 February 2011.

Arrangement of Business

Monday 7th February 2011 Grand Committee

Announcement

15:30

[The Deputy Chairman of Committees (Lord Faulkner of Worcester)]

My Lords, before the Minister moves that the first order be considered, I remind noble Lords that in the case of each statutory instrument the Motion before the Committee will be that the Committee do consider the instrument in question. I should perhaps make it clear that the Motions to approve the instruments will be moved in the Chamber in the usual way. If there is a Division in the House, the Committee will adjourn for 10 minutes.

European Union (Definition of Treaties) (Stabilisation and Association Agreement) (Republic of Serbia) Order 2011

Monday 7th February 2011 Grand Committee

Considered in Grand Committee

15:30

Moved By

[Lord Wallace of Saltaire]

That the Grand Committee do report to the House that it has considered the European Union (Definition of Treaties) (Stabilisation and Association Agreement) (Republic of Serbia) Order 2011.

Relevant documents: 13th Report from the Joint Committee on Statutory Instruments.

[Lord Wallace of Saltaire]

My Lords, the stabilisation and association agreement is a mechanism that has developed to cope with the many problems of the states in the former Yugoslavia. The international agreement between Serbia and the European Communities and its member states was signed on 29 April 2008. The treaty has not yet entered into force but will do so once Serbia, the EU and all 27 member states have approved it in accordance with their own procedures. Fourteen EU member states have ratified the SAA so far, as well as Serbia, which ratified on 9 September 2008. With regard to the EU ratification, the European Parliament gave its consent on 19 January this year and a further unanimous Council decision will be required in order for the EU to conclude the SAA. The order is a necessary step towards the UK’s ratification of the SAA as it will provide for implementation of the SAA as an EU treaty.

The principal effect of the draft order is: first, to ensure that the powers under Section 2 of the European Communities Act 1972 will be available to give legal effect to any necessary provisions of the agreement; and, secondly, to permit any expenditure arising from the SAA to be charged on and issued out of the Consolidated Fund.

Enlargement has been one of the European Union’s biggest success stories, enabling stability, security and prosperity across our continent. The prospect of EU membership was an important factor in supporting the peaceful transition to democracies in Greece, Spain, Portugal and central and eastern Europe. It is a vital tool in helping us to spread our values and freedoms. A larger EU promotes business and our economy by providing access to a bigger market with reduced trade barriers.

However, enlargement must be based upon conditionality. A country may join the EU only once it has met all the criteria for membership and has undertaken the necessary reforms to do so. That applies to Serbia and all western Balkans countries, as it does elsewhere. Serbia must adapt to the required EU conditions, not the other way round.

The implementation of the SAA is an important step in the fulfilment of that conditionality. The SAA recognises Serbia as a “potential candidate” for the EU. It is not a reward; instead it is an instrument to enable Serbia to move forwards. It sets out key objective political and economic criteria which Serbia must meet. That progress towards eventual EU membership is regularly monitored via a closer partnership with the EU, under the EU’s stabilisation and association process. A track record of SAA implementation is one of the requirements for Serbia to move further towards achieving full candidate status.

Full, effective, and transparent implementation of democracy and the rule of law is an example of the criteria that Serbia will have to meet as an essential condition of the SAA, and for eventual EU membership. Others include good co-operation on regional issues with its neighbours and international obligations, conformity with common human rights law including the protection of minorities, and full co-operation with the International Criminal Tribunal for the former Yugoslavia—the ICTY. I underline that last point. Serbia’s interim agreement and SAA were signed by EU member states at the General Affairs and External Relations Council on 29 April 2008. However, a decision was taken at the same time to block the implementation of the interim agreement and the ratification procedures of the SAA pending member states’ assessment that Serbia was fully co-operating with the ICTY.

Following successive positive reports from the ICTY’s Chief Prosecutor Brammertz, member states agreed to proceed with SAA ratification at the European Council in June 2010. The UK’s assessment is that Serbia is still continuing to co-operate fully with the ICTY, as confirmed by Chief Prosecutor Brammertz’s latest report in December last year. We are therefore content that the UK should proceed with ratification.

Since the conflicts of the 1990s, Serbia has made significant progress, particularly in establishing good relations with its neighbours. This needs to continue. The draw of European integration will continue to be a crucial factor in motivating and enabling Serbian political leaders to continue to agree and implement the necessary reforms and to continue with the process of reconciliation with the rest of the region. The European Union without the western Balkans would for ever have a disillusioned and disenchanted hole near its centre.

I am satisfied that the order is compatible with the rights contained in the European Convention on Human Rights. I beg to move.

[Baroness Symons of Vernham Dean]

My Lords, Her Majesty’s Opposition strongly support the EU stabilisation and association agreement process with the countries of the western Balkans. We recognise that the measure before us is a stepping stone to Serbia’s possible eventual membership of the European Union if, as the Minister has stressed, the criteria are met. Regional co-operation is clearly an important part of that process and must continue on a satisfactory basis. We agree that it is important to support the process of peace building in the region and that the agreement is an important building block for future co-operation among those countries.

As I understand it, the period over which the agreement will run is for a maximum of six years. During that period, it is anticipated that there will be regular political dialogue and a commitment to promote regional co-operation and good relations. The agreement pledges support to,

“democratic, economic and institutional reforms”.

As the Minister said, Serbia must adapt to the EU’s conditions, not the other way round. That reinforces the message of conditionality.

What mechanisms does the Minister envisage for this regular political dialogue? Will that regular political dialogue be with the European Commission or with the European Parliament or with the Council of Ministers, including Ministers from this country? Further, what support for democratic, economic and institutional reforms does the Minister have in mind under the agreement? Will that be financial support for building up these institutions? Will such financial support, if it is forthcoming, come from the European Union directly, or will it involve a United Kingdom contribution—if so, can the Minister tell us what that contribution will be?

One might be a little more confident if the Minister could tell us something about the possible involvement of non-governmental organisations, including human rights organisations, at either EU or United Kingdom level. I notice that the Explanatory Memorandum to the order states that,

“this instrument … will have no impact on business, charities or voluntary bodies”.

If that implies that there will be no direct contact with, for example, British non-governmental organisations or British business, that is something of a gap in the sort of dialogue that we would hope for. After all, the stress is not just on Government to Government: it is very much on the institutional and the economic reforms. We on these Benches think—and I am sure that the Committee would agree—that that sort of dialogue should involve our NGOs and the business community.

My last question concerns the last point that the Minister raised on the ICTY: that Foreign Office Ministers would ensure that Parliament is kept informed. Will the Minister tell us how it is proposed that such information will pass from the ministerial desk to your Lordships' House?

[Baroness Falkner of Margravine]

My Lords, the Liberal Democrats also support this stabilisation and association agreement with Serbia. I recall that it is about 17 years since I found myself in Republika Srpska trying to get on a bus along with chicken farmers and various other internally displaced people in the west Balkans to go to Belgrade in order to find out what the Helsinki Watch committees in Belgrade were trying to do at the time, when human rights were so severely repressed. It was a searing experience. The people of Serbia have gone through nearly two decades of difficulty since then. It is right that this approach is followed now to bring them into the broader community of nations in the European Union.

The order provides the EU and Serbia with a political and legal framework for mutual relations, which has contributed to making access negotiations more robust, as my noble friend pointed out. This will, if Serbia co-operates in fullness and humility, make the fact of accession a tangible reality.

Other than agreeing with the order, will my noble friend reassure us on two or three counts? He said that Serbia was co-operating fully, but we know that the Dutch maintain the veto against this order because of their experiences in Srebrenica and their lack of confidence in the Serbian Government that Ratko Mladic and Goran Hadzic will ever be delivered to the International Criminal Tribunal for the former Yugoslavia. While there may be full co-operation, it is odd to see that full co-operation does not deliver the arrests of war criminals. Can we be reassured that the British Government are assisting the Serbian security and military authorities in training or other measures such as intelligence co-operation to help locate these war criminals and bring them to justice in The Hague?

Our other concern is about the domestic reform agenda. We know that levels of corruption in the bureaucracy are extremely high in Serbia and that political reform of the relationship of political parties to Members of Parliament is desirable. They are a long way away from attaining the democratic standards that we would expect in a European Union country. Press freedoms are still rather restricted and journalists continue to be intimidated and harassed. The situation of gay people leaves a lot to be desired and there is still an undercurrent of homophobia in Serbian society, which the Government do not seem to be tackling in any kind of robust framework: they appear to be tolerating rather than tackling it. The status of the Roma people is, of course, as bad as it can be in some parts of eastern Europe.

There are those reservations. The measure is a stepping stone, as the noble Baroness, Lady Symons, said, on the way to achieving accession in the longer term for Serbia. On that note, will my noble friend tell us what he thinks of the timetable for accession? I understand that Serbia is hoping that it might be completed by 2014 or 2015, but there are still major obstacles that we need to overcome in that regard.

[Lord Wallace of Saltaire]

My Lords, I thank both noble Baronesses for their contributions. We all recognise that this is a process whereby Serbia has a number of targets to meet on the way to what we hope will be a full membership. Noble Lords will be aware that Croatia is a long way ahead and that we may well indeed be dealing with a Croatian accession treaty within the next 12 months or so. We very much want the other states of the western Balkans to follow Croatia down that line. As I said in opening, there is no question but that our security depends upon the effective integration of the western Balkans into the European Union.

I was asked a number of specific questions. The European Union is of course providing financial support through a number of programmes. The United Kingdom contributes primarily through those but there are also bilateral channels. When I was at the London School of Economics I taught one or two people from Serbia who were on Chevening scholarships, for example, so there is a range of other channels through which assistance is given.

On political dialogue and monitoring, the European Commission is responsible for monitoring although embassies in Belgrade also participate. They report back to the European Council and the Council of Ministers on how they see things happening on the ground. The last time I was in Belgrade, I was very impressed by the quality of the British embassy and the active way that it engages with Serbians inside and outside the Government there. I also visited a Serbian NGO that had direct links with British NGOs, which seems highly desirable. Wider contacts across civil society, including universities as well as NGOs, are part of how we reintegrate Serbia into European democratic society.

Progress on the International Criminal Tribunal for Yugoslavia is slow, as we all know. We do not know whether the two charged Serbs are still in Serbia or Republika Srpska or whether, as with the Croatian war criminal who was arrested in Minorca or Majorca, they are now way outside the country. We are contributing to training Serbian security forces and the best information that we have, from all those concerned, is that Serbia is continuing to co-operate to the best of its ability with those inquiries. There will of course be full information for Parliament when there is progress. I dare say that if any of them is arrested, the News of the World will have got hold of that even more quickly than us and published it.

The security and co-operation agreement will help to tackle homophobia. The whole process is concerned with raising the level of awareness of broader civil liberties issues. That is very much part of the ongoing dialogue between the Commission, the European Parliament, national Governments and the local authorities. Ratifying this agreement does not imply that we have in any way solved all these issues. Having answered all those questions, I reassure the noble Baroness, Lady Symons, that the Foreign Secretary and the European Minister will continue to write to the respective scrutiny committees after each report from the ICTY and from Mr Brammertz.

I conclude by recommending the SAA and by hoping that Serbia now takes advantage of it and moves forward. I am sure that the SAA does not have a time limit of six years but will operate for six years in the first instance. Many of us would be very happy if Serbia has become an accepted candidate for the European Union before the end of that six-year period, but that depends on Serbia meeting the conditions to which this SAA introduces it.

Motion agreed.

Legislative Reform (Civil Partnership) Order 2011

Monday 7th February 2011 Grand Committee

Considered in Grand Committee

15:49

Moved By

[Lord Wallace of Saltaire]

That the Grand Committee do report to the House that it has considered the Legislative Reform (Civil Partnership) Order 2011.

Relevant documents: 4th Report from the Regulatory Reform Committee.

[Lord Wallace of Saltaire]

My Lords, this order was laid before the House on 25 October last year under negative resolution procedures with an Explanatory Memorandum as required for all statutory instruments. The Delegated Powers and Regulatory Reform Committee, under the chair of the noble Baroness, Lady Thomas of Winchester, considered this draft reform on 10 November 2010 and concluded that the proposal met the tests set out for LROs in the Legislative and Regulatory Reform Act 2006, that it was appropriate to proceed as an LRO and that the negative procedure was appropriate in this case.

However, when the Regulatory Reform Committee in the other House considered the draft on 9 November 2010, it concluded that, although the draft order is uncontroversial—all statutory preconditions and tests have been met—and would not prejudice any existing protection, the proposals contained in the LRO were more than a de minimis change in the law, so the order should be raised to the affirmative resolution procedure.

Section 210(1)(b) of the Civil Partnership Act 2004, in specifically designating that the registration officer must be a UK-based diplomatic officer, does not allow for flexibility in those consular sections within an overseas British post where there are no longer any UK-based diplomatic officers and where civil partnership registration is a service that can be provided. The FCO has been going through a programme of localisation, including regrading of staff. Where there has previously been a consular officer who is a member of Her Majesty’s Diplomatic Service, in some posts there are now only locally engaged staff, and for consular customers resident in such consular districts, we can no longer undertake civil partnership registrations as often as we did previously.

The change in the order will allow locally engaged non-diplomatic consular officers, at any post that is affected by the localisation programme, to be nominated to undertake the registration of civil partnerships and civil partnership ceremonies. The amendment will not affect other aspects of civil partnership registration overseas, which can be undertaken only if local authorities do not object. This will also address two current disparities. First, staff of equal seniority have different powers. Depending on the local circumstances, a consul or vice-consul may be a Diplomatic Service officer or a local member of staff. For example, the vice-consul in Tokyo can undertake this work while the vice consul in Sydney cannot just because one is a member of the Diplomatic Service and the other is a member of the local staff. Secondly, Parliament empowers local members of staff to conduct marriages but, at present, does not empower local staff to conduct civil partnerships.

I am satisfied that the order is compatible with the rights contained in the European Convention on Human Rights. This order is important but, I trust, non-controversial. I hope that it will receive the full support of the Committee.

[Lord Smith of Finsbury]

My Lords, I want to contribute briefly to the discussion on this proposed order because I think I am right in saying that I am the first Member of your Lordships' House to enter into a civil partnership, as I did nearly 5 years ago. I regard it as one of the most progressive and forward-looking steps that we, in this country, have taken over the course of the past decade or so.

The order is wholly welcome. It makes a relatively minor and sensible change in enabling the performance of a civil partnership ceremony to take place where consular staff are locally drawn, rather than originally based here in the UK. This will enable more civil partnerships to take place. It is therefore a very good thing.

However, the debate enables us to reflect on the interesting table attached to the order and its Explanatory Notes that set out the status regarding civil partnerships in a whole range of different countries across the world. There are of course some countries where homophobia is not only rife but encouraged at the moment. We have only to think of some of the very distressing occurrences in Uganda recently to know that that is the case. Sadly, I suspect that it will be many years before we are able to see civil partnerships performed for British nationals in Uganda.

There are many countries across the world, some of which are full members of the European Union, where British nationals resident in that country would not be permitted to perform a civil partnership ceremony under the auspices of the British consul. I hope that the Government will continue to make representations to those Governments where we might have a degree of influence, either through common membership of the European Union or from old Commonwealth ties, to ensure that a more progressive and liberal approach to the possibility of civil partnerships is gradually taken in some of these countries. It would be very interesting to hear from the Minister exactly what steps are being taken in that respect.

Having said that, I believe that this order is entirely welcome. I fully support it. It is a sensible measure and I am very pleased that the Government are bringing it forward.

[Baroness Hamwee]

My Lords, on behalf of the Liberal Democrats, I, too, am very happy to see this order. Perhaps I may say that this is the most sympathetic, human and humane Explanatory Memorandum to any parliamentary document that I have ever seen. I was very impressed at the account of what some individuals did to assist the situation using free time in their diaries. I suspect that the high commissioner who was so helpful in Brisbane is well known to Members of this House. I would have expected no less of her, but it was nice to read about it.

Like the noble Lord, Lord Smith, I, too, am concerned about the wider issue. I appreciate that the Minister is not in a position to do more than make sympathetic noises to these representations. Nevertheless, it is right that we should do so. I was almost as much as anything dismayed at the list of countries in the table which did not reply, but which it was believed would object. That says a great deal.

I hope and would encourage the Government to work as far as they can at the recognition of civil partnerships in those countries. The UK recognises a number of overseas same-sex partnership schemes across and beyond Europe, but this is not widely reciprocated. This order is extremely welcome.

[Baroness Symons of Vernham Dean]

My Lords, my contribution has been largely pre-empted by what my noble friend Lord Smith had to say. The Committee will not be surprised to learn that Her Majesty's Opposition fully support the order. It is a sensible flexibility to the current arrangements and a real advance for those who would otherwise have to travel long distances in order to register their civil partnerships. It is important to recognise that in one sense this is part of a series of changes in the devolution of powers in the Diplomatic Service to locally engaged staff. We have seen that particularly in commercial sections and increasingly in consular sections in our embassies, high commissions and consulates throughout the world.

In the coalition’s business plan for the Foreign and Commonwealth Office, there is a clause that says that the coalition Government will continue to slim down consular services across all our embassies, high commissions and consulates. Does that mean that the Minister envisages that, increasingly, locally engaged staff will undertake work that has heretofore been undertaken by members of the Diplomatic Service?

My question is similar to that posed by my noble friend in relation to those countries where same-sex relationships are currently illegal. Can the Minister tell us in what countries we are actively engaged in discussions with their Governments on that point? There is a rather more subtle point as well. In a number of countries in the world, same-sex relationships are not necessarily illegal but are not necessarily welcomed by a number of institutions. What training of locally engaged staff are Her Majesty's Government undertaking in this respect so that those who might have misgivings about officiating at same-sex civil partnerships not only are made to feel comfortable themselves but do not make those who are engaging in civil partnership ceremonies feel uncomfortable when they come for such an officiation?

I noted that during the consultation period, Stonewall and others responded to the order in an entirely positive way. I also remind the Committee that this was something begun under the previous Labour Government and I would therefore expect spokesmen on this side of the Committee to give it full support. Will the Minister engage in the slightly wider point about the devolution from the Diplomatic Service to locally engaged staff of other forms of consular activity?

[Lord Wallace of Saltaire]

My Lords, I thank all those who contributed to the debate. I will start by responding to the point on locally engaged staff. Yes, it is part of the FCO's business plan to slim down consular posts where possible and reduce costs by taking on more locally engaged staff. I take the point that there are some delicate tasks that locally engaged staff may need to be sensitised to with reference to a range of the issues that they have to deal with in consular posts. I promise to write to the noble Baroness on that issue.

We all recognise that, on the whole question of civil partnerships, we have all been moving forward slowly over the past generation. If one goes back far enough, the law in Britain was pretty closed on these issues. A number of other countries are moving forward much more slowly or are further behind us on the curve. Our predecessors in government—and we continue to do the same—have been pushing to encourage others to move further. My notes say, for example, that the posts that were unable to offer civil partnerships as a result of moving to locally engaged staff included posts in Japan, Australia, Portugal, Austria and Ireland. However, this is no longer a problem in Portugal, Austria and Ireland because, in the past 18 months, they have changed their domestic legislation so the problem no longer arises.

As noble Lords have remarked, there are still other members of the European Union that have not got that far. The previous Government’s Europe Minister, Chris Bryant, wrote to Denmark, Germany and Slovenia, each of which has its own legal recognition on same-sex relationships but does not recognise UK partnerships. Denmark replied to suggest that, as a result, it will amend its legislation to recognise UK civil partnerships. Replies from Slovenia and Germany are still pending. He also wrote to all EU member states that do not have their own civil partnership legislation to ask for permission to conduct civil partnerships in our posts overseas where at least one half of the couple is a British national. Latvia, Cyprus and Bulgaria have replied to say that they do not object as long as their nationals are not involved. Estonia and Poland have said that they continue to object. We have not yet heard from Romania, Lithuania, Malta, Italy, Slovakia or Greece, but all are presumed still to object. We are currently consulting the Government Equalities Office on next steps.

I have a note which says that the training given to local staff will be the same as is currently provided to Diplomatic Service staff. Staff guidance is also being updated so that staff have this additional point of reference. It may be of interest to the Committee to know that the figures I have on the countries in which civil partnerships have most often been registered show that Australian posts come out at the top, then those in Vietnam and then those in Japan. After that, for some reason, it is Colombia. Please do not ask me to explain in detail why it should be those countries; others may wish to investigate.

Having said all that, I recommend this proposal for approval. It is a necessary and highly desirable change that will take this country a little further forward to the goal of becoming an open, liberal society.

Motion agreed.

Misuse of Drugs Act 1971 (Amendment) Order 2011

Monday 7th February 2011 Grand Committee

Considered in Grand Committee

16:07

Moved By

[Earl Attlee]

That the Grand Committee do report to the House that it has considered the Misuse of Drugs Act 1971 (Amendment) Order 2011.

Relevant Documents: 13th Report from the Joint Committee on Statutory Instruments

[Earl Attlee]

My Lords, I beg to move that the Committee considers the draft Misuse of Drugs Act 1971 (Amendment) Order 2011, which was laid before Parliament on 10 January. If it is made, this order in council will bring two new drugs, tapentadol and amineptine, under the control of the 1971 Act and clarify the legislation on mephedrone. Tapentadol is a recently developed, centrally acting analgesic or painkiller, which is likely to be marketed in the UK in the near future following licensing by the Medicines and Healthcare Products Regulatory Agency, or MHRA.

The effects and risks associated with tapentadol are similar to those of other opioid analgesics, including hydromorphone and morphine, which are both controlled as class A drugs under the 1971 Act. Tapentadol presents a risk of addiction, diversion from legitimate sources and potential medicinal misuse. The risks associated with an overdose of tapentadol are constriction of the pupils, vomiting, loss of consciousness, seizures, difficulty in breathing and a risk of serious complications likely to lead to death.

Amineptine, on the other hand, is a powerful and fast acting antidepressant whose misuse has been reported mainly in Asia and Europe. In 2003, the Commission on Narcotic Drugs, on the recommendation of the World Health Organisation, decided to include amineptine in Schedule II to the Convention on Psychotropic Substances of 1971. As a signatory to the 1971 convention, the UK has to schedule amineptine under the 1971 Act to meet its international obligations.

Clinical studies indicate that amineptine has the potential for both dependence and misuse, predominantly in patients with a previous history of substance misuse. The withdrawal symptoms associated with amineptine include anxiety, psychomotor agitation and insomnia. Instances of dependence have been reported in Asia and Europe. The Government have consulted the advisory council as required by statute for both drugs, and in July last year it provided advice on tapentadol and amineptine following consideration of their harms. The advisory council reports that there is no evidence of licit or illicit use of tapentadol or amineptine in the UK. However, it supports the control of both drugs due to the potential harm associated with them. The advisory council also recommends that tapentadol and amineptine are controlled under the Misuse of Drugs Act—in class A and class C respectively—and Schedule 2 to the Misuse of Drugs Regulations 2001. The Government have accepted its recommendations.

The Committee will recollect that mephedrone and other cathinone derivatives—a group of so-called legal highs—were brought under the control of the Misuse of Drugs Act 1971 as class B drugs from 16 April 2010, with cross-party agreement in the final days of the last Parliament. If it is made, the latest Order in Council will also clarify the legislation on mephedrone, subsuming it within the generic definition used to control other cathinone derivatives at the time. Under current drafting, there can be uncertainty surrounding whether Article 2(a) or 2(b) of the 2010 order amending the 1971 Act is applicable to a given sample when preparing a charge for offences relating to mephedrone. The amendment will remove that uncertainty and ensure clarity and consistency for prosecutors, enabling all charges for the possession, supply and production of mephedrone to be prepared under the generic definition in paragraph 1(aa) of the 1971 Act.

This Order in Council, if it is made, will ensure that while honouring its obligations as a signatory to the 1971 UN convention, the UK will also be taking precautionary measures, based on the assessment of harms and the potential for misuse highlighted by the advisory council, by controlling tapentadol and amineptine under the 1971 Act.

There will be no designation order in the case of the two new drugs we seek to control through this Order in Council, as both drugs have legitimate medicinal uses. However, it is intended to make two further related statutory instruments which will be subject to the negative resolution procedure. The misuse of drugs designation amendment order 2011 will amend the Misuse of Drugs (Designation) Order 2001, subsuming mephedrone within the generic definition in the order. The misuse of drugs amendment regulations 2011 will similarly amend the Misuse of Drugs Regulations 2001, bringing mephedrone within the generic definition in the 2001 regulations and including tapentadol and amineptine in Schedule 2 to the 2001 regulations. Those instruments will be laid so as to come into force at the same time as the Order in Council, if it comes into force as proposed.

The Government will publicise the approved law changes on tapentadol and amineptine and the clarification of the legislation on mephedrone through a Home Office circular.

[Lord Hunt of Kings Heath]

My Lords, I am sure we are all grateful to the noble Earl for his remarks in introducing this order. The scientific evidence and advice on which the Government have acted is very clear and I welcome the Government’s action. The first two provisions in the order follow advice from the Advisory Council on the Misuse of Drugs. A letter about tapentadol from Professor Les Iversen of the Advisory Council on the Misuse of Drugs in July 2010 concludes that the abuse liability of the drug would be substantial and has the potential to cause social harm through diversion and addiction. Measures for amineptine were also on the recommendation of the advisory committee, which supports that drug being controlled under the Misuse of Drugs Act 1971.

The Explanatory Memorandum discloses that no consultation has taken place on this and that the Minister’s department has concluded that it is not necessary or beneficial so to do. The noble Earl will be aware that the Merits Select Committee has suggested that this Committee should satisfy itself that the review processes for the changes are sufficiently robust. I invite the noble Earl to respond to that comment of the Merits Select Committee.

In relation to these first two drugs, I take this opportunity to thank Professor Iversen and his advisory committee for the extremely valuable work that they do. The Minister has also explained that the changes in the draft order about mephedrone will not affect its classification. It is, and will remain, a class B controlled drug. The proposed clarification is simply a technical change in the legislation to make it more straightforward for prosecuting authorities to prepare charges. That seems extremely sensible and the Official Opposition are glad to support the proposal.

It is only a few months ago that mephedrone was brought under the control of the Misuse of Drugs Act 1971 as a class B drug. As has been explained, the paperwork accompanying the order makes it very clear that these drugs are harmful and dangerous and, in addition to legislative controls, a series of actions is required going beyond law enforcement and embracing prevention, public health and education. I would be grateful if the noble Earl could say something about what progress has been made on these fronts since the drug received the classification last April.

I would also like to ask the Minister about the impact of the proposed changes to the National Health Service on public health programmes in relation to this and other drugs. In so doing, I should refer to my declaration of a number of interests of mine in healthcare, declared in the House of Lords register of interests.

I understand that many useful public health programmes in relation to drugs are organised and funded locally by primary care trusts. The noble Earl will be aware that, under legislation now in the other place, primary care trusts are due to be abolished, with most of their public health functions being transferred to local authorities, alongside ring-fenced funding. Perhaps the noble Earl—if not today, but in writing—can assure me that his department will work very closely with the Department of Health and CLG to ensure that the budgets for drug prevention work, which are currently held locally, will be protected and that local authorities will be strongly encouraged to be proactive in that area.

[Baroness Hamwee]

I, too, am happy to support this order. I would like to follow up the questions asked by the noble Lord, Lord Hunt of Kings Heath, on consultation. The Merits of Statutory Instruments Committee referred in its report to amineptine having been dealt with by the Commission on Narcotic Drugs as long ago as 2003. That is quite startling. I am sure that the noble Earl will have been briefed as to the reason for the delay.

I also want to ask about the reference in the Explanatory Memorandum to consultation not being necessary. One might say that it is or is not, but at least one would understand it. I simply do not understand why consultation may not be “beneficial”, which is the term used in paragraph 8.1 of the Explanatory Memorandum. When is consultation not beneficial? I hope that the noble Earl can find an answer to that perhaps more philosophical question.

[Earl Attlee]

I am grateful for the helpful response from all noble Lords in this short debate. I think that the most important point to be made is about consultation, which, of course, is necessary. But it is achieved in a variety of ways, including the Advisory Council on the Misuse of Drugs talking to the manufacturers of drugs, particularly of tapentadol, and to the medical health care regulatory agency. Of course, we keep all these matters under review.

The noble Lord, Lord Hunt of Kings Heath, asked me some NHS questions which I think he would agree were rather wider than this order, which is concerned with avoiding harm from therapeutic and recreational drugs. But I will draw our debate to the attention of my noble friend Lord Howe.

As regards mephedrone, there are frank website discussions about its dangers. Ministers have written to organisers of summer music festivals. There is also the student campaign promoting the message that just because something is legal, that does not make it safe. There are ongoing campaigns to educate people of the danger of so-called legal drugs.

Approval of this order will ensure that the UK continues to meet its international obligations and that our drug laws are effective in relation to newly developed pharmaceutical drugs entering the UK market. Controlling these drugs will ensure that the necessary regulatory framework is in place to protect the public from the potential harms associated with these drugs. We will continue to highlight that mephedrone is harmful and that it remains a class B drug, monitor the trends and the misuse of the drugs being proposed for control, and assess the impact of the controls introduced by this order.

[Baroness Hamwee]

Perhaps I may come back to two points that I made, which may have sounded a little flippant but were serious. The first concerns the delay since 2003, and the other the reference to consultation not being beneficial. If my noble friend Lord Attlee cannot answer these now, I should be grateful if he would write to me with a copy circulated to other Members of the Committee.

[Earl Attlee]

My Lords, I never said that the consultation would not be beneficial. I said that it would be beneficial, but that the impact assessment—to which I think my noble friend referred—or the Explanatory Memorandum said that it would not be necessary. It was not necessary or beneficial because of the ACMD process, the activities of the MRHA and consultation with the manufacturer.

I did not answer her question about why it has taken so long for the UK to control amineptine when it was scheduled under the UN convention. Amineptine came to light following an audit carried out to ensure that the UK was fulfilling its international obligations. As soon as this came to light, the Government consulted the ACMD, as required under the Misuse of Drugs Act 1971, and, following its advice, have moved swiftly to bring amineptine on to the 1971 Act. However, at no time during this period were the public exposed to any risks from this drug, as amineptine has never been available or licensed in the UK. The ACMD has confirmed that there was no evidence of illicit use of amineptine in the UK. I hope that that answers my noble friend’s questions.

[Lord Hunt of Kings Heath]

My Lords, as regards consultation, the noble Earl, Lord Attlee, has been helpful. I think he is saying that the advisory committee and the MHRA have gone through their own public consultation procedures and that therefore it is not necessary to do so again. Perhaps he could confirm that. In an otherwise very clear Explanatory Memorandum, it would have been helpful if that point had been raised.

[Earl Attlee]

I am obliged to the noble Lord, Lord Hunt of Kings Heath. He is absolutely right.

Motion agreed.

Immigration and Nationality (Fees) Order 2011

Monday 7th February 2011 Grand Committee

Considered in Grand Committee

16:24

Moved By Earl Attlee

That the Grand Committee do report to the House that it has considered the Immigration and Nationality (Fees) Order 2011.

Relevant Documents: 14th Report from the Joint Committee on Statutory Instruments

[Earl Attlee]

My Lords, the order concerns the charging for visa, immigration and nationality services and will enable the UK Border Agency to specify applications, processes and services for which it intends to set a fee. I thank all noble Lords who will take part in this debate. Specific fee levels will be set in separate legislation—using the affirmative procedure—that will be brought before the House in due course. Noble Lords will have the opportunity to ask searching questions about the level of fees in that debate.

In accordance with our legal powers, the order will carry forward our existing powers in the Immigration and Nationality (Fees) Order 2007 and set out the new provisions for which we intend to charge fees in future. The order will also transfer powers currently set out in the Consular Fees Order 2010 from Foreign and Commonwealth Office legislation to Home Office legislation so that all visa, immigration and nationality fees are handled in the same place. This will improve intelligibility for all customers, practitioners and corporate partners and will help address concerns raised previously in this House about the need for consolidation of such powers.

The order will allow us to charge fees in support of new services. For nationality applications, this includes the registration as British citizens, under amendments to Sections 1(3A) and 4D of the British Nationality Act 1981, of children born to foreign or Commonwealth parents who are serving as members of the Armed Forces. Previously, children born overseas to a foreign or Commonwealth parent serving outside the UK as a member of the Armed Forces had to wait until their return to the UK before they could acquire British citizenship. The order will also apply to those children born to a foreign or Commonwealth parent serving the UK Armed Forces who register as British citizens. As children born in the UK to a parent who is serving in the Armed Forces automatically become British citizens, both these changes will provide equality of treatment to the children of foreign or Commonwealth personnel irrespective of when or where they are born. The changes also represent action by the UK Border Agency on its commitment to enhance the immigration and nationality rights of Armed Forces personnel and their families.

The order will also provide a power to charge for requests for endorsements to amend the personal details on a previously issued national certificate.

In addition, some people are entitled to hold the status of British protected person through their connection with a former British protectorate, protected state, mandated territory or trust territory. Although this status can no longer be obtained automatically, people can apply for this sort of British nationality if they meet the appropriate criteria.

Students who were granted leave under tier 4 of the points-based system between 31 March 2009 and 4 October 2009 are currently required to advise the UK Border Agency when they are seeking to change their educational institution. Other tier 4 migrants apply and pay a fee to cover the cost of making such a change to the terms of their leave. We think that it is right that all students are treated equally in paying this fee. The order will provide that consistency.

The order will also allow us to charge a fee for highly trusted sponsor status at a level independent of the standard licence fee. This is an optional service for sponsors of tier 4 students under the points-based system. Currently, we charge the relevant sponsorship licence fee for such services. As we continue to develop service propositions for these sponsors, we believe that it is sensible to separate these provisions to ensure that we can set fees—subject to future parliamentary approval through the affirmative resolution procedure on the specific amounts—that better reflect the nature of the services provided.

Our power to charge fees for visa, immigration and nationality applications, processes and services is currently derived from the Immigration and Nationality (Fees) Order 2007.

The 2007 order has been amended twice since it came into force. Moving forward, however, to ensure that there is only one fees order in place under Section 51 of the Immigration, Asylum and Nationality Act 2006, we are consolidating the 2007 order and its amendment into this order. That will improve the intelligibility of our powers, as I mentioned earlier.

We will continue to ensure that fees for immigration and nationality demonstrate that the UK is open for business and retains its position as an attractive destination. We welcome the economic, cultural and social contribution made by legal migrants to the UK. As I said, we will return to Parliament in due course to debate further regulations under the affirmative procedure specifying the fee levels that rely on the powers in Section 51 of the Immigration, Asylum and Nationality Act 2006 and additional powers in the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004, as amended.

The order provides a basis for the sustainable immigration system that noble Lords all want and I commend it to the Committee.

[Lord Hunt of Kings Heath]

My Lords, I am sure that the Committee is grateful to the noble Earl for his clear introduction to the Immigration and Nationality (Fees) Order 2011. As he explained, the draft order enables the Secretary of State to set fees for applications related to immigration or nationality and to charge for the provision of services or processes related to immigration or nationality. Once this draft order comes into force, the Secretary of State will be able to make regulations setting out the relevant fees and charges.

That is fair enough. But what lies behind this seemingly reasonable approach is the immigration policy of the Government, which is causing serious concerns and can best be described as a complete shambles. The fact is that the Labour Government’s points-based system would have been a far more effective means of controlling non-EU migration rather than an arbitrary and inflexible cap. It is clear that the Government’s cap policy was not thought through properly. It certainly did not get the scrutiny that it deserved. Not only will it do little to control immigration, it is clear that the Prime Minister's flagship election promise to bring net immigration down to the tens of thousands has now been watered down from a firm pledge to just an aim.

Only an hour or two ago, the House passed the Budget Responsibility and National Audit Bill. It is worth referring to the comments of the Office for Budget Responsibility in November. It said that the Government’s immigration cap will make no difference to net immigration levels:

“The interim OBR’s June Budget estimates of trend growth estimates were based on an average net inward migration assumption of 140,000 per annum … Since June, the Government has announced a limit of 21,700 for non-EU migrants coming into the UK under the skilled and highly skilled routes from April 2011, a reduction of 6,300 on 2009 … At this stage, we judge that there is insufficient reason to change our average net migration assumption of 140,000 per year from 2010, which remains well below the net inflows of 198,000 seen in 2009”.

However frail the Government’s migration policy is, it is inescapable that enormous pressure is to be put on the UK Border Agency by the reduction in its budget of up to 20 per cent in real terms over the next four years. That feeds through into a reduction in staff of around 5,200. Cutting the number of border officers and staff by such an amount raises questions about the effective security of our borders. We seem to be seeing the noble Earl’s department desperately scrambling around trying to raise money through the use of the order. How much, it is impossible to say, as no details are given in the order or the Explanatory Memorandum and no impact assessment has been made. My understanding is that the reason for that is that the information will be made available alongside the regulations made in reliance upon this instrument. However, it is at least likely that the Home Office must have some indicative intent as to what income the fees will be expected to raise and I would be grateful if the noble Earl would inform the Committee of any details that he may have.

I would also like to follow on from the previous debate on the misuse of drugs by asking about consultation. We are informed that a full consultation was undertaken in September to December 2009, with a low response rate and support for a flexible fee policy. Has there been any further consultation since that took place?

16:36

Sitting suspended for a Division in the House.

16:44

[Lord Hunt of Kings Heath]

My Lords, I apologise for keeping the Committee waiting. I had an enormous opportunity to think up some more questions but, alas, the excitement of the vote rather inhibited me from doing so.

In his introductory remarks, the noble Earl mentioned that when the orders that will follow come to the House, they will be subject to certain scrutiny in relation to the fees. In relation to those subsequent orders, will there be full consultation before they are brought to the House?

I would finally like to ask him whether he can explain how he thinks the UKBA can be expected to carry out its crucial duties effectively when having to take out such a huge amount of people and finance. If he says that this is to be a more efficient use of the way in which the UKBA organises itself, and that there will be no impact on front-line UKBA services, I would be grateful if he could give me a definition of what he might mean by front-line services. He will be aware that I put down a Question to the Government on 1 December about the definition of front-line services in relation to police forces. As of today, that was still unanswered. It is the only Question that is still unanswered in your Lordships' House from before Christmas. A delay from 1 December to nearly mid-February is not very much to the credit of the Home Office. I realise that he is not answering such questions today, but I think that it would be helpful if he could give a definition of front-line services.

[Baroness Hamwee]

My Lords, my questions follow a number of those that were raised by the noble Lord, Lord Hunt of Kings Heath, although I will not follow him on the desirability or otherwise of the changes to the Immigration Rules—or on the definition of front-line services in the case of Labour Party research on police numbers.

However, as I am confused about this—I apologise to the Committee if it is utterly clear to everyone else—I will ask my noble friend Lord Attlee whether this order lays the ground for changes to the Immigration Rules which Parliament has not yet agreed and has not yet had sight of. The answer may be that the rules which we will be asked to agree are a mixture of the same sorts of provisions as are in place at the moment but that they will be a different mix. I am unclear and slightly uneasy at the prospect of being asked to agree a structure for fees if this is related to the new rules themselves.

I should also be grateful if my noble friend will give us an assurance that moving fees relating to immigration and nationality matters from the consular fees order to regulations under the 2006 Act provides us with exactly the same level of scrutiny as has been available under the arrangement which is being superseded.

In terms of the substantive comment, there are a couple of matters on which I should like to have a word. As regards students, we are told in the Explanatory Memorandum that a student moving between institutions is currently not charged for the, let us say, visa—I am not quite sure of the status of the permission—and for the UKBA’s consideration of that. We are told that the order will enable—a term used throughout—fees to be imposed for the request to change institutions. I take it that the word “enable” means that there will be a fee. My comment is that, although I share the view expressed by consultees that it is right that the taxpayer does not bear the whole of the cost of this service, overseas students nevertheless bring a lot of money and potential good will with them. I feel a little uneasy—

[Lord Hunt of Kings Heath]

Yes!

[Baroness Hamwee]

Oh! The result of the Division in the House makes me feel even more uneasy. I also feel a little uneasy about the prospect of charging such students more.

With regard to the new provisions explained in paragraphs 7.3 and 7.4 of the Explanatory Memorandum, will the Minister say what thought has gone into allowing fees to be charged to provide “a route to … citizenship” for children born outside the UK to members of our Armed Forces? It seems to me to be pushing it a little to charge members of the Armed Forces for this. I hope that the Minister can amplify the thinking behind that.

[Earl Attlee]

My Lords, I thank all noble Lords for their considered response this afternoon.

The order concerns itself with the ability to set the fees. The noble Lord, Lord Hunt, used somewhat flamboyant language to describe our current immigration policy. Clearly we shall have to look forward to our discussions in the coming months, when he can table suitable Motions and Questions to explore his concerns further. However, I understand them; I am listening to similar concerns being expressed right around the House, and I will discuss these issues with my honourable friend Mr Damian Green tomorrow. I will use a lot of the noble Lord’s speech, when I read it in Hansard tomorrow, as my starting point. We can also look forward to the Oral Question on immigration next week; I am sure that the noble Lord is. There will be plenty of time to discuss all the issues in the detail that we want.

The level of fees will be set by further orders. Where the fees are above the level required for cost recovery, there has to be an affirmative procedure. Where the fees are lower than necessary for cost recovery, there will be the negative order procedure, but we intend to make sure that we can discuss all the fee levels together.

Some 2.5 million people are looking for work, many of whom have key skills to offer employers. There is more reason now than ever to limit economic migration. We are fully aware that we will not meet our target of reducing net migration to the tens of thousands by looking at economic routes alone, so we are looking at all the main immigration routes. We will also consult on changes to the marriage route and entitlement to settle in the UK, to make settlement a less automatic prospect.

I was asked how we decided the level of the limit. The MAC recommended a reduction of 6,300 visas in 2011-12, which we accepted. Applying that reduction to our 2009 baseline of 50,000 tier 1 and tier 2 visas results in an overall limit for 2011-12 of 43,700. However, the 2009 baseline includes 22,000 ICTs. As they have been exempted and need to be excluded from the baseline, that gives an overall limit of 21,700.

The noble Lord, Lord Hunt, asked what additional consultation had taken place since 2009. The UK Border Agency published results of the last full consultation on fees in January 2010. That consultation established the principle that the agency should charge flexibly to take into account wider policy aims, and 90 per cent agreed. Since then, we have engaged with the task forces representing the Armed Forces, education, employment, arts and the entertainment sectors.

The noble Lord also asked about the impact assessment and specific fee levels. We expect to raise £829 million from fee income in 2011-12, but that is only 36 per cent of the UK Border Agency costs. The noble Baroness, Lady Hamwee, touched on whether the fees covered all the UK Border Agency’s costs; clearly, they do not. We will publish a full impact assessment when we lay the subsequent fee regulations, which will be brought before the House through the affirmative resolution procedure.

The noble Lord, Lord Hunt, mentioned much of our immigration policy. The Government believe that Britain can benefit from migration but not uncontrolled migration, which places unacceptable pressure on public services. We can reduce net migration without damaging our economy. We can increase the number of high-value migrants—the entrepreneurs, the investors, the research scientists—at the same time as we reduce the total number of people coming into Britain through economic routes.

The noble Lord asked broadly what the UK Border Agency is doing to ensure that the effect of any increase is minimised. The agency has committed to cutting its budget by up to 20 per cent in real terms over the next four years. That is the economic situation that we are in; that is the reality. The UK Border Agency is cutting overheads by more than a third over the spending review period. The agency will save around £500 million in efficiencies by reducing support costs, boosting productivity and improving value for money from commercial suppliers. The agency is determined to ensure that applicants pay more of the costs of running the agency, with taxpayers paying less. That will ensure that we can continue to provide the excellent service that noble Lords would wish.

The noble Lord, Lord Hunt, asked about the definition of front-line services. We will provide a written response to that as soon as possible. I apologise for the delay in providing that information, but I will personally look into this with the Home Office.

The noble Baroness, Lady Hamwee, asked about the Armed Forces nationality fee. It is fair that, rather than the taxpayer, those seeking a benefit from the application should meet the costs of the consideration. A person or their parent makes a choice on whether they wish to register as a British citizen, so they accept that it involves the payment of a fee. Enabling a choice to be made also ensures that the person can make decisions regarding any other nationality that they may hold.

The noble Baroness also asked about the possibility of pricing out students. We remain committed to maintaining the UK as an attractive destination for work, for study, to visit or for cultural visits. We recognise that migrants make a valuable contribution to the wider British economy and continually monitor our fees to ensure that they remain competitive with similar endorsement types offered in other countries. We believe that our fees remain competitive, particularly when one considers them alongside the entitlements which are offered to successful applicants. We also need to ensure that the charging system is fair to those who use the system and fair to the UK taxpayer, who will continue to support the immigration system that brings benefits and enrichments to this country. The fees that we charge are neither designed nor expected to deter migrants from choosing to come to the UK.

We will return to Parliament in March with regulations under the affirmative procedure to ask for approval of the regulations that will detail the fee levels for the visa immigration and nationality services covered by this order. The Committee should be assured that the brightest and the best will continue to be welcome in the UK, as will those who seek to come here to visit or to invest.

[Lord Hunt of Kings Heath]

My Lords, I wonder whether I could just come back to the noble Earl on one or two points. First, I thank him for the comprehensive response that he gave to both me and the noble Baroness but I do have two points.

On the brightest and the best, I very much appreciate the noble Earl’s willingness to share some of these points with Mr Damian Green, the Minister responsible. My concern about students is one that comes from very reputable educational institutions—not the bogus institutions which we have debated and on which I think that a great deal of action has already taken place. These are respected institutions that have overseas students who make a huge contribution to the life and the finances of our higher education institutes and who go back to their own countries. They are also very helpful in future relationships between the UK and other countries.

The noble Earl knows that my background is in the health service, on which I refer noble Lords to the register of interests. However, if one thinks about the doctors who have trained here, for example, while I know that this is a slightly different issue from the more general one of students from other countries, the positive impact that they have on the UK healthcare industry for years to come is immeasurable. That is why we have to be careful about the consultation that is out with UKBA at the moment.

The second issue is that of fairness for those overseas students who are currently here and who will be impacted by the restriction on work. A crucial part of the experience for overseas students when they come here is that they are able to do some post-student work. Is the noble Earl prepared to look into this matter? I know we have Oral Questions next week, but these matters relating to work are being pursued by myself and by the noble Lord, Lord Clement-Jones, with a genuine concern about the impact that this will have on the UK and on our universities in particular.

The Minister very kindly responded to the points I raised about consultation. He is to bring forward orders later on with the proposed fee changes. Will the proposed fees in those orders have gone through some consultative procedure? It would be helpful to get an answer to that.

[Earl Attlee]

My Lords, on the first point raised by the noble Lord, I agree with nearly everything that is said about the background to his concern; he is clearly right. I say “nearly everything” just in case he said something with which I cannot agree, but everything he said makes sense. He talked about post-student work, if I may put it that way. The problem is that some students have abused it and ruined it for others. We need to work out how we can get all the benefits of overseas students not only for ourselves but for the rest of the world while avoiding some of the problems.

[Lord Hunt of Kings Heath]

I understand that, but the point is that we are in a competitive world. I am being told that other countries, such as the US and other European countries, are rubbing their hands with glee at the UKBA consultation because they know that the impact will be that the high-quality people, who would have come to the UK, will go elsewhere. From an economic point of view, that is madness. I am grateful for the tone of the noble Earl’s response, which is very constructive, but we need to be very careful about the signals we are giving to the kind of people we would always want to welcome to our shores.

[Earl Attlee]

My Lords, I am grateful for the noble Lord's attitude to me because I am trying to be as helpful as I can and I look forward to drilling down into these issues and getting him the answers that he requires. The noble Lord made the point about the brightest and the best and the concerns of the education sector. We note those concerns and we will respond fully to the responses received on the UKBA students’ consultation. However, it is worth noting that not all students return immediately: 21 per cent of students who entered in 2004 were still here after five years. The noble Lord asked about consultation and my understanding is that there will be consultation internally with Government but not externally. If I am wrong on that I shall write to him. I hope I have answered all of the noble Lord's concerns.

Motion agreed.

Civil Procedure (Amendment No. 4) Rules 2010

Monday 7th February 2011 Grand Committee

Considered in Grand Committee

17:09

Moved By

[Lord Sassoon]

That the Grand Committee do report to the House that it has considered the Civil Procedure (Amendment No. 4) Rules 2010.

Relevant documents: 14th Report from the Joint Committee on Statutory Instruments.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

I beg to move that the Grand Committee do now consider the Civil Procedure (Amendment No.4) Rules 2010, but I will also speak to the Rules of the Court of Judicature (Northern Ireland) (Amendment No.3) 2010.

Noble Lords may find it helpful if I start by briefly explaining the wider legislative context of the rules that we are debating today. The ruling of the Supreme Court in the case of Ahmed and others v HM Treasury in January 2010 placed the legality of the Terrorism (United Nations Measures) Order 2009 in doubt. Consequently, the Terrorist Asset-Freezing (Temporary Provisions) Act was passed in February 2010 to protect the 2009 order from being quashed on vires grounds. Subsequently, the Terrorist Asset-Freezing etc. Act 2010 received Royal Assent in December and put terrorist asset-freezing designation powers in primary legislation. I think that all parties recognise that the 2010 Act was absolutely necessary to the United Kingdom’s continued national security and to fulfil our international obligations under United Nations Security Council Resolution 1373.

Both Houses of Parliament gave the Act careful scrutiny during its passage, in particular looking closely at the civil liberties issues raised and how best to address them without compromising national security. The Government made a number of amendments to the asset-freezing regime provided by the 2009 order, including the introduction of a higher threshold for designations lasting longer than 30 days—reasonable belief rather than reasonable suspicion—and a merits-based right of appeal against designation decisions rather than judicial review. I am confident that we struck the right balance in the 2010 Act between protecting national security and protecting civil liberties.

As part of the government amendments which introduced a merits-based right of appeal to asset-freezing designation decisions, a provision was included to allow the Lord Chancellor to make rules of court for such appeals. That was necessary to allow rules to be made quickly after the Bill received Royal Assent. Rules were needed quickly because transitional provisions in the Act deem designations in force under the 2009 order to have been made under the 2010 Act for a short time to ensure continuity of asset-freezes. Rules needed to be made to ensure that there was a framework in place if designated persons wanted to challenge their freezes under the Act.

The Lords Chief Justice of England and Wales and of Northern Ireland were consulted on the draft rules. The Civil Procedure Rule Committee was informed that the Lord Chancellor would be making rules to provide for asset-freezing appeals and was shown an early draft. The Civil Procedure (Amendment No.4) Rules 2010 and the Rules of the Court of Judicature (Northern Ireland) (Amendment No.3) 2010 were laid before Parliament on 23 December 2010 and came into force the next day.

The rules of court made by the Lord Chancellor for designation appeals amend Part 79 of the Civil Procedure Rules and Order 116B of the Rules of the Court of Judicature (Northern Ireland) 1980 respectively. Part 79 was created following the passage of the Counter-Terrorism Act 2008 to provide rules of court for financial restriction proceedings, including asset-freezing proceedings.

Rules in Part 79 cover the use of closed information and special advocates and are intended to ensure that information is not disclosed contrary to the public interest while ensuring that proceedings are properly determined. The existing provisions of Part 79 apply judicial review principles to such challenges. These remain in force for decisions—such as challenges in relation to asset-freezing licensing decisions—that remain subject to judicial review principles.

There are three strands of amendments to the Part 79 rules to allow for appeals. First, Rule 79.1 is amended so that the general provisions concerning the appointment of special advocates, the requirements for disclosure and procedures for determination of proceedings apply also to designation appeals. Secondly, a new Section 3 is inserted. This deals with the mechanics of starting an appeal by setting out the details to be included in the notice filed to start an appeal and the material to be filed with that. It also applies existing rules to any application to the Court of Appeal following a High Court determination. Thirdly, there is one substantive amendment made to the general provisions in Section 4 of Part 79 as they apply to appeals. This concerns disclosure, which in itself is a complicated matter and requires a little explanation.

Rule 79.23 requires the “disclosing party” to search for material that is relevant and, under Rule 79.23(1)(b), to file and serve material: on which the disclosing party relies; which adversely affects the disclosing party; which adversely affects the other party; or which supports the other party.

There is an exception for the disclosure of “closed material” which is dealt with separately. A difficulty arises because the definition of closed material in Part 79 does not cover material which a party holds and which adversely affects not him but the other party, but which he does not wish to use. Therefore, if the Treasury holds sensitive material which supports the case for designation but which, for reasons of national security, it does not want to rely on in an appeal, it could be argued that it should be disclosed under the current wording of Rule 79.23. We think that this interpretation is wrong, given the obligations in the rules to ensure that disclosures of information are not made where they would be contrary to the public interest.

We are therefore using this amendment to make clear the parties’ disclosure requirements so far as the rules apply to appeals. We will ask the Civil Procedure Rule Committee to exercise its power to remove this provision from Part 79 as it applies to other financial restriction proceedings. Let me stress that this change in no way adversely affects the appellant or the proper determination of the appeal. Nor will it affect the Treasury’s obligation to disclose all information which adversely affects the Treasury’s case or supports the other party’s case.

On 4 February, the Joint Committee on Statutory Instruments published its 14th report, in which it drew two issues to the special attention of both Houses. We are grateful to the committee for publishing the report on Friday, rather than tomorrow as would have been its usual practice. Early publication has enabled this debate to go ahead when otherwise it would inevitably have had to be postponed.

The first point to which the JCSI draws special attention is a failure to set out the fact that Section 28(4) of the Terrorist Asset-Freezing etc. Act 2010—one of the instrument’s enabling powers—incorporates by reference Sections 66 to 68 of the Counter-Terrorism Act 2008. Sections 66 to 68 authorise provisions in the court rules which apply to designation appeals. The JCSI concludes, and the Ministry of Justice accepts, that the instrument does not in this respect comply with proper drafting practice. However, there is no effect on the validity of the instruments.

The JCSI has also drawn attention to a reference in each set of rules to “the application” rather than “the appeal”. The Ministry of Justice has made it clear in correspondence with the JCSI that although the meaning should be clear from the context, use of “the appeal” would have been preferable. The Ministry of Justice will draw that to the attention of the Civil Procedure Rule Committee, which can, if it considers it appropriate, make that change next time the Civil Procedure Rules are amended.

I turn now briefly to the Rules of the Court of Judicature (Northern Ireland) (Amendment No.3) 2010. Order 116B was, like Part 79, created following the passage of the Counter-Terrorism Act 2008 and creates rules of court for the determination of challenges to financial restriction decisions. Order 116B has a similar scope and content to Part 79 in that it provides for the use of closed material and the appointment of special advocates. Order 116B is similarly amended by the Amendment No.3 instrument to apply it to designation appeals under the 2010 Act, and is amended in the three ways outlined above for Part 79. If the amendments to Part 79 and Order 116B are approved, any future amendments to Part 79 will be made by the Civil Procedure Rule Committee and any future amendments to Order 116B will be made by the Northern Ireland Court of Judicature Rules Committee.

The court rules we are debating set out the process we expect the court to follow when considering merits-based challenges to designation decisions. They implement one of the key new safeguards agreed for the UK’s terrorist asset-freezing regime. They are necessary to ensure that a proper framework is in place for challenges to asset-freezing designations, and will ensure that appropriately in-depth scrutiny is given to the relevant decision while protecting sensitive material from damaging public disclosure.

[Lord Davidson of Glen Clova]

My Lords, I am grateful to the Minister for introducing these rules. The previous Government promoted terrorist asset-freezing orders, for very good reasons, to increase the protection of the UK and of its citizens. I am pleased to see that the approach has been continued by this Government. I particularly welcome the refinement in relation to disclosure, which I agree will remove the potential for difficulty.

One appreciates that, prior to the election, many members of the then Opposition made criticisms about anti-terrorist legislation and that this Government contains a number of those who made those arguments—although not, of course, the Minister. Yet those others are, perhaps, now coming to an understanding that the tension between civil liberties and the protection of the UK is rather more complicated and less clear-cut than they first argued. One notes that they are also discovering this in relation to control orders, another area which was of great controversy.

These instruments seek to implement the innovations that the Government thought proper to bring to terrorist asset-freezing orders. The use of judicial review with the addition of a separate merits-based appeals structure adds another level of potential court intervention. Another innovation is the introduction of the distinction between “reasonable suspicion” and “reasonable belief”, which is not pellucid. It now means that where the individual is reasonably suspected of being involved in terrorism, he will not be under a terrorist asset-freezing order after 30 days, unless that reasonable suspicion is shown to move towards reasonable belief standards. I am not sure whether that is particularly reassuring to UK citizens.

There are views that reasonable belief and reasonable suspicion are, if at all different, extremely close in meaning given the application of the objective standard imposed by the use of “reasonable”. This will no doubt be an area for complex argument before the courts, but it is perhaps not easy to see how much of a gain for the civil liberties argument this represents, if the difference is negligible. If, on the other hand, there is a palpable and real difference between the two standards—one notes that the noble and learned Lord, Lord Brown of Eaton-under-Heywood, has identified such an interest in the case of Saik—then the notion that those reasonably suspected of being involved in terrorist activity will be at liberty, after 30 days, to use their assets as they choose becomes a real concern.

It would hardly be satisfactory, where an interim order is made expressly because the individual is reasonably suspected of being involved in terrorist activity and to protect members of the public, that if one falls short of reasonable belief that individual is at liberty to do with his assets as he will. Is the Minister in a position to offer guidance on an interpretation of the difference between reasonable suspicion and reasonable belief? I ask him that because doubtless it will become an issue in the courts. It is doubtless that the provisions in respect of judicial review and appeal will be deployed on these types of arguments as well as on other issues. The expansion of the courts’ role with the addition of a separate merits-based appeals structure regarding terrorist asset-freezing orders against individuals suspected or believed to be involved in terrorist activity will presumably be welcomed by those individuals, at least. In this context, it would be interesting to hear whether the Government consider that the courts’ increased role pursuant to these instruments provides an increase or a reduction in the level of protection to the population at large—for of course it is they who will be among the victims in the event of any future terrorist attacks.

Will the Minister explain whether this expansion of the court’s role creates a tougher or more relaxed environment for potentially highly dangerous terrorists? I ask that question in the light of the expression made by the noble Lord, Lord Carlile of Berriew, in his recent report on the Prevention of Terrorism Act 2005. There is a concern that European Court of Human Rights’ decisions are making the UK,

“a safe haven for some individuals whose determination is to damage the UK and its citizens”.

The question should be asked whether the Government consider the expansion of the court’s role by these orders discourages or encourages those individuals identified by the noble Lord, Lord Carlile.

The Minister has made reference to the report of the Joint Committee on Statutory Instruments regarding the failure to comply with proper drafting practice and defective drafting. I note his explanation and proposed action in relation to these observations and I shall say nothing further on the point. However, we welcome the general continuation of the previous Government’s approach to disrupting potential terrorist activity.

[Lord Sassoon]

My Lords, I am scripted to say that this has been an interesting debate, but it has been a short, focused and to-the-point exchange. I am grateful to the noble and learned Lord, Lord Davidson of Glen Clova, for being short, sharp and to the point in asking me some key questions about these new court rules.

The noble and learned Lord asked about the distinction between suspicion and belief, and what, if anything, that says about our underlying concern for national security as balanced with proper safeguards on grounds of civil liberties. As the noble and learned Lord will know, various court judgments define the difference between reasonable suspicion and belief. In summary, for suspicion, one believes that something may be so and, for belief, one believes that it is so. I am certainly not in a position to second-guess the courts, which have judged that there are significant differences. The Government certainly believe that national security requirements can be met by this combination of interim freezes for up to 30 days on the basis of reasonable suspicion, during which time further investigations can be made to determine whether the belief can be met. We believe that this balance between the national security and the civil liberties imperatives, which was extensively debated in your Lordships’ House, achieves what is intended. The court rules merely flow from that. I certainly do not think that the court rules in any way cut across or work against that construct.

On the role of the courts and judicial review versus appeal, the question was asked whether these instruments will result in a strengthening or a lessening of the protection of the public or, indeed, of the appellant. As a non-lawyer, I understand that what has been striking in the way that the courts have interpreted judicial review recently is that—in a national security context and, specifically, in relation to control orders—courts have increasingly approached judicial review in a way that is substantively similar to that of an appeal process. When considering the control order in the MB case, the Court of Appeal made it clear that it could substitute its own view for that of the Minister when deciding whether reasonable suspicion existed. We had expected the court to take a similar approach in relation to asset freezes, which would bring judicial review and appeal, in substance, close together in this area. In part, the approach we took in the 2010 Act was to formalise, in effect, what the courts were moving towards. It is better if, in reality, the substance of what the courts were moving towards was an appeal, but we actually put in the legislation, as Parliament has seen fit to do, a full appeals process and then the court rules follow from that. The noble and learned Lord’s question, in a sense, falls away because the courts have been bringing the two processes increasingly closer together.

On the role of the European Court of Human Rights, we do not think that the rules we are looking at here and the thresholds for suspicion and belief will mean any material change as to whether, why and how the ECHR can intervene in any particular case. Without commenting on the discussion on these issues over the weekend, I do not think that anything we are doing in the Act or the rules which we are considering today touches materially on those concerns.

I hope I addressed the less than perfect drafting in my opening remarks. The first of the two issues is a stylistic point that is an omission, but it does not have substantive effect. In the second case, it is clear from the context that the words, “the application” refer to the application to the Court of Appeal and so I think there is no question of possible misinterpretation of the statutory instruments and no substantive risk of being challenged in court. In any event, it will be up to the Civil Procedure Rule Committee to be able to amend the rules should that committee deem it necessary.

I hope I have been able to deal adequately with the noble and learned Lord’s points as I believe it is important that these rules are approved today. They provide the framework for those designated under the Terrorist Asset-Freezing etc. Act 2010 to challenge their asset freeze designation under the new appeals procedure. The court rules will ensure that rigorous scrutiny is given to the relevant decision, while at the same time protecting sensitive material from damaging public disclosure. Therefore, I commend these rules to the Committee.

Motion agreed.

Rules of the Court of Judicature (Northern Ireland) (Amendment No. 3) 2010

Monday 7th February 2011 Grand Committee

Considered in Grand Committee

17:34

Moved By

[Lord Sassoon]

That the Grand Committee do report to the House that it has considered the Rules of the Court of Judicature (Northern Ireland) (Amendment No. 3) 2010.

Relevant documents: 14th Report from the Joint Committee on Statutory Instruments.

Motion agreed.

Control of Donations and Regulation of Loans etc. (Extension of the Prescribed Period) (Northern Ireland) Order 2011

Monday 7th February 2011 Grand Committee

Considered in Grand Committee

17:34

Moved By

[Lord Shutt of Greetland]

That the Grand Committee do report to the House that it has considered the Control of Donations and Regulation of Loans etc. (Extension of the Prescribed Period) (Northern Ireland) Order 2011.

Relevant documents: 13th Report from the Joint Committee on Statutory Instruments

[Lord Shutt of Greetland]

My Lords, the order before the Committee today will extend the period in which donations and loans to political parties and others in Northern Ireland must be held confidentially by the Electoral Commission. Noble Lords will be aware that political parties across the United Kingdom must report donations and loans received above certain thresholds to the Electoral Commission.

In Great Britain, the Electoral Commission is under a duty to publish details of these donations. However, due to ongoing concerns about intimidation in Northern Ireland, the Northern Ireland (Miscellaneous Provisions) Act 2006 made provision for details of any donations reported by Northern Ireland political parties to be held confidentially by the commission.

The 2006 Act provided that confidentiality should apply for only a temporary period—referred to in the Act as “the prescribed period”—and would expire on 31 October 2010, unless an order was made by the Secretary of State to extend that. Noble Lords may recall that this House approved a short extension of the prescribed period shortly after the election so that the provisions would expire on 1 March 2011. This was to allow for full consultation to take place on whether the time was right to move to full transparency.

A full 12-week consultation commenced shortly after this extension was approved and concluded on 25 October 2010. A total of 26 responses were received, mainly from members of the public, political parties and the media. Overall, the consultation demonstrated strong support from members of the public and journalists for full and immediate transparency. This was also supported by some political parties, including Sinn Fein, the Alliance Party and the Green Party. The Ulster Unionist Party and Democratic Unionist Party supported the extension of the current arrangements due to ongoing security concerns. The SDLP agreed that donor identities should be kept confidential, but believed that work should be undertaken to bring more transparency to the existing process.

The Electoral Commission also believed that identities should continue to be kept confidential if the Government concluded that the time was not yet right to move to full transparency, but agreed that there was room for greater transparency in the existing arrangements.

The consultation demonstrated that there is strong public support for full and immediate transparency, but also that concerns remain about the possible intimidation of donors. Noble Lords will be aware that, by its very nature, it is difficult properly to quantify levels of intimidation. Nevertheless, there has been a deterioration in recent years in the overall security situation in Northern Ireland. In particular, recent reports of the Independent Monitoring Commission have indicated an increase in paramilitary beatings and shootings.

It is very likely that this rise in violent activity has been accompanied by an increased risk of intimidation and that there would be a threat to the safety of those making donations to Northern Ireland parties if their identities were made known. The Government have therefore reluctantly concluded that the time is not yet right to move to full transparency and that it is necessary to bring forward the order to extend the prescribed period before us this evening.

However, I wish to reassure noble Lords that we have listened carefully to the expressions of support by the general public for more transparency in Northern Ireland. Since the consultation ended, officials have examined the possibility of bringing more transparency to the current process within the existing legislative framework. The Government are particularly concerned that the 2006 Act does not just protect donor identities, but prohibits the release by the commission of any details at all relating to a donation.

We had hoped that the order-making powers in the 2006 Act might allow for secondary legislation to be made to relax the current strict requirements, so that some details of donations and loans might be released—for example, details of the recipient, the amount received and when the donation was made. However, following closer examination, questions have arisen about the extent to which the 2006 Act would permit that. Nevertheless, officials will continue to explore the possibility of further secondary legislation being made to provide for increased transparency. If that is not possible, we will seek to make such provision through primary legislation when a suitable legislative vehicle can be found.

Noble Lords may also be aware that the consultation paper sought views on whether donations and loans made during the prescribed period should be kept confidential when the prescribed period ends. Currently, the 2006 Act provides that details of such donations and loans will be released when the prescribed period expires. Again, the majority of respondents advocated full and immediate transparency, including the release of details of past donations and loans when the prescribed period ends. However, the UUP, DUP, SDLP and Electoral Commission strongly opposed the release of that information. They believe that many donors and recipients did not properly appreciate that the 2006 Act provided for the eventual release of the information and donated in the belief that their identities would not be released, even after the prescribed period had ended. In light of those concerns, the Government will seek a suitable legislative vehicle to make provision to ensure that the information is not released when the prescribed period expires.

In summary, it is with great reluctance that the Government bring forward this order to extend the existing arrangements. We remain committed to achieving complete consistency between Northern Ireland and the rest of the UK when it comes to transparency in party funding. However, we cannot ignore the security risks that might arise if donor identities are made known at this time and the implications that it would have on the funding of political parties in Northern Ireland and the political process there more generally. Nevertheless, I hope that noble Lords are reassured that work will continue on doing everything possible to bring greater transparency to the existing arrangements.

[Baroness Royall of Blaisdon]

My Lords, I am grateful for the clear explanation from the Minister in what is rather a complex area. We note the strong support for lifting the exemption in place in Northern Ireland; I think that 77 per cent of respondents suggested that they were in favour of that. However, despite the enormous progress in Northern Ireland over recent years, we appreciate that the political situation there continues to be sensitive and that caution is required.

It is interesting that 12 per cent of respondents—the same number who supported the Government’s position of no change—supported option 3. As noble Lords know, that option is the current exemption with some modifications—for example, publishing the amounts received, the recipient, and whether the donor was an individual or a company. In principle we support greater transparency in the Northern Ireland political and electoral system but, given the serious and difficult security situation, we understand that a responsible Government need to exercise caution. We consider that option 3, which was canvassed in the Northern Ireland order consultation paper, struck a good balance between protecting the security of the people participating in the political process by providing donations and loans, and the expectation of the public to have transparency in the electoral system.

This is an important order so, as the Committee would expect, I have several questions to put to the Minister. He gave various reasons for continuing the current exemption unamended, but I wondered why the Government happened on two years. What is the rationale for that? He rightly mentioned the intimidation that is taking place. What are the Government planning to do to reduce the risk of intimidation that currently prevents the details being released? Will the Government use the two years’ extension to develop and implement a more transparent system for political donations and loans of the kind considered under option 3?

Paragraph 12 of the Government’s response to the consultation document said that the department would examine the possibilities of making option 3 transparency changes through secondary legislation. It would be helpful to have further clarification on that point. What options and types of transparency changes is the department looking at? What is the originating primary legislation power that would enable such secondary legislation to be made? What is the timeframe for this work? Finally, will the public be consulted on the possible options?

I hope that noble Lords will forgive this raft of questions, but they are very important. I look forward to the Minister’s response.

[Lord Smith of Clifton]

My Lords, I, too, thank my noble friend for introducing this order. Bearing in mind that the Belfast agreement took place in 1998, it is very depressing that here we are and we cannot have normal conditions obtaining in Northern Ireland. I take some heart from the fact that it is only a two-year extension, by which I mean, pace the noble Baroness, Lady Royall, that a signal has been given to the political parties that this is the last time that the order will be continued in its present form. I hope that it will lapse. As the noble Baroness, Lady Royall, has said, there have been great steps forward—after a very irregular start since the Belfast agreement when we had the suspension of Stormont—but we should look forward to normal transparencies obtaining.

To get a sense of the order of magnitude, I should like to ask my noble friend if for the past financial year he can indicate the totals of donations by party. While I appreciate that for the current year we might see an increase in donations because it is an election year, it will be nevertheless very interesting to have it on the public record to see at what sums we are looking—whether they are trivial or of some substance. I should be grateful for that information.

[Lord Bew]

I, too, thank the noble Lord, Lord Shutt, for introducing this order. Like the noble Lord, Lord Smith, I have listened to his words with a degree of disappointment. It is right to say that the limits on the progress that has been made in Northern Ireland—remarkable though that progress has been—are shown in that we are still talking about these exemptions and derogations from broader UK electoral law and the transparency of such law.

I am not surprised by the words of the Minister and the proposal put today because the balance of opinion, to my surprise, in Northern Ireland over the past year has been very cautious about changing existing regulations. It has become clear for some time that the Government, if they were to respond to what they were hearing, would have to be relatively cautious in their response. But, having plagued the noble Lord, Lord Rooker, when he was at the Dispatch Box as long ago as 2007 on this matter and having, I think, plagued the noble Baroness, Lady Royall, on this matter, it would be hypocritical of me not to record a note of disappointment. I know why the Government have reached this conclusion. I know that they may have been slightly surprised by the degree of concern on the part of the political parties. But having received that, any responsible Government have to pay attention to it.

I simply make the point that Northern Ireland last year was convulsed by public scandals. One of the issues that lay in the background was that of the relationship of certain businessmen to certain political parties. In the rest of the United Kingdom, such matters would be easily sorted out and put into the public domain, but in Northern Ireland we do not know where we stand. That is a difficulty and the step that the Minister is taking is regrettable, if understandable.

The noble Lord, Lord Smith, says that he hopes that there is a two-year limit and that the provision might just lapse in two years. However, having been at this now for four years, I am not quite so secure in that assumption. I hope that he is right. Therefore, I would like to be reassured that the Minister is as clear as he appears to be that the department is looking carefully at work to deal with this by secondary legislation and, if it cannot be done by that method, that primary legislation will be introduced that at least loosens some of the provisions and gives greater openness. I have an uneasy feeling that, in the short term, that will be the best that we can do; I very much hope that I am wrong. Therefore, it is important that the Northern Ireland Office looks carefully at what can be done in certain areas, because I have a feeling that—even two years from now—we will not be looking at the simple lapsing of this legislation.

[Lord Shutt of Greetland]

My Lords, I thank the three noble Lords for their contributions and will endeavour to respond accordingly. In terms of the Government’s position, the noble Baroness, Lady Royall, made the helpful point that she understands where we are at present. She spoke very much about what she referred to as option 3 of what was put forward in the consultation. She asked why we had said two years. The legislation envisaged extensions of the prescribed period for up to two years, so that is the figure that one can go to and no further without another order. She asked what the Government were doing to reduce intimidation. The Government remain committed to doing everything possible to reduce violent activity in Northern Ireland. We continue to work with the Executive and security agencies to reduce overall paramilitary activity, which should lead to a corresponding decrease in intimidation.

The third point that the noble Baroness raised was about the use of the two years. Clearly, work has to be done—this reverts to the point made by the noble Lord, Lord Bew—on either a new order or primary legislation before too long, because of the issues that noble Lords agreed on, I think, about not releasing past information on the basis that people made donations in the belief that the information about them as donors was not to be released. That would have to be dealt with. Similarly, there could be a system whereby it was not exposed if—for example—the noble Lord, Lord Bew, gave £10,000 to a party today, but the facts that there were £10,000, a recipient and a date could be given. As we understand it, that cannot be done under present legislation.

The noble Baroness, Lady Royall, referred to the originating power, which is in the Northern Ireland (Miscellaneous Provisions Act) 2006. I have not got a note about whether there will be a fresh period of consultation. That would be in the spirit of what happens in these matters but there is a sense in which what is planned is clear without further consultation, in that it would be about numbers, dates and the recipient party but not the name of the donor. Perhaps this could be done without a further consultation period, but I do not want to close the door on consultation. That copes with the points.

My noble friend Lord Smith of Clifton found it depressing, which I understand, and I wish I was not moving this order. I wish it were rather different, but this is the way it is. This is advice which is given about the security situation in Northern Ireland and what it is right to do. Like him, I would sooner be looking forward.

Over the weekend, I dug out what is on the public record as regards what the parties publish because the parties still have to produce their accounts to be registered with the Electoral Commission. I give this information, which is in the public domain, with one or two health warnings. This relates to the calendar year. All the parties that I shall mention have year ends in December 2009 and, therefore, that does not include what might have been a different year in 2010, when there was a general election.

Five of the parties—the DUP, Sinn Fein, the UUP, the SDLP and the Alliance Party—have between them 186 accounting units, no doubt constituency associations and so forth. Having looked at what is on record with the Electoral Commission, in the accounting units, there do not appear to be hefty figures labelled as donations. Looking at what is shown by the Northern Ireland-wide parties one sees that the DUP’s income was £348,000 with donations of £126,000; Sinn Fein’s income was £1.177 million and its donations £462,000; the UUP’s income was £392,000 and its donations £21,000; the SDLP’s income was £398,000 and its donations £83,000; the Alliance Party’s income was £151,000 and its donations £16,000; the PUP’s income was £107,000 and its donations £150; the Green’s income was £47,000 and its donations £7,000; the income of the Conservatives in Northern Ireland was £215,000 and its donations £204,000; the Labour Party’s income was £1,450 and it had no donations.

Those figures are available for anyone to look at on the website of the Electoral Commission. However, I cannot vouch that each party has put a donation in its own accounts as a donation which has been seen as recordable on the other side of the book with the Electoral Commission. Many of us might see a heavy subscription as a donation, but it might be called a subscription. There are certain health warnings on that, but it gives an idea of the fact that the Northern Ireland-wide income of the parties in that year was just over £2.8 million and the amount that is listed as donations is just over £900,000. Those are the figures and they give one a feel for the sort of numbers we are talking about.

I think I have covered the points made by noble Lords and I hope that the order will be accepted.

[Baroness Royall of Blaisdon]

Before the Minister sits down, I want to press him on one question on the option 3 transparency changes that might or might not be brought forward in secondary legislation. What sort of timeframe are we talking about for such secondary legislation?

[Lord Shutt of Greetland]

I cannot be absolute about this. All I can say is that because the extension ends on 1 March, clearly, moves have to be made now to move that further forward. As I understand it, people are working on this within the Northern Ireland Office because there is a general view that at least there will be an element of greater transparency. I certainly hope that we do not have to wait long to see if this can be done without primary legislation. It might be rather more difficult if we have to look at primary legislation.

Motion agreed.

Committee adjourned at 6 pm.

House of Lords

Monday 7th February 2011 Lords Chamber

Monday, 7 February 2011.

14:30

Prayers—read by the Lord Bishop of Wakefield.

Introduction: Lord Stephen

Monday 7th February 2011 Lords Chamber

14:37

Nicol Ross Stephen, Esquire, having been created Baron Stephen, of Lower Deeside in the City of Aberdeen, was introduced and took the oath, supported by Lord Steel of Aikwood and Lord Wallace of Tankerness, and signed an undertaking to abide by the Code of Conduct.

Agriculture: Dairy Industry

Monday 7th February 2011 Lords Chamber

Question

14:43

Asked by

[The Lord Bishop of Wakefield]

To ask Her Majesty’s Government what assessment they have made of the impact of the recent low prices for milk in the major supermarkets on the United Kingdom dairy industry and its long-term sustainability.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)]

My Lords, there is no simple link between supermarket retail prices and farm-gate prices. Producers in dedicated supply groups for individual supermarkets tend to receive the highest prices for their milk. The Government believe that the market must drive price levels. It is important that large retailers cannot abuse power by transferring excessive risks or unexpected costs onto their suppliers. We therefore propose to establish a groceries code adjudicator to monitor and enforce the groceries supply code of practice.

[The Lord Bishop of Wakefield]

My Lords, I thank the noble Lord for his answer, but the situation has become even more serious. Last Friday, 4 February, the NFU published a report noting a £330 million gap between the price paid for milk and the cost of production. It is ironic that many demonstrations outside supermarket depots belong to a company that was once a co-operative of northern dairy farmers. In the light of that, will Her Majesty’s Government urgently support the European Commission’s dairy package to change the way milk contracts and supply chain contracts are negotiated?

[Lord Henley]

My Lords, I ought to make it clear that prices have in fact gone up somewhat. The average price in December was 26.4 pence per litre, which was a 5.8 per cent increase on a year ago. However, I appreciate that other prices for dairy producers have gone up just as fast and that they are facing quite severe problems. As regards the work being done in the EU, I think that the right reverend Prelate referred to the High Level Group on dairy. We will certainly be making appropriate comments on that and feeding in our views to what the Commission is proposing.

[Lord Lea of Crondall]

As I understand it, there are 17,000 dairy farms in this country and the average dairy farm gets a subsidy of £30,000 a year, which by my arithmetic is £500 million. There are 2 million cows, so each cow gets £250. I am sure the NFU will say that the cow does not get it and that the farmer does not get it. So who does get it? Could it be that the processors get it, the supermarkets get it, or the consumer gets it? Somebody must get it, so should there not be something like the Office for Budget Responsibility or the new adjudicator to clarify analytically who does get it?

[Lord Henley]

My Lords, I cannot confirm or deny the figures produced by the noble Lord, but I can give him an assurance that subsidies go to the farmers and not to the cows as I imagine that the cows do not have bank accounts.

[Baroness Parminter]

Does the Minister agree that a 3,700-cow mega dairy in Lincolnshire will be as much of a nail in the coffin for the competitiveness of small British dairy farmers as the unopposed arm lock of the supermarkets over farmers with their milk prices?

[Lord Henley]

My Lords, I am not going to comment on individual applications by individual farmers or farming groups for their own planning consents, but the point that should be made in terms of our own interests in this is that the welfare of the animal must always be supreme. We believe that with proper stockmanship and so on, the welfare of animals can be maintained on big farms as well as on small farms.

[Lord Sewel]

Can the Minister clarify into which schedule of the Public Bodies Bill the groceries adjudicator, or whatever it is, will be placed?

[Lord Henley]

The noble Lord will be pleased to hear that the groceries code adjudicator will not be in that Bill, but in a separate Bill being introduced by colleagues in the Department for Business, Innovation and Skills. I look forward to the Bill coming before this House in due course.

[The Countess of Mar]

My Lords, the noble Lord hinted that farmers who act co-operatively succeed in getting better prices for their milk than those who act alone. As the British farmer has such a poor record of co-operating with his fellow farmers, what will Her Majesty’s Government do to encourage farmers in order for them to get a better price for their milk?

[Lord Henley]

I am not sure that the noble Countess is in fact correct. The highest prices being paid for milk at the moment are coming from Wiseman Dairies with its direct contract for Tesco and the lowest current prices are from one of the farmers’ co-operative groups. I do not know whether the two are connected, but certainly it is a matter for individual farmers to decide whether they want to act together, not one for Her Majesty’s Government.

[Lord Grantchester]

We welcome and take encouragement from the fact that the Government are continuing with the previous Administration’s Dairy Supply Chain Forum as a mechanism to keep in close contact with the industry. Does the Minister agree that the dairy market is not dysfunctional, that the industry’s prospects are positive and that it is undertaking significant investment with a value added strategy? Price rises are feeding through what are now much better integrated relationships. Does he further agree that the problems facing dairy farmers are more the result of volatility in input costs rather than from supermarkets? I declare my interests in dairying.

[Lord Henley]

My Lords, I can agree with much of what the noble Lord has said. Obviously, individual dairy farmers are facing problems, and we saw a decline of 4.7 per cent in their number last year. But as the noble Lord said, prices are increasing somewhat at the moment, even though there is considerable volatility in the other prices dairy farmers have to face in terms of their milk production.

[The Lord Bishop of Exeter]

My Lords, I am delighted to know that the Government are still committed to bringing in a Bill to establish the office of the groceries code adjudicator. Given the seriousness of the situation that we face in dairying and other aspects of farming at present, when is that Bill likely to be brought before the House?

[Lord Henley]

My Lords, my understanding is that there is a good chance that it will start in another place first some time this Session, but I cannot give any precise timing at this stage.

[The Earl of Sandwich]

My Lords, the adjudicator was going to be situated in the Office of Fair Trading. Can the Minister confirm that the Office of Fair Trading is to be abolished? In which case, the adjudicator will have to be situated in the Competition Commission, which is also to be abolished.

[Lord Henley]

My Lords, I am not sure at the moment where the groceries code adjudicator will be sitting, but I can assure the noble Earl that he will sit somewhere where he can do the job that he will be asked to do as effectively as possible.

[Lord Phillips of Sudbury]

My Lords, will the Minister also look at the impact of predatory pricing on small, local convenience shops, which make a great contribution to their communities?

[Lord Henley]

My Lords, that is obviously a matter that ought to be looked at but I think everyone should welcome the fact that supermarkets deliver low prices not only for milk but for other matters as well. The consumer would welcome that.

International Development Aid

Monday 7th February 2011 Lords Chamber

Question

14:51

Asked by

[Lord Sheikh]

To ask Her Majesty’s Government what action they are taking to focus international development aid on fragile and conflict-affected states.

[Baroness Verma]

My Lords, focusing UK aid on fragile and conflict-affected states is central to our development efforts and makes a significant contribution to our national security. All UK bilateral and multilateral aid is currently being reviewed, ensuring a greater focus on results and maximising the impact of every pound spent.

[Lord Sheikh]

My Lords, I thank the Minister for that response. What discussions has her department had on improving the interface between different government departments to support fragile and conflict-afflicted states so that they do not become a future security risk? Can she also explain what the Government are doing to assist these states in the achievement of the millennium development goals?

[Baroness Verma]

My Lords, the Government’s strategic defence and security review set out a clear vision of enhanced UK work on upstream conflict prevention. Building on this, DfID, alongside the FCO and MoD, is taking the lead in developing the Government’s new Building Stability Overseas strategy to be published in the spring. This strategy will set out how we will use development, diplomatic and security tools in an integrated approach to tackling conflict and instability overseas. No fragile state has yet achieved a single millennium development goal.

[Lord Tomlinson]

My Lords, is the Minister aware that her statement about getting value for money for every pound spent from the development budget will be very welcome? Can she tell us which precise, ring-fenced developmental objectives were met by the transfer of £1.8 million from the DfID budget to finance the visit of his Holiness the Pope?

[Baroness Verma]

My Lords, the money was not taken out of ODA but was a part of DfID’s budget. The work that the Pope and the Catholic Church do overseas is welcomed; they do a lot of work through educational and medical care across the world. It was therefore not ODA money but came out of the DfID budget.

[Lord Roberts of Llandudno]

My Lords, I am sure that the whole House welcomes the fact that all parties here are aiming for the target of 0.7 per cent by 2013. As we are all going in the same direction, does the Minister agree that there should be even more consultation, even at a ministerial level, on how our overseas aid is targeted and spent?

[Baroness Verma]

My Lords, my noble friend raises a very important point. We are carrying out the bilateral and multilateral reviews and having a great deal of consultation with a great many organisations precisely to ensure that all our aid is focused on getting the best results for the poorest people in the world.

[Lord Hannay of Chiswick]

My Lords, does the Minister agree that in failing or failed states, where often straightforward development projects are impossible to mount, it is entirely proper, as a precursor to resuming development, to provide money to help these states? Is that view shared by the Development Assistance Committee of the OECD?

[Baroness Verma]

My Lords, as the noble Lord is aware, our goals are common across the OECD and our multilateral partners, and our aim is to ensure that our investment—every penny that we spend—is directed towards ensuring the best outcomes. He is aware of that.

[Lord McConnell of Glenscorrodale]

My Lords, one year ago this week the previous Government launched the Civilian Stabilisation Group, allowing 1,000 UK citizens to be deployed to fragile and conflict-affected states. The current Government have promised to expand the work of that group. Can the Minister confirm for us today that the budgets will be available for the new stabilisation response teams and that the UK will continue to press the United Nations to make its own ambitious proposals on the international response for civilian secondments in a way which will enhance and add value to the UK’s own Civilian Stabilisation Group?

[Baroness Verma]

I should first like to pay tribute to the great work that the noble Lord did when he was a Member of another place. I should also like to congratulate him on the work that he is continuing to do to ensure that the relationship between Scotland and the African countries is maintained. The United Nations is of course one of our key partners; but, as I said, we are going through the multilateral and bilateral review process. This process will ensure that we are able to target and focus all our aid budget on the programmes and countries that need it the most and where the outcomes are best achieved.

[Lord Naseby]

Is my noble friend aware that DfID’s practical help in demining in Sri Lanka has been enormously welcome and pretty successful? But as the refugees—more than 270,000 of them—have nearly all now returned home, the crying need is for infrastructure, particularly in the health field. Will she, with DfID, look at the possibility of building at least one hospital in the northern region of Sri Lanka?

[Baroness Verma]

My noble friend is absolutely right about the work that DfID has done to try to reduce the suffering caused by landmines and the explosive remnants of war. As I have said several times over, we are coming towards the end of our reviews. These really can give us a greater focus on where our aid will go. However, healthcare and education are key to supporting the work that we do.

[Baroness Kinnock of Holyhead]

My Lords, how will Her Majesty’s Government respond to the request made only last week by the International Development Select Committee for a list of exactly which countries will qualify as fragile and conflict-affected states, which will therefore be eligible to receive increased funding?

[Baroness Verma]

My Lords, the noble Baroness raises an important point. She will also be aware that the reviews are coming to a conclusion. They will be able to lay out all the questions that the Select Committee raised as well as the ones that she has asked.

[The Earl of Listowel]

My Lords, can the Minister say what progress the Government are making towards improving the education of girls and young women in fragile states?

[Baroness Verma]

The noble Earl is absolutely right about education for girls and women. Women and girls are at the heart of all the work we are doing, particularly in countries such as Afghanistan and Pakistan which will be our key priority. The Secretary of State has therefore said that 30 per cent of the aid budget will be focused on our fragile states.

Disabled People: Disability Living Allowance

Monday 7th February 2011 Lords Chamber

Question

14:58

Asked by

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government whether individuals currently receiving disability living allowance who have invested money and payments in aids and adaptations will be disadvantaged as a result of the proposals in chapter two of the consultation paper on disability living allowance reform published in December 2010.

[Baroness Gardner of Parkes]

My Lords, I beg leave to ask the Question standing in my name, and I declare an interest as I have disabled family members.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, the proposed assessment for personal independence payment is not intended to disadvantage individuals but to ensure that the benefit is focused on those who are least able to live independent lives. We therefore think it right that it takes greater account of the successful use of aids and adaptations than DLA does. We know that this is a complex issue, and that is why we are consulting on this point.

[Baroness Gardner of Parkes]

My Lords, I thank the Minister for that reply and I am aware of the consultation. Under item 27 of the consultation, it would appear that those who have used their DLA to improve their lot might be disadvantaged. I would like him to agree with me that it is very important to encourage people to help themselves and remain useful members of society and that no perverse incentive should be brought into this process.

[Lord Freud]

It gives me pleasure to say that that is the exact purpose of this assessment. We want to make sure that the money that we do have is well directed to supporting people to have independent lives. It would clearly be perverse if people were supported to live an independent life and that support was then removed when they still needed it. I cannot envisage that that situation would develop.

[Baroness Campbell of Surbiton]

My Lords, will the Minister tell us how the Government expect to achieve the projected savings of £1 billion by 2015 when the highly regarded disability charity Disability Alliance estimates that 823,000 disabled people will lose vital DLA support in order for the Government to meet that target?

[Lord Freud]

My Lords, as the noble Baroness pointed out, the target is to reduce the spending on DLA by 20 per cent by 2014-15. But that is against a projection of a benefit that is, frankly, out of control. The actual figure in that year will basically come down to the level that it was in 2009-10, which is just below the £12 billion mark.

[Baroness Hollis of Heigham]

My Lords, the consultation paper proposes that the three rates of DLA should be so-called “simplified” into two rates, which presumably implies—as the noble Baroness, Lady Campbell, suggested—the scrapping of the lower rate of DLA care. Lower-rate DLA care goes to those with significant need of help or supervision. Does the Minister agree with the noble Baroness that if the Government go ahead with that, it will take almost £900 million—nearly £1 billion—out of the incomes of disabled people, some of whom are among the poorest in this country? Is that what he means by saying that we are all in it together?

[Lord Freud]

My Lords, I disagree entirely with that premise. The personal independence payment is a new assessment of people’s needs and is designed to help people to live independent lives and to give them mobility. To that extent there can be no presumption about what is happening to existing rates. We will set these rates based on people’s requirements to live independent lives.

[Lord German]

My Lords, it seems to me that the consultation paper can be read in one of two ways. Can the Minister tell us whether the purpose of the PIP is to extend the level of adaptations and aids that will be available to people—to facilitate greater access and ensure that everyone who needs the payment can get it?

[Lord Freud]

My Lords, I can respond to that question positively in the sense that times have moved on: adaptations and aids have moved on since the DLA was introduced, and we are looking at a different environment in which people can be helped to live pretty normal lives with those adaptations. It is important that we have an assessment process and a personal independence payment that reflect what is really happening to people’s lives.

[Baroness Wilkins]

My Lords, does the Minister agree that the extra costs related to lack of mobility are far wider than just moving around—not least the need for extra heating, the extra wear and tear on clothes and the need to employ others to do decoration or repairs in the house and to look after the garden? How does this make the provision of aids relevant in the assessment of extra costs?

[Lord Freud]

My Lords, the noble Baroness is right that we need to have a pretty broad view on what mobility implies. One of the big differences between the personal independence payment and DLA is that the personal independence payment looks at the person’s ability to plan and execute a journey, not just at their physical capacity. One of the big differences with the personal independence payment is that it puts a lot more emphasis on mental competences compared with physical ones, or it raises those competences in relative terms. Many of those adaptations are clearly for physical requirements; others, the ones to meet mental requirements, will be taken much more into account.

[Lord Rix]

My Lords, the noble Baroness, Lady Hollis, has already referred to the statement, “We’re all in this together”. In that statement, were the Government including the 80,000 people with disabilities living in residential care who are going to lose the mobility component of their DLA, or were the Government simply thinking that such a valuable aid to so many vulnerable people was a total waste of taxpayers’ money?

[Lord Freud]

My Lords, we are taking a very close look at the mobility requirements of people in residential care. The existing arrangements are pretty patchy; the payments are used for different purposes in different places and are often pooled in a way that they are not designed for, in a very complex regulatory framework. We will be looking very closely, as part of the consultation exercise, at what the best form of support should be for people in residential care in this way.

[Lord McKenzie of Luton]

My Lords, following on from that question, has the Minister read the evidence in the report from 27 leading disability groups entitled, Don’t Limit Mobility? The report points out that mobility needs tend to be factored into care packages only to meet specific needs in the community care assessment and not generally to meet individuals’ personal mobility needs. Do the Government therefore accept that the proposal to withdraw the mobility component of DLA for those in residential care because of double funding is based on a false premise, is simply wrong and should be withdrawn?

[Lord Freud]

My Lords, I have indeed read with great interest that particular piece of research. We are talking to the lobby about it and are very interested in some of the data behind it. We are in the process now of collecting a lot of information about what is really happening. It is a very fragmented area in terms of regulatory support and practice, and when we have that information I will be very pleased to share it with the House.

Sudan

Monday 7th February 2011 Lords Chamber

Question

15:07

Asked By

[Baroness Cox]

To ask Her Majesty’s Government what is their assessment of recent developments in Sudan.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, the Southern Sudan referendum is a momentous step towards the implementation of the comprehensive peace agreement. A formal announcement of results is expected later this afternoon. President Bashir has today issued a decree accepting the referendum result, which provisionally shows an overwhelming majority for secession. We welcome the continuing commitment of the Government of Sudan. We will support north and south as they work on the remaining comprehensive peace agreement issues. We continue to support efforts to establish a lasting peace for Darfur.

[Baroness Cox]

My Lords, I thank the noble Lord for that very warm and encouraging reply. Would he agree that it is appropriate today to send very best wishes to the peoples of Southern Sudan as they celebrate that overwhelming mandate for independence announced today and to congratulate all who worked very hard to make arrangements for the referendum in very challenging circumstances? Is the Minister aware that the people living in the Nuba mountains or southern Kordofan were offered only a consultation? When I was there last year they said that they were so worried for their future under Khartoum that they might have to resort to war to fight for their own freedom, which would clearly be very destabilising for Southern Sudan. What is being done to address the needs of the people of the Nuba mountains, and especially their concerns about religious freedom, humanitarian aid and their African culture?

[Lord Howell of Guildford]

Certainly we welcome all the congratulations coming from around the world on what is the birth of a new nation. The noble Baroness is absolutely right about that, and she is right to point to the outstanding issues that remain. Not all problems have been solved by this referendum, particularly in relation to the areas that have worries about their relationship with the north while they remain politically under northern control. I think that she mentioned—if she did not, she will forgive me—southern Kordofan and the Nuba mountain regions. There are also the Blue Nile regions and the region of Abyei. All those regions desire to have their rights respected—their property rights respected and their political impulses respected—and all of them have yet to see a way through the necessary consultations. Those consultations will be within the framework of the comprehensive agreement, and we will work very hard with the United Nations to ensure that all the rights needed are respected.

[Baroness Kinnock of Holyhead]

My Lords, will the Minister tell us exactly what part the UK is playing in the negotiations taking place to deal with Sudan’s debts of $35 billion? Is it fair that south Sudan should inherit the debt which was incurred by the north of Sudan? Is the Minister aware of new figures which reveal that up to 90 per cent of the Sudanese debt owed to the UK is actually interest?

[Lord Howell of Guildford]

These are matters that have not yet been settled. As I said just now, there are a number of practical issues that have to be worked out. I cannot give the noble Baroness the precise detail of where the financial discussions have got to, but obviously, in as far as we are affected in the way that she described, we shall have to work out the best and fairest arrangement between the two countries. We think that these things can be done, but we have certainly not got to the point of solution yet.

[Lord Alton of Liverpool]

My Lords, I welcome the historic announcement that has been delivered from the Dispatch Box today. However, will the Minister touch again on the situation in Abyei to which he referred a moment ago, and on the Foreign Secretary’s recent statement reflecting on the violence between the Misseriya tribesmen and the Sudan People’s Liberation Army and the massive influx of armaments and weapons into that area? Does he agree that a reduction in the armaments levels and the removal of the militias from those areas is perhaps a prerequisite for a lasting peace? Can he also tell us something about the architecture which will be put in place to bring about the right of self-determination of the people of Abyei, who have been excluded from the comprehensive peace agreement and from the referendum?

[Lord Howell of Guildford]

I cannot offer the noble Lord an immediate pattern of solution to the situation. As he knows well, and as your Lordships will know, there has been no referendum in that area. There has been a demand for the people of that area to have a say. There are some quite substantial implications in terms of oil resources in the area—about 10 per cent of the oil resources of Sudan as a whole. I can only repeat what I said earlier. We will work very closely with the UN to see that consultations within the framework of the CPA are pushed forward and that the wishes and rights of the people of this region, like those of the other regions I mentioned, are fully respected.

[Lord Avebury]

My Lords, will the Minister confirm that the Blue Nile consultations are going ahead very well but that in southern Kordofan they have not even started? Is there not a difficulty in holding a consultation in a state where the governor is wanted by the International Criminal Court?

[Lord Howell of Guildford]

Yes, there are such difficulties, and I do not think that they can be disguised. As I mentioned earlier, there are difficulties in south Kordofan, the Nuba mountains and the Blue Nile region, and we will have to work very hard to see those overcome. I am personally encouraged, as I hope that your Lordships and my noble friend will be, by the tone taken in Khartoum about the outcome of the referendum and by the very substantial willingness of all parties to reach agreement on the very difficult boundary and border issues which any partition—any secession—is bound to raise. These were certainly raised.

Budget Responsibility and National Audit Bill [HL]

Monday 7th February 2011 Lords Chamber

Third Reading

15:13

[Baroness Anelay of St Johns]

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Budget Responsibility and National Audit Bill, has consented to place her prerogative, so far as it is affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

A privilege amendment was made.

Motion

Moved by

[Lord Sassoon]

That the Bill do now pass.

[Lord Eatwell]

My Lords, the passage of the Bill through your Lordships’ House has been an excellent example of the importance of this House as a scrutinising and revising House. On behalf of these Benches, I thank the Treasury Bill team; Miss Jessica Levy from my office, who managed most of the relationship with the Bill team; and the Ministers, notably the noble Lord, Lord Sassoon, for the way in which they have approached the discussions and constructive negotiations on the content of the Bill.

The Office for Budget Responsibility established by the Bill is a peculiar institution. It is both outside government and of government. We need to ensure that legislation provides a framework for its independent operation as far as possible. That is what, working together, we have managed to do. We have clarified the role of non-executives, we have removed the statements in the Bill that seemed to qualify independence, we have enabled the OBR to consider issues of national risk, and we have enabled a process of external review of operations.

A number of factors remain. We on this side of the House are not entirely content with the budgetary provision for the OBR, or with the role of the charter as a qualifying agent that qualifies the OBR’S independence and instructs it.

[The Countess of Mar]

May I ask the Leader of the House whether it is normal to make a speech like this on the Question whether the Bill do now pass?

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

It is unusual, but it is in order. I think that the noble Lord, Lord Eatwell, is about to wrap up his remarks, but he was being constructive and helpful.

[Lord Eatwell]

I am indeed. It is appropriate to thank people, when a Bill has gone through in this co-operative manner, for what has been achieved.

I know that the Government think that this side of the House has taken a somewhat belt-and-braces approach to the independence of the OBR; I am sure that Sir Humphrey, or perhaps Sir Nicholas, does. However, it can do no harm to the OBR’s reputation to have a belt in place when the braces fail.

It is the Government’s responsibility now to ensure that this important experiment in economic governance is a success. We on this side wish Mr Chote and his team well.

[Lord Myners]

My Lords, my words are very much in the same direction as my noble friend’s. This has been a superb example of the House working well. We had long and detailed discussions in Committee. The Minister listened attentively and reserved his position, but came back with constructive amendments, and at all stages he kept fully informed everyone who is interested in the Bill by writing to us and keeping us up to date. It is a better Bill as a consequence of the House working effectively in the way that it did.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, I thank the noble Lords, Lord Eatwell and Lord Myners, for those remarks. I add my thanks to the Bill team, who did a cracking job, and to the Opposition for the constructive spirit in which we saw the Bill through.

Bill passed and sent to the Commons.

Parliamentary Voting System and Constituencies Bill

Monday 7th February 2011 Lords Chamber

Order of Consideration Motion

15:17

Moved by

[Lord McNally]

That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 to 6, Schedule 9, Clauses 7 to 19, Schedules 1 to 8, Schedules 10 and 11.

Motion agreed.

Parliamentary Voting System and Constituencies Bill

Monday 7th February 2011 Lords Chamber

Report (1st Day)

15:17

Motion

Moved by

[Lord McNally]

That the Report be now received.

[Lord Falconer of Thoroton]

My Lords, as we begin Report on the Bill, we believe that it is important that the House is updated on our position on the Bill. We invite no prolonged discussion at this stage on the timing of Report.

The Bill is acknowledged on all sides of the House to be a significant constitutional Bill that has not been the subject of what is regarded as the norm for such a Bill—either public consultation or pre-legislative scrutiny. Report has been brought forward without the 14-day gap that convention requires between Committee and Report. These conventions exist for a reason. That 14-day gap allows consideration and discussion in Committee and then the formulation of amendments for Report and preparation for their debate. There has been one sitting day between the end of Committee and Report. It is for your Lordships to judge whether the many issues raised by the Bill meant that it was never going to be possible to scrutinise it properly in the time sought to be allotted by the Government.

We think it right to register the point about the gap, but the mood of your Lordships’ House has been to encourage the participants to resolve the problem by negotiation. The Opposition have supported and participated in this actively. They have been greatly assisted by the intervention of the Cross-Benchers. We have negotiated at all times in good faith. The Government indicated a basis for agreement on the main issues, to which the Cross-Benchers have responded, with our support, in accordance with the Government’s suggestions. Cross-Benchers have discussed amendments with the Government in accordance with what they believed the Government were indicating, but no agreement has been reached.

Our system of self-regulation works only if the parties are willingly to negotiate honestly and skilfully and can reach agreement. However, we want to help the process and to do so we have agreed today that we will seek to complete Report on Part 1 of the Bill today. There is a way to go, but my sense is that your Lordships want to get on. It is a token of our good faith that we seek to complete Part 1 today. No one could suggest that that was not very reasonable progress. We want this House to consider these matters in a reasoned and reasonable way, and we very much hope that the Government will respond to this. We want this House to be able to consider and, as appropriate, vote on the key issues before us on Report to encourage resolution by agreement.

[Baroness D'Souza]

My Lords, last week an amendment on public inquiries was tabled from the Cross Benches as a possible means of arriving at a compromise agreement between the Government and the Opposition. The Government promised to come back with a modified amendment. Following this there was an agreement that Committee on the Bill should be completed, as it duly was, last week. We are now on Report and we have further amendments on public inquiries, thresholds and the percentage variation. Perhaps this is an appropriate time to reiterate the role of the Cross-Benchers by laying particular emphasis on their being politically unaligned.

The amendments before us—some usefully tabled by expert Members on the Cross Benches—are to do with content, not process. As the current Convenor, I do not and cannot speak for one party or another in this debate, although as individuals, me included, we will vote according to what each of us thinks are useful amendments and what is an appropriate way forward. I can say that Cross-Benchers as a group wholly support the main task of this House, which is scrutiny. It follows that anything that might interfere with that role, be it a programme timetable, filibustering or flouting of the conventions of this Chamber, would probably not be supported. Thus the normal convention at this stage is that Report should go ahead, that reasoned arguments be put, that Divisions take place and that the Bill goes to the House of Commons by 14 February. I say with some confidence that this would be the view of the majority of the Cross-Benchers.

As your Lordships know, a great deal of negotiation has taken place. However, what is now called for is that the essence of these negotiations comes to the Floor of the House and that opinions be canvassed by means of voting. Whatever the outcome of the Divisions, the Bill would go back to the other place for consideration. This is the way in which this place has, for perhaps hundreds of years, conducted its business. Many of us might feel that we should now return to these practices and that necessary compromises are made at the final stage of the Bill, which is Third Reading, next week.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, I thank both noble Lords who have spoken in a most constructive way. I agreed with the noble and learned Lord, Lord Falconer of Thoroton, when he said that this should not be the occasion for prolonged debate. I very much welcome the reiteration by the noble Baroness of her role as Convenor of the Cross-Benchers, the role of the Cross-Benchers themselves and her interest in the process of scrutiny. Individual Cross-Benchers can take different views on the content of the Bill as it progresses.

It is true that there are normal minimum intervals, which have been shrunk on this occasion. The reason for that is plain. For the Bill to become law it needs to return to the House of Commons at the end of play on Monday 14 February. That has been well known by Members of this House. However, the House has flexibility to reduce minimum intervals, and that is what we are dealing with. Indeed, some of the amendments that we will deal with today were last dealt with in Committee on 30 November. The House will feel, therefore, that we will have plenty of time to examine it. Time is not unlimited. That is an important consideration. I respect what the noble and learned Lord said about completing Part 1 today. That is right, sensible and achievable. I am sorry that he did not go on to say that he would be able to complete Part 2 this week, but I have to hold out the hope that we will be able to reach agreement so that Report can be completed this week in time for Third Reading on Monday. We will also continue to work with the usual channels, because it is also the will of the House that we should try to focus the key debates on this Bill at a time that is most convenient for noble Lords to make their voices heard in a Division.

Report received.

Clause 1 : Referendum on the alternative vote system

Amendment A1

Moved by

[Lord Rooker]

A1: Clause 1, page 1, line 5, at end insert—
“( ) If less than 40% of the electorate vote in the referendum, the result shall not be binding.”

[Lord Rooker]

My Lords, it is best if I briefly state what this amendment does not do. It does not prevent the referendum taking place. It does not have a threshold that stops the proposed change in the Bill taking place. It simply allows the compulsory change in the Bill to be activated only if the turnout is 40 per cent plus. If it is less than 40 per cent, it still allows the change but requires the decision of a Minister to do so, which probably implies a debate in this House and the other place. In other words, if the turnout is 40 per cent plus, we get a binding compulsory change. If it is less than 40 per cent, it becomes discretionary. All my amendment does is to make the referendum effectively consultative if the turnout is less than 40 per cent. In fact, it takes in the debate that we had in Committee on an indicative referendum along with some of the debates on a compulsory threshold and compromises on both those issues—something that has been sadly lacking from this coalition—to try to put to the House an amendment that allows the Bill to operate in a more sensible way.

As I have said, I think that it would be controversial in some ways if the thresholds—on which there are amendments—were put in simply because people go back to what happened in 1979, which left a sour legacy. On the other hand, this is a major piece of UK constitutional legislation that affects every voter in the country. I am not clear that it is right to do this without more consensus than we have in the Bill. A high turnout and a small majority would be as bad as a low turnout with a large majority. Before we embark on this we should have an assessment of the result of the referendum. My compromise is that we can assess it only if the turnout is less than 40 per cent. If it is more than 40 per cent, there is no assessment and the result is binding. That is the way we have done it in the past. We have had a referendum, and then assessed the result before we make the changes. In this case there is a halfway measure—we do it only if the turnout is less than 40 per cent.

If the Government get their way—they want a high turnout on May 5—it is implied that probably the turnout will be higher. I do not prejudge that. If it is indicated by the people of this country that they are not actually four-square behind it, the amendment allows us, in certain circumstance, to have an assessment and to rethink the way forward.

The amendment is reasonable in the extreme—far more reasonable than anything I have heard so far. Twice in the past fortnight I have heard the Leader of the House mention at the Dispatch Box a package of concessions. There is no package of concessions on the Marshalled List as far as I can tell. Given what we said in Committee—we are not trying to repeat what we did but are taking part of two debates—I think that my amendment is frankly so reasonable that it should be passed on the nod. It would not wreck the Bill or the referendum and would allow a pause to assess whether the turnout is low. What is wrong with that? I beg to move.

15:30

[Lord Blackwell]

My Lords, I have been a loyal supporter of the Government on this Bill but I confess that this is one amendment where I have sympathy with the proposer given the role that referendums may have in other constitutional issues and the precedent that may be set. I ask myself how comfortable I would be with a referendum on joining the euro if less than one in five of the population—that is, 20 per cent—voted for it; or, indeed, with a referendum on leaving the European Union if a similar result emerged. Therefore, the Minister needs to address how the precedent set by a referendum on this issue might affect precedents set on other grave constitutional issues that might also be the subject of referendums in the future.

[Lord Anderson of Swansea]

My Lords, my starting point is clear and I think has widespread acceptance throughout the House—namely, that what is proposed is a major constitutional change. I hope that the House is with me in saying that a constitutional change of this magnitude should have legitimacy, particularly as the hallowed rules of the game, which have stood the test of time over a long period, are being changed. Therefore, a means has to be devised to show that such a change has at least reasonable support among the electorate. The object is to make any such change as long-lasting as possible so that any future Government are not tempted to alter the rules of the game as they would recognise that there was a sufficiently broad consensus. Otherwise, there is a danger that the change will be deemed to be no more than the view of one Government which can be properly reversed by a successor Government. I warn the Government that if they steamroller ahead—already there have been great affronts to our normal conventions on this—a future Labour Government—such a Government will arise, although we do not know when—will be tempted to say that they are not persuaded that the change has sufficient support, and therefore that they are minded to change it.

Therefore, the key question for the Government is: do they seriously think that it is important that such a change has wide popular support? Putting it another, simpler way: do not most reasonable people in the House agree that it would be absurd if only 25 per cent of our electorate were to turn out and there were to be—if I have done my arithmetic correctly—13 per cent for and 12 per cent against? Would that be considered a sufficiently strong basis for a change of this nature to be agreed? I hope that most reasonable people agree that it would be absurd if such a change were to be agreed on such a flimsy basis. It would be contrary to the spirit of our constitution, the way that we work and, indeed, the way in which this House tries to ensure a reasonable response to proposals.

I fear that there could be quite a small turnout. Between now and the proposed date of the referendum we have but two months. However strong the efforts that are made by the umbrella organisations for and against the referendum and however strongly the Government try to whip up enthusiasm, I fear that there will be substantial apathy. There is widespread disillusion at government generally; and the Deputy Prime Minister, who has been most personally linked with this proposal, is not the most popular member of the Government. Whatever the merits of the case, people may find that a convenient way of showing their disapproval of the Deputy Prime Minister is by voting with their feet. This is perhaps part of the problem of a referendum; it very much depends on who is putting the proposal and the time at which it is put. We saw that, for example, in our own referendums. In 1979, an unpopular Labour Government put forward proposals for devolution in Scotland and Wales, which, certainly in Wales, were mightily rejected. Equally, in 1997, when the bliss was in that dawn, a new reforming Labour Government managed to get not a 4:1 rejection of the proposals, as in 1979, but a majority for them—just.

On a further point of sadness, it appears that the Government are probably not in a mood to make concessions. This rather wooden response of theirs may be part of the problems of coalition politics. I cite in evidence the debate on the Isle of Wight proposal. We understood, from the excellent speech of the noble Lord, Lord Fowler, that all parties on the isle were in favour of an exception being made. The noble Lord made an extraordinarily strong case for that. It was quite clear to all of us that whatever arguments we might seek to raise it was easy to see that the Isle of Wight would not provide a precedent for other areas of the country and was unique. That surely should have been an opportunity for the Government to say, “We are a listening Government; we have heard the arguments and we are minded to change our position”. But no—the Government insisted on putting the proposal to a vote and were then roundly defeated. Worse, they then tried to claim some benefit, saying, “This is one of the great concessions that we have made”, when clearly any listening or reasonable Government not bound by a coalition agreement would have made some concession on that point.

I turn speedily to the amendment on what happens if fewer than 40 per cent vote. This provides an escape route for the Government, and I return again to the Cunningham amendment in 1979, with which I had some experience, all those years ago. I make but two short propositions. First, in many countries, there is special provision when there are proposals for constitutional change. It is not enough to have a bare majority in one or both Houses of the legislature. Secondly, there is special provision in many countries where a referendum is held to ensure that more than a bare majority is required—hence the proposal for a threshold.

I could detain the House for a long time with the results of my research on this issue. My objective is not to detain, and to accept that practice varies from country to country. I shall give a few examples, if I may, of the two propositions. First, I cite Article 5 of the US constitution, which demands that before an amendment to the constitution can be made:

“The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention”,

and so on. There is also a precedent in Germany, which I shall not quote, under Article 79 on amendment of the basic law. There is also Section 128 of the Australian constitution.

Again, because of pressure of time, I shall neither cite these amendments to constitutional provisions nor detain the House by going through a litany of other countries. I concede that all the examples that I have given relate to federal constitutions, but it can plausibly be argued that in this country we are sleepwalking toward a quasi-federal system. Already, Scotland has primary legislative powers. With the Welsh referendum in March, we have the prospect of substantially increased powers. As a slightly humorous aside, after the unfortunate rugby match on Friday one companion said to me: “Well, we may have lost the game, but we shall win the referendum”. That may be a small consolation for the result on Friday.

The object of thresholds for referendums has always been to show that there is an appropriate majority in the country for the proposal: otherwise, as I have said, it could be short lived. It would be a temptation for a future Labour Government to return to the issue if there was not a basis of sufficient consent. Clearly, there are different forms of special majority. I concede that a number of countries have a different view. For reasons of time, I will refer to, rather than quote from, the 1975 Nairn committee proposals. In this country we had a referendum in 1975 on the EU without a threshold clause, but which produced a 2:1 majority on a very significant turnout. We had the threshold commitment in 1979: I believe that Hansard will show that the Leader of the House conceded to me that this was an opportunistic response on behalf of the then Conservative Government, which fully supported the Cunningham amendment of 1979 on a 40 per cent turnout. Perhaps consistency is not something that one should hang around the neck of any politician. However, there was a threshold for the proposal for a regional assembly in the north-east and for other matters such as tenants’ choice and the education Bill.

Overseas examples are legion. Again, I will not go through the various constitutional proposals of Denmark, Ireland, Italy and Switzerland. The Government claim to be particularly close to Sweden at the moment. Sweden has strong constitutional provisions, which I will not quote, which related to proposed changes. So does Australia. The Government loudly say that they are very committed to the Commonwealth. Not only Australia but many other Commonwealth countries have appropriate provisions for constitutional change.

I end by saying that the principle is very clear. We want to avoid the absurdity of a low turnout and a lack of public interest determining a key change to our constitution. We must recognise the special nature of such a vote if we wish the result to last. If the rules of the game are to be changed, we must ensure that there is an adequate majority and an adequate consensus in our country as a whole.

15:45

[Lord Howarth of Newport]

My Lords, this is one of the most important issues before us on Report on Part 1 of the Bill. The amendment tabled by my noble friend Lord Rooker is eminently sensible. Surely we should all be able to agree that, where major constitutional change is concerned, there should be a search for consensus. Major constitutional change should not be made on a small participation in the vote.

I fear that turnout at the referendum will be low, partly because the question of whether we should switch from first past the post to the alternative vote system of elections is fairly obscure and technical, and partly—this is a very important factor—because this legislation, proposing as it does such important changes to our constitution, has not, as convention and normal practice require, been the subject of public consultation by way of a Green Paper or pre-legislative scrutiny. That means that there has not been an extensive debate, other than in your Lordships’ House, where the extent of the debate has been well justified in these extraordinary circumstances. In the time that will be available between this Bill reaching the statute book and the day that the Government have appointed for the referendum, 5 May, there will be very little possibility of the Electoral Commission explaining to, informing and, indeed, educating the people of this country about the choice that it will fall to them to make. Those are significant reasons why we should insist that there should be a substantial turnout if the result of this referendum is to be binding, and I think that a minimum turnout of 40 per cent, as proposed by my noble friend Lord Rooker, is well judged.

I think that there should always be a high hurdle in a referendum. It would be intensely undesirable if Governments got it into their heads that referendums were a readily available, convenient way of introducing a change that they happened to think was desirable. I very much heed the advice of the Constitution Select Committee of your Lordships’ House. In its report on referendums, it has made it very clear that it considers referendums to be in principle undesirable and inconsistent with the principle of parliamentary government. Although the committee concedes that referendums may be appropriate on significant constitutional issues, I am sure that the tenor of its recommendations is that we should not automatically reach for referendums as a convenient device for the Government of the day; rather, it should be rare and difficult for a proposition to be put to a referendum.

I take the view that, where there is to be a referendum, it should be advisory rather than mandatory. Again, my noble friend Lord Rooker has proposed to the House a very sensible compromise: if there is a majority on a genuinely substantial turnout, we accept that this referendum will be mandatory but, if the turnout is less than 40 per cent, the question of where we go from there will come back to Ministers and to Parliament. That all seems very sensible. Surely, when we are developing constitutional change, we should do all we can not only to achieve consensus between the parties in Parliament but to achieve a substantial consensus in the country. Therefore, I support the amendment.

[Lord Alderdice]

My Lords, I think it is only right for me to pay tribute to the noble Lord, Lord Rooker, who was regarded with much affection during his time as a Minister in Northern Ireland. However, that also leads me to my questions about his amendment. He was famed for his plain speaking and uncluttered thinking, but sometimes the simple response to a complex issue may not be the right one, and I think that that is the case with this amendment.

Two of the amendment’s components trouble me. The first is the notion that it should be a non-binding referendum; in other words, we say, “This is so important that we must hear what the people have to say. But if we do not like what they have to say because of the numbers who turn out to vote, the Government will then do something different from what the people have said”. I do not think that it is a very advisable to ask the people what they think but then for the Government to decide whether they will follow through on that. However, it goes further than that. The noble Lord, Lord Rooker, will be very familiar with the fact that the only elections in Northern Ireland which are not held on a proportionate basis of some kind—in fact, all the rest are held on the STV system—is the election to the House of Commons at Westminster. I could very easily see a situation where the turnout in Northern Ireland was much higher than in other parts of the United Kingdom—that is not unusual—and where there was overwhelming support for moving away from the first past the post system, as it is not used for any other elections and no one in Northern Ireland seriously proposes going back to it.

Of course they would rather have STV but that is not on the agenda at the moment. Northern Ireland could vote overwhelmingly for a move away from first past the post and the Government could say that the rest of the UK have not voted in such numbers—although the outcome is still clear—and have the freedom to ignore the situation or to espouse it. If this is what the people want, maybe we should move away from the first-past-the-post system in Northern Ireland—and perhaps in other parts of the UK—and argument could then begin to emerge that the Government had the freedom to bring forward different electoral systems for the one Parliament. That would not be a change because it is already the situation in our elections to the European Parliament. It would not help to bind things together in the United Kingdom if we had different forms of elections to the House of Commons.

I am seeking to show that what appears a simple, straightforward, elegant way of addressing a potential problem in fact opens up a series of other matters which have not been referred to in today’s debate. I give way to the noble Lord, Lord Reid, who is also a much distinguished servant of Northern Ireland.

[Lord Reid of Cardowan]

I thank the noble Lord for that. His argument would carry immense weight if not for the simple fact that the circumstances—historically, socially and constitutionally—in Northern Ireland are unique in the United Kingdom. Nowhere else has a referendum been held inside and outside the United Kingdom at the same time, as was the case with the Good Friday agreement; nowhere else is there a Chamber where automatically all of the parties must share a percentage; nowhere else are there constitutional arrangements which stand completely at odds with every other part of the United Kingdom, for very good reasons. Therefore, the arguments the noble Lord has made very eloquently fall on the simple point that Northern Ireland is already unique, and anything that added to that uniqueness would be marginal compared to the differences that already exist.

[Lord Alderdice]

I am grateful to the noble Lord for his intervention. However, I am sure he will not go back to Scotland to argue that Scotland is not unique in its history, culture and background.

The point is not the uniqueness of the situation in Northern Ireland but the importance of holding together a single system for election to the House of Commons so that various procedures do not enter into it which have the untoward effect of differentiating representation in the House of Commons. We need something which binds our United Kingdom together. That is why the simple and, on the face of it, not unreasonable proposition from the noble Lord opens up all kinds of other boxes. That is not his intention but it is a real possibility, and that is why I oppose the amendment.

[Lord Hodgson of Astley Abbotts]

Like my noble friend Lord Blackwell, I have been a loyal supporter of the Government throughout this Bill. However, like him, the amendment gives me cause for concern and I feel there is a lot in what the noble Lord, Lord Rooker, has said. I share my noble friend’s views about the danger of a precedent being created in this way without any threshold.

The noble Lord, Lord Alderdice, argued persuasively that we may not like what the people have said. However, as I understand it, under the amendment of the noble Lord, Lord Rooker, 60 per cent of the people will have said nothing. They will not have said that they are in favour of it; they will just have stayed away. That is hardly an argument for there being the high-level consensus for the change that it is proposed to bring in.

Even with the noble Lord’s amendment, we could have a binding referendum with one in five people voting in favour of it, which seems a perfectly satisfactory threshold. My concern is more about different results from different parts of the United Kingdom, to which he refers. We may have different turnouts in different parts of the United Kingdom because of the nature of the elections that are taking place on the day. We may have low turnouts in one place and high turnouts in another, and large parts of the United Kingdom may feel that they have had a system foisted upon them in circumstances where they have voted against it and there is not the level of consensus required.

For me, the danger of having no minimum to which we can point as giving a level of participation across the country represents a grave danger to the unity of the kingdom, because all parts of the kingdom may not feel that they have been treated fairly.

[Lord Elystan-Morgan]

My Lords, I have, for my sins, tabled Amendments 11 and 15 in relation to a 40 per cent threshold, but I have considerable doubt whether those amendments are in any way superior to this one. The effect of my amendments, if I may so call them, would be completely to nullify the effect of the referendum. It would be as if it had never happened if it was carried by a yes vote but the turnout was under 40 per cent. That would be the end of it, it would be totally expunged.

The effect of the amendment proposed by the noble Lord, Lord Rooker, is very different. It states that the referendum stays. The referendum has no mandatory effect, but it has a consultative effect to which, obviously, the Government of the day would be under considerable moral and legal obligation to pay the highest heed. That is the difference between them.

The beauty of the amendment of the noble Lord, Lord Rooker, is that it gives great flexibility. It enables the Government to take into consideration all the matters which are relevant to its ultimate determination, including the level of turnout. For example, if the turnout was 39 per cent, it seems to me that it would be entirely proper for a Minister to say, “In the circumstances, we see no reason why we should not accept this as, effectively, the will of the people”. On the other hand, if the turnout was 29 per cent, that might be very different. If there were special circumstances in relation to polling day, they, too, would be relevant factors to be taken into account.

The beauty of Amendments 11 and 15, however, is that they give certainty. There would be no question of any dubiety about whether the Government of the day were acting properly and fairly or were in any way tinged by partisan considerations. It would be absolutely certain. It is said that Sir Walter Raleigh, contemplating the axe that would put an end to his life, said, “It is a sharp but certain remedy”. That is what my amendments would be: a sharp and certain remedy, possessing the merit of certitude but lacking any flexibility.

Three questions should be asked about the issue which are relevant to my amendments, and I shall not repeat them if I speak on those amendments. First, how serious would it be if only a derisory turnout supported a yes vote? Secondly, is a 40 per cent turnout threshold the right way to go about it? Is it fair and just? Thirdly, would any alternative in all circumstances be worse?

I start with a proposition which I suppose that everyone in this House will accept: this situation is unique. We have never been this way before. Only one all-UK referendum has been held, in 1975 on the question of whether Britain should depart from the European Union. That was not a mandatory referendum; it was a consultative referendum. I have read the Act again. There is nothing in the Act that says in any way that it is authoritative, so it could only have been consultative. I am sure that that is the correct constitutional judgment in the circumstances.

Therefore, we have the unique situation of an all-UK referendum that is mandatory. How serious would it be if there was a derisory turnout? I believe that that would eat like acid into the very roots of our parliamentary and constitutional system. I do not believe that one can exaggerate what would be the case. There is cynicism abroad already about this House and the other place. That cynicism would be multiplied many times if it were felt that changes had been made that turned only perhaps on a percentage of 10, 15 or 20 per cent.

16:00

It can be said that Governments are elected on very small majorities and with very small turnouts. That is certainly the case: I think in 2005 it was under 22 per cent, as has already been said. Governments come and go: massive features of the constitutional landscape remain. That is what we are dealing with.

The next question is whether this is the way to deal with this matter. Yes, I believe that it is. One could certainly consider the alternative of a majority provision, where a majority has to be x per cent. Many will remember the Cunningham amendment of 1979 which operated in Scotland and in Wales. The very eminent constitutionalist Professor Bogdanor laid the situation bare in the following way. With an 80 per cent turnout, you could achieve that 40 per cent majority with half of that vote plus one vote. With a 70 per cent turnout, you could achieve the 40 per cent majority with 57 per cent of those electors voting yes, which is a high percentage. However, with only a 60 per cent turnout, which would be very substantial—I think that was the turnout in Scotland in 1979—you would need 67 per cent of those electors to vote yes; a level so high as to be virtually impossible.

The idea of a threshold condition, therefore, is entirely proper. I am in grave doubts as to whether my amendment has merit over that of the noble Lord, Lord Rooker, or whether the amendment of the noble Lord, Lord Rooker, has merit over mine. But if the House is of the opinion that this is the way to do it, I would completely accept that.

As regards the 40 per cent, that is about right. With regards to Sir Patrick Nairne, I think there were two sittings—the 1997 and 2006 sittings—when turnout thresholds of 50, 60 and 70 per cent were discussed. Bearing in mind that in no general election since time immemorial—as far as I know—has less than 50 per cent of the electorate voted, and that in the previous referenda referred to the turnout was always 50 to 60 per cent, 40 per cent seems to me to be right and proper.

I do not accept the canard that by having a threshold an abstention amounts to a no vote. That is utterly misplaced and misconceived. There is no evidence one way or another. It is as likely as not that, were there a threshold, persons who are mildly disposed in favour will be brought out to vote. But if one places oneself in the mind of an ordinary elector who had doubts about the matter in hand, one can ask whether he going to vote or to abstain. If he votes, there is a stone cast deliberately and positively against the proposition. That stone will be part of a pile that he hopes will be sufficient to defeat it. If he does not vote, there is uncertainty as he does not know whether the threshold will be reached.

[Lord Tyler]

My Lords, does the noble Lord accept that in those circumstances an abstention counts as a no vote and so discourages participation in the whole exercise?

[Lord Elystan-Morgan]

I readily accept that an abstention can count as a no vote. Whether it would in most cases, with great respect to the noble Lord, I do not think anybody can say. I am quite certain that it is wrong to assume that an abstention is always equivalent to a no vote. That is my proposition. I do not think that I have anything useful to add to the matter, save to say that what is at issue is the credibility of the parliamentary system—credibility that would be greatly damaged if some provision of this nature were not resorted to.

[Lord Falconer of Thoroton]

My Lords, this is an important amendment, which goes to the legitimacy of any change to the voting system. First, I do not believe that the stages in the argument are substantially in dispute. The referendum deals with an important constitutional issue and I have not heard anyone say that we should not have a referendum. There are people who object to referendums but, by and large, if our country is having referendums, this is an issue to have one on because it changes the voting system.

Secondly, this is an unusual Bill in so far as a referendum is concerned because it provides for a compulsory referendum, not an advisory one. By that I mean that if the vote is passed, the consequence is not that Parliament would then produce another Act of Parliament, as it did with the Scotland Act and the Wales Act, but that there is automaticity in that the Minister is required to bring forward an order that would automatically, in the light of the vote, give effect to the change in the voting system.

Thirdly, the effect of the provisions is that if, for example, there was a turnout of 25 per cent in the referendum, which no one regards as an outlandish percentage, you could end up with what is regarded by all as a major constitutional change being produced by 12.5 per cent of the country supporting it.

Fourthly, the reason why a referendum is required is that in constitutional change of this importance—and no one disputes its importance—it should be harder rather than easier than normal to effect such a change.

Fifthly, this is a change that has the support of the Liberal Democrats, while the Labour Party is divided on it and the Conservatives are against it. The effect is that it is almost certain that unlike with, for example, the Scotland Bill, the Wales Bill and the European common market in the early 1970s, Parliament would vote in favour of these changes. That means that, if there is no threshold, you have a situation where, far from it being harder to bring about this constitutional change, it may well be easier than it would have been with a normal Act of Parliament.

The noble Lord, Lord Elystan-Morgan, said that if you ended up in a situation where the referendum was passed by 12.5 per cent of the electorate, which would be the position, the legitimacy of the change would be considerably in doubt. I agree with that. It would—I quote the noble Lord—“eat like acid” at its legitimacy and put our voting system in play for whoever next forms the Government. There needs to be some protection to ensure that a major constitutional change such as this is not easier to make than through a normal Act of Parliament.

I am aware of the history of this matter, which is coloured by the threshold that was inserted in the 1978 Bill in the House of Commons. At the Committee stage, there was an interesting debate on that, during which George Cunningham, then the Member of Parliament for Islington South and Finsbury, in a very powerful speech persuaded Parliament that it would be wrong to make such a major change without there being a threshold.

[Lord Tyler]

Will the noble and learned Lord explain one point to me? His colleague in the other place, Mr Christopher Bryant, made a powerful speech against any threshold in this Bill, on which the Commons voted by 549 to 31. Why does the noble and learned Lord differ from his colleagues in the other place?

[Lord Falconer of Thoroton]

I do so for two reasons. First, if one reads Mr Bryant’s speech, one sees that he made it clear that this was a matter for the Lords to form a view on. Secondly, the amendment moved by my noble friend Lord Rooker does not provide that the proposal would automatically fail, which was what was voted on in the Commons. My noble friend has come up with what seems a sensible conclusion to make the referendum an advisory one, which, as noble Lords have heard from the quotes from the Constitution Committee, is the norm in our country. My noble friend has found a way through in relation to that.

This is important. We were unsure what our position should be precisely on the point made by the noble Lord, Lord Tyler. We had a different position in relation to a drop-dead referendum, where, if you did not get a 40 per cent turnout, that would be the end of it. Instead, my noble friend has found a way through that.

I have listened with interest and respect to what was said by the noble Lord, Lord Alderdice, about the Northern Ireland position and to what my noble friend Lord Reid said. My view is that we are dealing with a voting system for the whole of the United Kingdom. Once one accepts the proposition that there needs to be something special in order to justify this change, there has to be support throughout the whole of the United Kingdom, which obviously includes Northern Ireland. Although I listened with respect, I do not think that the reason given means that the simple solution that my noble friend Lord Rooker has produced is inadequate.

The noble Lord, Lord Hodgson, said that there would be a differential turnout in relation to this referendum because there will be local, Scottish Parliament or Welsh Assembly elections in some parts of the country but not in others. If you have a UK-wide threshold for turnout, that assists in making sure that the differential turnout does not affect the result.

The Opposition support the noble Lord, Lord Rooker. We believe that what he has said will promote acceptance of AV, if that is the change, which is good for the country. If there is a majority among those who vote, but the 40 per cent threshold is not reached, it will then be open to Parliament to conclude that that is sufficient, but the matter would have to come back to Parliament. There would have to be a piece of primary legislation; it would not depend just on a statutory instrument. My noble friend’s proposal does not rule out—

[Lord Rennard]

Is the noble and learned Lord suggesting that it would be open to Parliament in that event to reject the result of the referendum if, say, on the mathematics that I have just worked out, 13.5 million people voted yes in the referendum—a greater number than have voted for any Government in recent general elections—and 4 million people voted against? If so, the will of 13.5 million people voting yes would not count, while the will of 4 million people voting no would. Ultimately, he says that the matter would go back again to Members in the other place to decide what the voting system should be for voters, rather than leaving it for the voters themselves to decide what system they have for choosing their elected representatives.

[Lord Falconer of Thoroton]

The position would be exactly the same as it was in relation to the Scotland Act, where a massive majority voted yes in favour of Scottish devolution. It was open to Parliament to say no to all those people in the Act that followed, but of course Parliament said yes. Unless you take the view that one completely discounts Parliament altogether, it is unlikely that such a conclusion would be reached, but suppose that the position were that 5 million voted yes and 4.5 million voted no. Let Parliament decide what should then happen. That is the effect of the amendment moved by the noble Lord, Lord Rooker. With respect, that is a very sensible conclusion and one that is entirely in line with our parliamentary democracy. We on this side of the House will vote in favour of the Rooker amendment and I hope that other noble Lords will do so as well.

16:15

[The Advocate-General for Scotland (Lord Wallace of Tankerness)]

I thank the noble Lord, Lord Rooker, for tabling his amendment and for allowing the House to have an opportunity to debate what I think has been recognised as an important issue. It was debated in Committee and we now have an opportunity to further debate it and other amendments.

The noble and learned Lord, Lord Falconer, indicated, as have many other contributors, that this is a serious constitutional issue. Its seriousness is marked by the fact that there is going to be a referendum at all. The noble Lord, Lord Anderson of Swansea, made reference to this House’s Constitution Committee, whose report saw referendums as being used only for matters of the highest constitutional importance. It is fair to say that, with the exception of the proposal for a referendum on AV, the constitutional measures in the so-called CRAG Bill that we dealt with briefly before Dissolution last year were not deemed sufficiently important to trigger a referendum. The Government recognise the importance of this issue—hence the referendum.

The amendment moved by the noble Lord, Lord Rooker, would provide that, unless 40 per cent of the electorate voted in the referendum, the vote would not be binding. It would appear, therefore, that the intention is to make the referendum indicative should the turnout condition not be met. I am somewhat unclear what the consequence would be if the 40 per cent was not reached. I wonder, perhaps, whether the provisions in Clause 8 that mandate the Minister to make the order implementing the AV provision if there are more yes votes than no votes would remain unchanged if this amendment were taken alone. It is unclear what the ultimate effect would be. There is Amendment 10B, however.

[Lord Rooker]

Amendment 10B should have been linked to this.

[Lord Wallace of Tankerness]

That is helpful. Originally it was linked and it seems to have been delinked. The amendment would change the obligation to implement the result of the AV referendum into a power to do so.

I thought that the noble and learned Lord, Lord Falconer of Thoroton, was suggesting that there had to be primary legislation, although I am not sure whether I heard him correctly. Amendment 10B deals with that, although I should say something about the difficulties there, because there is still a lack of clarity. In addressing these amendments, I never like to lean too heavily on the technical matters, but there are important technical issues here of which the House should be aware.

The new discretion in Amendment 10B, if it were to be carried, seems to apply whatever the circumstances and not just where the referendum is made non-binding by Amendment A1 because turnout is less than 40 per cent. We might, therefore, find ourselves in an odd situation if the turnout exceeded 40 per cent with the majority in favour of AV. One part of the Bill would suggest that the result was binding, but another would suggest that there was no obligation, because there would be a power rather than an obligation to bring forward the order. I am also unclear as to the effect of the amendment in the event that less than 40 per cent of the electorate voted in the poll and the result was against a change in the system. I strongly suspect that this is not the intention but, as it stands now, the provisions mandating the Minister to repeal the relevant clauses would still stand but the result itself would not be binding. I am sure that the noble Lord will have an opportunity to clarify that. There is a difficulty there at the moment.

In addition, the amendment offers no indication of what kind of process might be followed where less than 40 per cent of the electorate voted. Even if Amendment 10B were carried, there would be a heavy responsibility on the Minister and then on Parliament if there had been a yes vote. The Boundary Commission review would be complete but he or she may or may not bring the provisions into force. As we are all aware, the boundary review will not be completed until 2013 at the earliest. Is it really the case that we want to replace the current provisions in the Bill, which provide both clarity and certainty, with provisions that could leave us with no clear resolution for the two years following on from the referendum? I am not saying that that would be the case, but that is the possibility that we open ourselves up to with these amendments. I cannot believe that that lack of clarity would be healthy.

I assume that that is not the intention of the noble Lords who are making these proposals. Perhaps they envisage that the gap in their amendments would be filled by what the noble Lord, Lord Wills—I am not sure whether he is in his place—proposes in his Amendment 10C, which is that there would be a debate in Parliament. His proposal would introduce a statutory requirement for a debate in both Houses within 14 days of the referendum result, although as it stands it would not make the referendum indicative and so would have little practical effect.

Even if the amendments tabled by the noble Lord, Lord Rooker, provided for this or some other process, I would still find it necessary to oppose them. The Bill provides that the referendum result will be decided by a simple majority. We believe that that is right, because it is the simplest, clearest and fairest way of proceeding. When people make the effort to go to the polls on 5 May, they should know that, if they vote for the alternative vote, that is what they will get. To impose a threshold or to make a referendum indicative would be to offer some sort of consolation prize—people might get it at the very end.

Reference has been made in this debate and in the debates that we had in Committee to the 1978 situation, where, because of George Cunningham’s eloquence and, perhaps, the Opposition seeing an opportunity, a 40 per cent threshold was introduced. The noble Lord, Lord Rooker, said that there was a bitter taste. As one who campaigned in that referendum, I know that that bitter taste lingered for a very long time. To go out and campaign in a referendum and get a majority for the yes vote and then to be told that the majority did not count and did not matter was bitter. In terms of the cynicism of voters, which was referred to by the noble Lord, Lord Elystan-Morgan, there would be a real danger of cynicism if people went out and voted and there was a clear yes vote and somehow or other that yes vote had to be held in suspension or might not be translated into action.

[Lord Lamont of Lerwick]

If that argument is correct, why does it not also apply to general elections and constituency votes, which some noble Lords wish to alter?

[Lord Falconer of Thoroton]

Is it not also right that it was an automatic no when the level was not reached in 1978, which is not what my noble friend Lord Rooker is proposing here?

[Lord Wallace of Tankerness]

There is a difference because the 40 per cent related to something different. I am not entirely sure that I follow what my noble friend Lord Lamont said, because in general elections there is no threshold for what the turnout should be to make those elections valid and no one has ever suggested putting a turnout—

[Lord Lamont of Lerwick]

The noble Lord is in favour of moving to an electoral system in which a simple majority is not enough. At the same time, he is saying that this referendum ought to be determined by a simple majority.

[Lord Wallace of Tankerness]

There are different types of voting system and there will be later amendments with regard to them. This is a referendum with a straight yes or no. If in a general election there were two candidates, it would be a simple, straight case of whether you were or were not elected. The difficulty arises under our electoral system where there are more than two candidates. That is why there is a difference between a straight yes or no in a referendum, where by definition one side is going to get more than 50 per cent of the votes cast and one side is going to get less than 50 per cent.

I am aware that concerns have been raised here and elsewhere about the turnout. It is clear that we all want to see high levels of turnout. I believe that this will be the case. The fact that the referendum will be combined with other elections on 5 May will help to increase turnout. The campaigns in the run-up to the referendum will increase public awareness. The work of the Electoral Commission in promoting public awareness about the referendum and the media coverage about the referendum will help. In previous referendums, the turnout has generally been above 50 per cent. It was 64 per cent in the 1975 referendum on the European Community, 60.2 per cent in the Scottish devolution referendum and 50.1 per cent in the Wales referendum in 1997.

My noble friend Lord Blackwell expressed some concern about setting a precedent if there are any future EU referendums. It is precisely because of the precedent that we should not start setting thresholds. A procedural barrier such as this can lead us into uncharted waters, because someone might come along with different thresholds for future referendums. Surely it is better to have a single, straightforward vote where people know where they stand and what the outcome will be when they cast their vote.

My noble friend raised the question of the United Kingdom. We sometimes have different votes in different parts of the United Kingdom at a general election. Sometimes that leads to some tensions, but I do not think that it is suggested that it has weakened the fabric of our union in any way.

[Lord Hodgson of Astley Abbotts]

Does the Minister really think that on 5 May, when we have a Scottish parliamentary election, a Welsh Assembly election and only local government elections in England, the level of turnout is likely to be the same in all three parts of the United Kingdom—not to mention Northern Ireland?

[Lord Wallace of Tankerness]

It would be rash to predict the turnout, but I think I am right in saying that 84 per cent of the United Kingdom electorate will be engaged in an election as well as in the referendum. That gives every opportunity for the turnout to be higher as a result, and it is perhaps more likely to be better in all parts of the United Kingdom than if no election was being held at all that day, when there would very much be a doubt as to the turnout in different parts.

[Lord Dubs]

I only wanted to say that London does not have elections, which is surely crucial.

[Lord Wallace of Tankerness]

I know that, but I think that the figure that I have seen is 84 per cent. It is recognised that London does not have elections, which is probably all the more cause for those who wish to stimulate participation to ensure that it is particularly well focused in London.

As my noble friend Lord Tyler pointed out, when the question of a threshold was considered in the other place, Members there sent a very clear message indeed, voting by 549 votes to 31 votes against the proposal. I note in particular that Mr Christopher Bryant, speaking from the opposition Front Bench in the other place, said that he did,

“not think that it is appropriate to bring in a threshold”.—[Official Report, Commons, 2/11/10; col. 849.]

His colleagues followed him into the Lobby.

The noble Lord, Lord Sewel, is in his place. During the debate on the 1997 referendum on devolution, he said:

“The threshold, as we have demonstrated, is one of the most dangerous introductions into the democratic process that has been engineered”.—[Official Report, 7/7/97; col. 467.]

I hope that he will confirm that.

[Lord Sewel]

I do confirm that. I also confirm that that was an advisory referendum.

[Lord Wallace of Tankerness]

Indeed, and I do not think that that takes away from the point. As the evidence in paragraph 193 of the Lords Constitution Committee report said:

“Despite referendums in the UK being legally advisory, a number of witnesses pointed out that in reality referendums might be judged to be politically binding. Dr Setälä argued that ‘in established democracies, it seems to be very difficult for parliamentarians to vote against the result of an advisory referendum’”.

It might also have been advisory, but the noble Lord, Lord Rooker, recanting on his vote in 1978 in a debate on the Regional Assemblies (Preparations) Bill on 8 April 2003 in this House, referred to the vote after the George Cunningham speech and said:

“The result was a botched referendum in Scotland, which resulted in a "Yes" vote that could not get over the hurdle … We are now in the position where we are following the precedent set in Scotland, in Wales”—

that is, a more recent precedent in Wales—

“in Northern Ireland and in London. It would be absolutely crazy and unfair if we were to change the rules for any proposed regional referendums when we have already held referendums in so many other areas of the United Kingdom”.—[Official Report, 8/4/03; col. 188-89.]

The noble Lord spoke powerfully on that occasion.

The Bill offers simplicity. Above all, it offers certainty. Every vote will count and will not be distorted by any artificial barrier or threshold. My noble friend Lord Tyler asked the noble Lord, Lord Elystan-Morgan, about abstentions counting in no votes. During our debates last week on postal votes and whether people could vote by post if they had voted in person, it was clear that a number of Members of your Lordships' House were registered in two places. They can exercise only one vote, so the other vote will technically, de facto, count as a no vote. Those who have died since the register was made up will count as a no vote, because nothing here allows the register to be recalibrated to take account of people with votes at second homes or those who have, sadly, passed on. I recall very well that these unfairnesses were highlighted time and again in the 1979 referendum in Scotland.

The certainty of the will of the people should be given effect without further complex procedures or further parliamentary debate or political wrangling, so that when people go to the polls on 5 May, whatever their view on the issue at hand, that view will be heard and given effect to. I ask the noble Lord to withdraw his amendment.

[Lord Rooker]

My Lords, I did not expect words that I used as a Minister from that Box to be thrown back at me during this debate. Given that it has been a bit of a rush since we finished Committee, I would have thought, to be honest, that the Minister’s advisers would have been better getting ready the package of concessions that we have been promised than trawling through my old speeches—which, I would add, were on regional referendums. This is different.

The other thing that I want to make absolutely clear is that this is not a threshold in the normal use of the word. This is not what the House of Commons voted on, or against. It is not the threshold. If it is not 40 per cent, it does not stop it going ahead. I do not wish to do that, but with all the arguments and permutations that one can think of, one can imagine lots of reasonable cases to be made to proceed accordingly after the result. All I am saying is that, given the binding nature of this, as others have said, and not knowing what is going to happen in only the second-ever national referendum, and on a key issue of changing the voting system—not like elections, where Governments come and go, as someone said—it just gives Parliament an opportunity to think again, and Parliament would be well advised to take the will of the voters. I do not argue with that at all, but I simply say that the Bill is too black or white, all or nothing.

By the way, I do not claim any credit for this amendment. I wrestled last week with how I could bring back the issue of a consultative indicative—which failed in a vote on, I think, 6 December—and deal with the idea of thresholds, which I am intrinsically against for the reasons that many noble Lords have explained. Nevertheless, we have to have this as a back-up. I was wrestling with this with a very bright young person in the back of a taxi when the solution was offered to me: join the two together—make it indicative only if the voter turnout is different. We can still proceed accordingly; we can still have the referendum, still have the result, still make the change to AV, whatever the voter outcome. I am just saying that if the voter turnout is less than 40 per cent, Parliament could say, “Hang on, we had better think about this again”.

We have come a long way since those who originally proposed the alternative vote—the Electoral Reform Society and company—actually said, “It is so small a change, you do not need a referendum”. That has been their case virtually all along—that we did not need a referendum on this. I do not support the AV system in the Bill anyway, but that is not the issue. I have back-up amendments, in response to the noble Lord, Lord Alderdice, because I genuinely think that you have to get a yes vote in the four countries of the UK. That is not implied in this amendment; it is there in Amendment 11A.

I accept that there is clarity and certainty in the way in which the Bill is drafted. There is too much clarity and certainty when we are dealing with an electorate of well over 40 million. It is true that on election day, as has been said—I have not yet checked the figure— 84 per cent of people are eligible to go to the polls. When you have, among the 16 per cent who are not, a massive block here in the capital city—it is not as though they are spread out all over the country—we will end up with a massive block that will get the chance to vote only in the AV referendum.

I am simply saying that this gives us an opportunity. It does not wreck the Bill—I repeat this for those who will deliberately misunderstand and misreport what we say—it does not wreck the idea of the AV referendum, it does not stop the outcome. Whatever the outcome of the election, it can still proceed if there is a yes vote. All I am saying is this; let us give ourselves, as a Parliament, the opportunity to have a rethink.

My final point is that I know that it looks simple. It is a few words—and Amendment 10B should attach to this to give discretion in Clause 8—but the general will is there. Everyone understands what we mean. If this were carried, parliamentary draftsmen would knock the other clauses into shape tomorrow to make it work. I can give noble Lords a classic example of that. The next two amendments after this—

[Lord Alderdice]

I am grateful to the noble Lord for giving way. It seems to me, and I am grateful to him for it, that in his remarks about subsequent amendments on the four separate parts of the United Kingdom, which would introduce a whole load of complexities such as vetoes, and on the question of the simplicity having to be addressed overnight by parliamentary draftsmen, he has said in effect that what I said is correct: that this is not as simple as it appears and that all sorts of complexities are introduced by opening this particular box. Therefore, I think it would be best for him to withdraw this amendment.

[Lord Rooker]

I said that they were a back-up. I do not speak for anyone else. If this amendment were carried, virtually half the rest of the amendments to Clause 1 probably would not even be moved—I certainly would not move mine. I am simply saying, “Let’s give ourselves a chance to think again”. If we are not prepared to do that and the House is prepared to rollercoaster on to a binding referendum in which we do not know what the result is going to be and it could be carried by a majority of one on a small percentage, then I will say, “Hang on a minute, I think I want to build some more checks into this”. However, those amendments are a back-up. If this amendment were carried, more of my amendments would disappear, so the noble Lord’s point carries no weight at all.

It is in the House’s own interest to take the opportunity to give us the chance to think again. This amendment would not destroy the Bill or the referendum and would not stop the outcome being implemented, whatever the result. I think that we should test the opinion of the House.

16:35

Division 1

Ayes: 219

---

Labour: 151
Crossbench: 46
Conservative: 10
Independent: 3
Bishops: 1
Ulster Unionist Party: 1

Noes: 218

---

Conservative: 117
Liberal Democrat: 70
Crossbench: 26
Ulster Unionist Party: 1

16:54

Amendment A2

Moved by

[Lord Rooker]

A2: Clause 1, page 1, line 6, at end insert—
“(2A) The referendum is to be held on 5 May 2011 unless before then an order is made under subsection (2B).
(2B) If the Minister is satisfied that it is impossible or impracticable for the referendum to be held on 5 May 2011, or that it cannot be conducted properly if held on that day, the Minister may by order appoint a later day as the day on which the referendum is to be held.
(2C) Where a day is appointed under subsection (2B), the Minister may by order make supplemental or consequential provision, including provision modifying or amending this Act or another enactment (and, in particular, provision modifying or amending this Act as regards the meaning of “voting area” or “counting officer”).
(2D) An order under this section may not be made unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.”

[Lord Rooker]

My Lords, in moving Amendment A2, I wish to speak also to Amendment 7B, which I shall move later. In line with what I have said previously, I give notice that I shall not move my other amendments. I have to move Amendments A2 and 7B as they are government amendments to make the decision that was taken on 6 December to hold the referendum before 31 October 2011 work.

The noble Lord, Lord Alderdice, interrupted me when I was winding up. I was about to say that when the House makes a change with a few words that we all understand, the parliamentary draftsmen have to draft a provision to make it work. Back on 6 December the House voted by four votes that the referendum must be held before 31 October 2011. I am told that to make that work parliamentary draftsmen have drafted Amendments A2 and 7B. The referendum is planned for 5 May. As far as I am concerned, that was always okay, but my view is that in case something prevents it happening on 5 May, the Government need a lifeboat to enable it to take place before 31 October. Therefore, on behalf of the coalition, I am pleased to move Amendment A2 now and Amendment 7B later.

[Lord Falconer of Thoroton]

First, I congratulate my noble friend Lord Rooker, who knows the mood of the House much better than anyone else in it. It was a splendid victory. Perhaps I may also say how much I agree with his request for the list of concessions. I can help him on that. I was handed them at 2.29 pm this afternoon, and I have to say that they do not amount to very much, I am afraid. I obviously support the amendments that my noble friend is proposing. In effect, they make whole the amendment passed in Committee.

[Lord Wallace of Tankerness]

My Lords, I thank the noble Lord, Lord Rooker, for moving the amendment, as he said, on behalf of the coalition. He described the reasons for it. The Bill as it stood was defective, because, while the noble Lord specified that the referendum had to take place before 31 October, there was no means for identifying when the date had to be set—hence the need for an order.

The amendment also sets an appropriate test for Ministers to satisfy before using any order-making power, whereby,

“it is impossible or impractical for the referendum to be held on 5 May 2011, or that it cannot be conducted properly if held on that day”.

The test is right, because the referendum date can be moved away from 5 May only for practical reasons. It would be wrong, and have very serious implications, if the reason for that was the result of some delay that had not allowed consideration of the Bill to be completed in time.

The associated amendment to Clause 4 is also necessary in this context to ensure that the scheme which the noble Lord, Lord Rooker, envisages is properly workable. It provides a new power to make provision in secondary legislation to take account of a situation in which other polls are due to be held on any other referendum date set by the order.

Clause 4 as it stands will ensure that any poll which that clause already mentions is automatically combined with the referendum if it takes place on a new date set for the referendum. Any polls which Clause 4 does not mention would not be combined with the poll. It is impossible to say at this stage whether it would desirable to combine a referendum with other polls. A decision on that would need to be taken at the time and will depend on the types of polls.

In conclusion, I reassure noble Lords that, given the flexibility that these powers need to provide, any order made using the new powers will necessarily be subject to the affirmative resolution procedure. I end on a note of caution, because I cannot speak on this subject without saying how unfortunate it would be if the referendum were not to take place on 5 May.

[Lord Forsyth of Drumlean]

My Lords, can my noble friend comment on the concern expressed north of the border about the coincidence of the referendum and the elections to the Scottish Parliament, and the difficulties that returning officers will have in ensuring that the count is available? The results may not be available on the Friday and be delayed. Will this be a problem, and have the Government any plans to avoid the difficulty whereby Members of the Scottish Parliament will not know for some time whether they have been elected and the position of the Administration in the Scottish Parliament, because of the difficulties of counting both polls at the same time?

[Lord Foulkes of Cumnock]

My Lords—

[Lord Wallace of Tankerness]

The noble Lord, Lord Foulkes, has an amendment later that will give us an opportunity to discuss the linkage of polls. I repeat what I said in Committee last week: it is certainly intended that the votes for the Scottish parliamentary election will take precedence over the counting of the votes in the referendum. Inevitably, there will have to be verification, because Scottish election votes may be found in ballot boxes intended for the referendum. It must be for returning officers and counting officers to determine their own arrangements, because issues of tiredness have come up in the past. It is certainly anticipated that we will not have to wait until Saturday for a result.

My noble friend Lord Forsyth expressed concern about the forming of an Administration. I have been involved twice in forming an Administration after a Scottish election. If the result had been known on the Saturday or even the Sunday, it would not have made much difference. However, that is by the way, because the intention is that the counting of votes for the Scottish election will take priority over the referendum.

17:00

[Lord Forsyth of Drumlean]

I do not wish to detain my noble friend. I understand what he said in Committee, namely that the counting of votes for the Scottish election will take priority. However, the issue is whether the process of validating the ballot papers will result in the election result being delayed. I have no idea what the results of the election will be, but it is conceivable that one political party will have a majority. It does not follow necessarily that there will be a period of the kind that my noble friend described. Given that the Government have decided to hold the referendum at the same time as the Scottish elections, they have an obligation to make sure that the result of the Scottish elections are delivered on time and are not disrupted.

[Lord Wallace of Tankerness]

I will add that they should also be delivered accurately. Therefore, this is a matter for the returning officers and counting officers, who are best placed to judge whether counting should start immediately or the following morning.

[Lord Foulkes of Cumnock]

For once, I agree 100 per cent with the noble Lord, Lord Forsyth—the noble Lord, Lord Baker, looks very worried. I draw the attention of the noble Lord, Lord Forsyth, to Amendment 5F on page 3 of the revised Marshalled List. If the Government were willing to accept the amendment—or even better, if the Committee were to accept it—that would deal with what the noble Lord, Lord Forsyth, wants, for exactly the reasons that he put forward, which are sound and sensible.

[Lord Wallace of Tankerness]

My Lords, we will return to this issue when we debate Amendment 5F. I look forward to the contributions of the noble Lord, Lord Foulkes, when he moves it, and of my noble friend, Lord Forsyth. We will debate this more fully at a more appropriate time.

[Lord Kilclooney]

We now know the order of priority in Scotland, but the situation in Northern Ireland is getting more confusing. In the past few days, there have been many complaints about having three elections on the one day. Will the Minister tell the Committee the order of the three counts in Northern Ireland?

[Lord Wallace of Tankerness]

When we debate Amendment 5F, I will be able to give a clear answer to that. I do not wish to hazard a guess at this stage. I think that there has been a statement from the chief counting officer, who is the chair of the Electoral Commission, that the counting of the referendum will start at 4 pm on the Friday. I will confirm that that statement has been made, and what the order will be in the Northern Ireland elections. I think that I am right in saying that some of them are conducted on the single transferable vote, which itself takes time—I put it no higher than that. Amendment 5F does not necessarily include Northern Ireland, but now that the point has been raised I will certainly be in a position to answer the noble Lord when we come to debate it.

In conclusion, the Government still wish to see the referendum take place on 5 May. The Electoral Commission and the electoral administrators are ready. The public also will be ready, and the Government would consider it a very grave matter indeed if the referendum did not meet the 5 May timetable. In the spirit with which the noble Lord, Lord Rooker, moved his amendment, I am happy to accept it and thank him for his constructive engagement.

Amendment A2 agreed.

Amendments A3 and 1 not moved.

Amendment 1A

Moved by

[Lord Campbell-Savours]

1A: Clause 1, page 1, leave out lines 10 and 11 and insert—
“Should that system be changed and a different system of electing MPs be introduced at the next general election?”

[Lord Campbell-Savours]

This amendment would amend the referendum question to read, “At present, the UK uses the ‘first past the post’ system to elect MPs to the House of Commons. Should that system be changed and a different system of electing MPs be introduced at the next general election?”. This is a particularly important amendment because it goes to the heart of the question that I believe will be in the minds of the electorate.

I start from the position that we are entering a period of entrenched multiparty politics in the United Kingdom. We have at least three major parties and a number of other parties on the fringe. At this stage, we should all stand back and consider the work of Professor Patrick Dunleavy of the London School of Economics and Professor Helen Margetts of the Oxford Internet Institute, who have repeatedly pointed to the break-up of the two-party system. In their 2005 paper, they pointed to the fact that in 2005 the two-party share of the vote fell below 70 per cent for the first time. At a meeting held in the Jubilee Room some three months ago and attended by a number of Members of this House of all political and Cross-Bench persuasions, Patrick Dunleavy set out the basis on which he was arguing the splintering of party support within the United Kingdom. It seems to me that Maurice Duverger’s law that plurality rule systems induce smaller numbers of parties is now being turned on its head. The fact is that plurality systems are increasingly turning in chaotic results, and this is now drawing us into a period of proportional representation and alternative systems.

I also believe that we are now undergoing a period of prolonged transition with the Scottish Parliament, the Welsh Assembly, the European Parliament, the London Assembly, the Northern Ireland Assembly and the mayoral elections all introducing new systems to British electoral arrangements. I believe, too, that the whole process is unstoppable. Indeed, when the debate on Lords reform comes to this House, it will no doubt be dominated not only by the issue of powers but by the question of which electoral system will apply in our case.

The question is: how can we manage change in relation to the House of Commons? Against the background of a break-up in the way that the electorate cast their votes, the multioptional, preferential voting scheme now on offer in this Bill can only be described as a grubby little compromise, in the sense that it is the ill-considered product of a backroom deal which in my view electoral reformers will live to regret. The fact that the Labour Government, in their dying days, tried to introduce this system in the Constitutional Reform and Governance Bill is no justification for its introduction in this Bill. Indeed, I am convinced that it would have been similarly treated if they had tried to introduce it here in this House.

I have reflected objectively, as many others will have done, on why the Liberal Democrats did the deal that they did. They probably thought that they had no option, but I believe they were wrong and that they made an historic miscalculation. They were clearly desperate to secure a deal on electoral reform at any price. There was an alternative and I think that they completely underestimated their clout during the coalition talks.

What should the negotiators have done during those discussions? First, they should have recognised that the Conservatives needed them as part of the coalition; secondly, they should have sought assurances as to continuity of the coalition, as indeed they did with the Fixed-term Parliaments Bill; and, thirdly, they should have sought and secured a May referendum but with the much simpler question that my amendment provides. The advantage in asking my question in the referendum is that the public will not get hung up on AV. In my view, AV is a complicated system which the public will never understand.

Furthermore, by asking a simpler question, we will be able to avoid rubbishing the AV system as currently proposed. If in the referendum the answer to the question I ask in the amendment was no, that would end the debate. If the answer was yes, that would mean there would be another system at the next general election. A no answer would mean that the issue was dead; a yes answer would open up every possibility imaginable. If the answer was yes, all alternative systems would have to be evaluated by some kind of inquiry and Parliament would be required to approve a new system for the next election—but, crucially, not the first past the post system, which would have been ruled out by a yes answer to the question in my amendment. Parliament could not duck the decision as it would have been mandated by the electorate in the referendum. All we need to know is whether the electorate want to end first past the post.

So who would do the evaluating and what would they evaluate? A Speaker’s conference could evaluate the system or systems in the event that the referendum was to provide a yes vote. A similar form of committee inquiry—and, in certain circumstances, even the Electoral Commission if its remit was widened—could evaluate the various systems. What would they evaluate? They would evaluate AV and its variants—that is, SV and the Australian federal system—AV plus, SV plus, AMS and STV—and they would also evaluate first past the post plus, which has never as yet featured on our agenda and which, in reality, was the system that formed the background to the Jenkins commission’s inquiry.

As to the timetable, under the question in the amendment the referendum would be in May 2011; an inquiry would be established in July 2011; and the report to Parliament would be in November 2011. It would be a factual report based on the various systems and the arguments both for against; it would not necessarily make recommendations. The legislation could be introduced in the Session beginning April 2012, which would be three years before the end of the five-year fixed-term Parliament and two years before the end of a four-year fixed-term Parliament in the event that that was approved by Parliament. The Parliament Act would not apply because the people would have mandated the Government to introduce a system based on the inquiry, which would be approved by Parliament before the next general election.

The programme could be allowed to slip six months. The referendum could be held in October—which I would prefer and which was proposed in the Labour Government’s original legislation of early last year. Parliament would take the final decision, and even then there would be an opportunity for pre-legislative scrutiny.

From a Liberal Democrat point of view this has one huge advantage: once the people say yes to ending first past the post and introducing a new system by the next election, the least you will get is AV. That is the least you get, because the mandate from the people requires a change in the system prior to the next general election. Therefore, automatically, the minimum change would be to AV and, because all options are open, the real debate would then take place.

My amendment puts everything back on the table, but in a way whereby, in the event that there was a yes answer to the referendum question, all systems would be evaluated, so we might have the opportunity to introduce a system which, in my view, is more likely to deal with the problem that exists within the United Kingdom of disproportionality in representation.

This is the last chance saloon. I hope that, although we are late in proceedings on the Bill, Ministers will consider the issues that I have raised.

17:15

[The Deputy Speaker (Viscount Ullswater)]

I must advise your Lordships that if Amendment 1A is agreed to, I will not be able to call Amendments 2 or 2A because of pre-emption.

[Lord Howarth of Newport]

My Lords, Amendment 2A is in my name and was grouped with Amendment 3 in the name of my noble friend Lord Rooker, who did not move his amendment. If I may say so, I think that he was right not to move his amendment, because I think that the amendment that has just been moved by my noble friend Lord Campbell-Savours is the best of the bunch of the amendments before us.

I think that it is helpful to voters to disentangle the two questions—first, do you want change; secondly, what you want to change to? That would enlarge the range of choices that could be considered. There is a difference. My noble friend Lord Campbell-Savours would have Parliament determine which of the other systems which was not first past the post should be the one to go for, whereas my noble friend Lord Rooker wants to offer an à la carte menu to the electors straight away on the day of the main referendum. I like the scheme that my noble friend Lord Campbell-Savours has put forward.

It seems absurd that if we are to go to all this trouble, to have this enormous national debate, and to give the people of this country a unique option to decide whether or not to change our electoral system, a proportional option should not be made available to them. I find it bizarre that STV, which I have always understood to be the preferred option of Liberal Democrats, will not be on the ballot paper at the referendum.

Noble Lords on the Liberal Democrat Benches have told me that I need to be more realistic, that it was not possible for the Liberal Democrats to secure that outcome in the negotiations in those few days when the coalition was formed last May. I do not believe that. At that point, the Liberal Democrats could have secured the inclusion of a proportional—in particular, an STV—option on the ballot paper.

The reality was that David Cameron and the Conservative Party had lost the election. The Conservative Party—and, I assume, Mr Cameron—was frantic to get into government. We know what the Conservative Party does to leaders who it deems losers. We have seen the fate of Mr Hague, Mr Duncan Smith and the noble Lord, Lord Howard of Lympne. I do not think that Mr Cameron would have wanted to go the same way. I think that he would have been prepared to concede something that was dear to the hearts of —canonical to—the Liberal Democrats but which they apparently did not have the nerve or the skill to insist on in those negotiations. In failing to press their advantage at that point, they did the country a major disservice. If we are to have this referendum, let us have all the sensible and serious choices—or at least a selection of them—put before the people. If it is to be only a selection of them, surely it must include STV.

We know the inadequacies of the alternative vote system—I will certainly not go into them in any detail—but the sheer unpredictability of the effect of using the second, third, fourth and fifth preferences on the part of voters casting their vote means that it would be more rational to have a lottery than to resort to this system. Moreover, there are varieties of AV. For some reason, the variety of the alternative vote system that those political parties and political leaders in this country who favour it have alighted upon is the system known as optional preference ordering. As my noble friend Lord Campbell-Savours explained very tellingly in the first day of our Committee proceedings all that time ago, the evidence from Australia is that, once you cease to insist that everyone voting under the alternative vote system has to fill in all the boxes stating their preferences, the upshot is that you get a large proportion of electors only casting a vote for their preferred party. In practice, therefore, the optional preference-ordering version of AV is very little different from first past the post. It does not seem to be a sufficiently worthwhile alternative to offer the voters in the referendum. I do not mind it being there, but other serious choices ought to be on offer as well.

[Lord Rooker]

Although I am not going to move anything, I shall use my notes. When the New Zealand Electoral Commission looked at this in respect of AV, it said:

“while the alternative vote might represent some improvement over plurality … we do not consider this improvement would be significant and do not regard it as the best alternative to our present system”.

The introduction of this would not be so much a reform but a complicated reshaping of what it already had. That is why it ruled it out. It was not even considered. It was one of the four options, but as far as the Electoral Commission in New Zealand in the early 1990s was concerned, it was not even a runner.

[Lord Howarth of Newport]

It must be wise to learn from the experience of other countries that have been ahead of us in considering these matters. I contend that STV, above all, should be a major option. My own amendment simply would have added it to the question that is set out in Clause 1 of the Bill: do you want first past the post?; do you want AV? I would have added the option: do you want the single transferable vote system?

I certainly do not intend to discuss at any length the merits and the demerits of STV. The virtues of proportional representation are that it is perceived by some as being fairer and that it tackles the problem—which I think is a very real problem and one of the explanations for the disaffection with our parliamentary system and our political culture that is so widely felt in this country—of the feeling that most people’s votes are wasted, that elections are determined by small minorities of voters in small minorities of constituencies, and that other voters hardly need to take the trouble to vote because it is not going to make any difference to the eventual outcome as to who forms a Government. That feeling of unfairness—the feeling that the system at the moment does not give adequate and equal force to everyone’s vote—is a real problem. To that extent, there is a case for STV.

People will not, however, agree about what fairness is. Some will say that a fair system is a system that creates representation in Parliament that is in exact proportion to the distribution of votes between the parties in the country as a whole. Others say that a fair and representative system is one that expresses and represents communities in Parliament. That has been our tradition. The defect of PR is, of course, that it ignores people’s sense of identity in their constituency. It means that you no longer have the single member constituency—the constituency in which one person of whatever party is elected to represent and serve all the constituents—which is a very precious and valuable part of our system.

Another unfortunate consequence of STV can be that it leads to a great deal of fratricide within parties as candidates seek to persuade people to vote for them rather than for other candidates in their own parties. I will not go on about the pros and cons, except to say simply that they are numerous on both sides.

[Lord Davies of Stamford]

Before my noble friend leaves the disadvantages of proportional representation in any form, does he agree that among its most serious problems is, first, that it dilutes individual responsibility, and secondly, that it greatly enhances the power of party bosses because of their power to move an individual around in the list on which the party is elected?

[Lord Howarth of Newport]

I agree entirely with my noble friend that these are further defects. PR condemns us to a perpetuity of coalition Governments and gives disproportionate power to third and lesser parties, as we have seen for many years with the Free Democratic Party in Germany. I would not wish to vote for it, but my point is that people should be allowed the opportunity to vote on all the serious choices that ought to be considered when we are contemplating the possibility of changing the electoral system. I am confident that first past the post would prevail and I would campaign for it, but it would be a salutary exercise in our democracy if we were to reconsider what our electoral system should be, with every reasonable option being available to the people.

I am surprised, therefore, that what Mr Clegg thought of as a “miserable little compromise” in offering the option of voting only for AV now appears to him to be a happy little compromise. I fear that he regards it as a stepping stone towards another referendum, which he hopes will not be long delayed, in which people, finding that they have been sold a pig in a poke with AV, decide that they do wish to move on to STV after all. In an earlier debate I quoted the Constitution Committee of your Lordships’ House, which deprecated the resort to referendums. Indeed, I think that to lead us from one referendum to the next because the first referendum offers an inadequate choice to the people that they quickly find unsatisfactory would be a thoroughly bad thing.

For these reasons, I support the amendment in the name of my noble friend Lord Campbell-Savours, and I hope that he will want to pursue it with all the vigour he can muster.

[Lord Newton of Braintree]

My Lords, I do not particularly want to follow the remarks of the noble Lord, Lord Howarth of Newport, not least in that I would not want to go down the partisan path he took in the middle of his speech, no doubt unintentionally. I do, however, want to find out exactly what is being asked because I found myself getting a bit open-mouthed at some of the things that the noble Lord, Lord Campbell-Savours, said. Do I understand that he wants a proposition that says, “Do you want change?”, to which in any normal circumstance, even if your wife says that you need a new dressing gown or pair of slippers, you ask what the alternative is? Then, when they ask you what the alternative is, you say, “We do not actually have an alternative. There are a dozen, 15 or 20 of them”. Once you have decided whether you want an alternative, the politicians will decide what alternative you want. I am bound to say that that totally lacks credibility, and I could not conceivably vote for it.

[Lord Falconer of Thoroton]

My Lords, at the heart of the amendment in the name of my noble friend Lord Campbell-Savours is the proposition that there has not been sufficient examination of what the right system is. It reflects the thump-thump-thump throughout this debate that there has been no adequate examination of the various voting systems. I notice that the noble Lord, Lord Newton of Braintree, who is very much to be admired, is indicating from a sedentary position a word that suggests he does not necessarily agree, but I do not invite him to express it.

That is not just my view; it is the view of the two Select Committees in both Houses of Parliament, it is the view that underlay the amendment of my noble friend Lord Wills calling for a commission of inquiry, and it is the basis upon which my noble friend Lord Campbell-Savours has put his amendment now. Like everything on Report, it is a refined version that says, “Let us have it, but only if there is a desire for change”. The fact that when Lady Newton of Braintree proposes that the noble Lord, Lord Newton of Braintree, buys a new dressing gown, he says yes, does not indicate that everyone, when confronted with change, says yes. Indeed, most people, when confronted with change on important political issues, tend to say no, so I will be interested to hear the view of the noble and learned Lord, Lord Wallace of Tankerness, on this issue, and the answer to the proposition that if the public want change, we should examine what the right change is before we give them only one choice.

16:13

[Lord Neill of Bladen]

Before the Minister answers that question, I must confess to being slightly baffled by where we are moving to. The Long Title of the Bill is that it is a Bill to:

“Make provision for a referendum on the voting system for parliamentary elections and to provide for parliamentary elections to be held under the alternative vote system”.

The amendment that the noble Lord, Lord Campbell-Savours, is putting forward drops those words about the alternative vote system. The question becomes, “Should the first past the post system be changed and a different system of elected MPs be introduced in the next general election?” We know from the many speeches that have been made that there are a mass of alternatives and variants. The population—the voters—are potentially voting for a whole series of different amendments. You have not then got the answer that you were meant to get. The Long Title goes on to say that it will provide for voting,

“under the alternative vote system if a majority of those voting in the referendum are in favour of that”.

They may be in favour of three or four different things. There is no single system for which they are voting. I find that a puzzling result and some thought needs to be given to it.

[Lord Wallace of Tankerness]

The noble Lord, Lord Campbell-Savours, has, as the noble Lord, Lord Neill of Bladen, has indicated, proposed an amendment which would take out the option of the alternative vote in a referendum and ask whether the system should be changed and a different system of electing MPs be introduced at the next general election. As the noble Lord said, a variety of different systems have been suggested.

I do not believe for a moment that this would lead to any clear outcome, even if this was the question that was asked. The public might reasonably be confused. What other system of elected MPs would be introduced? What kind of campaign would take place where perhaps a variety of different systems were being canvassed? How would the campaigns in this referendum marshal their arguments and present their case? You would get differing factions, with those who might want a single transferable vote, those who want the supplementary system and those who want the alternative vote. It would result in more questions being asked than answers being provided.

However, I can see that the main point that the noble Lord is trying to make is that there should be further thought on the system, if any, that should replace first past the post. I always find it touching when noble Lords opposite make speeches which appear to have the best interests of the Liberal Democrats at heart. It is very moving but, frankly, those who think that somehow the outcome of the negotiations might have been different were not actually there. Even to mention the possibility of the 1922 Committee being invited to endorse the single transferable vote only needs to be stated to show how unlikely an event that would have been.

[Lord Howarth of Newport]

Is it not a grievance to the Conservative Party that it can win more votes across the country, particularly in England, and still not be able to form a Government? Is the solution to its problem not then a system of proportional representation?

[Lord Wallace of Tankerness]

The noble Lord invited me to look to the best interests of the Liberal Democrats. I would not tread anywhere on looking at what might be considered the best interests of the Conservative Party.

If the referendum was on the question proposed by the noble Lord, Lord Campbell-Savours, and if the answer was yes, what would then be the follow-on from that? Would the Government propose a system that would have to be debated by Parliament? My noble friend Lord Newton of Braintree made a good point that you can ask the public if they want a change and if, they say yes, you then leave it to politicians to foist upon them what that change might be. Even if it was a question of, “Vote yes and we will set up a committee”, that is not really an appealing slogan on which to have a referendum campaign. Voters could reasonably claim that they had been cut out of a significant decision.

In moving his amendment, the noble Lord, Lord Campbell-Savours, said two things: that Parliament would take the final decision and that, inevitably, the next general election in 2015 would be fought on a different system from first past the post. Yet nowhere can Parliament be mandated to pass a Bill to make it an Act. We all know that a change in the electoral system would require primary legislation for it to come into law. If the voters have voted yes to wanting a change, what guarantee will there be that both Houses of Parliament would then manage to coalesce around what that particular change might be? It could be the worst of all worlds, with people voting for change and then finding that politicians have frustrated the change that they seek.

As has been made clear on a number of occasions, the attraction of the approach taken in this Bill is its clarity. We set out how the alternative vote system would work, as comprehensively done in Clause 9 and Schedule 10. Any questions about how optional preferential AV works can be resolved by looking at the Bill. That would not be the case with the noble Lord’s amendment. I urge him to withdraw his amendment and, if he seeks to push it to a vote, I invite noble Lords to vote it down.

[Lord Campbell-Savours]

Perhaps I can apologise for the somewhat staccato nature of presenting my amendment because I was caught short and could not work out finally which notes I had to refer to.

Let me answer the critically important question raised by the noble Lord, Lord Newton of Braintree. The facts are that no one, anywhere, has done any homework on how AV works. Maybe the Liberal Democrats have done some, to work out to what extent it will benefit them. In the event that the amendments had fallen in a different order today, I would have been able to produce earlier during our proceedings the evidence that I will produce under the next amendment—that is, figures which show that a complete miscalculation has been made by the Conservative element in the coalition as to how AV operates, drawing on the Dunleavy material from 1997. A lot of people have not done their homework and are presuming, because there is an item on the agenda that says “AV is presentable and works”, that somehow that is enough authority for Parliament to carry the legislation in the form that it has. No work has been done and, until it has been, it is highly irresponsible for any Government to present to the British electorate a question in the form in which this is currently being submitted. No work has been done.

All I was doing in my amendment was drawing attention to the fact that no work has been done and that all the electorate have to say is, “We do not want first past the post any more”. Then, Parliament could, by whatever means, with the aid of Government, establish inquiries to examine and evaluate all the systems and then come forward with recommendations. Let me be absolutely frank: once you have got rid of first past the post, due to the complexities of alternative electoral systems, it needs Parliament to decide on what system is selected. You cannot leave that very complicated question to the public. A complicated series of options—a whole of spectrum of systems—has to be placed in the event that you widen that offer to the electorate.

I stand by my amendment. Unfortunately, for whatever reason and the time factor, I will not have the opportunity of voting upon it today. After the next amendment, when I produce evidence of what happened in 1997, some Members of the Committee might well think, “I wonder what we are doing”. If I might put it bluntly, they know not what they doeth. I beg leave to withdraw my amendment.

Amendment 1A withdrawn.

Amendment 2

Moved by

[Lord Campbell-Savours]

2: Clause 1, page 1, line 10, leave out ““alternative” and insert ““supplementary”

[Lord Campbell-Savours]

I had hoped to speak at some length on this amendment on Report but understand that agreements have been made on Part 1 so I do not intend to delay the debate. Perhaps I can start by explaining why I have been pushing SV during the course of this legislation.

The supplementary vote is a variant on the alternative vote. It is one of the three systems which we have discussed at length in Committee. We have the Australian system, the Queensland system, and the supplementary vote system. It is not my favourite system for electoral reform—my favourite is a PR list system or an AMS system—but is a compromise. If you have two options on the agenda—alternative vote, Queensland, or alternative vote, supplementary vote—then I will always pick the supplementary vote. The reason I want to present the preamble to my case today on that basis is that I intend to criticise some aspects of SV along with AV. I am criticising a family of systems which generally come under the alternative vote.

To get the preliminaries out of the way, the supplementary vote is already used in 13 cities in the United Kingdom. It is used in the mayoral elections, and it was used in the London election to elect Boris Johnson. Many people think when they walk into the polling booth in London and vote for a mayor for London they are voting under an AV system. They are not. They are voting under a particular system within the family of AV systems, the supplementary vote, which is not what is on offer in this legislation.

The key question we have to ask about those 13 mayoral elections is whether the supplementary vote changes election results as against a first past the post system. It has done on four occasions, where the second-placed candidate on the second count has won the seat and where the first-placed candidate on the first count has, therefore, lost. In that sense, therefore, it can influence election results.

Furthermore, the supplementary vote was the recommendation of the Plant commission, which was established by the Labour Party in 1990 to evaluate different electoral systems. In Committee I read on to the record a part of the Plant commission’s report and its recommendations.

The next debate that took place on the supplementary vote took place in 1998, when London mayoral elections were established in the system in legislation. Nick Raynsford, who was then the Minister, in conjunction with many outside bodies which lobbied him on behalf of the various systems, decided that the supplementary vote was the appropriate system. It is a used and tried system within the United Kingdom.

I now want to move the debate from pushing my system within the family of AV to another argument. Within the family of AV systems there is a problem which has never been debated in Parliament. To know what the problem is you have to look at a paper produced immediately after the landslide victory for the Labour Party in the 1997 election. It was called Remodelling the 1997 General Election: How Britain Would Have Voted Under Alternative Electoral Systems by Professor Patrick Dunleavy, Helen Margetts, Brendan O’Duffy and Stuart Weir. This is the only piece of good, clear evidence of what happens when you introduce alternative vote systems within the United Kingdom. Again, however, it is an extrapolation.

I could spend an hour quoting from the paper but I have taken out the salient paragraphs which should influence opinion. The writers simulated what would happen under AV under the landslide victory for Labour in 1997. They said:

“Our simulation approach developed over the two 1990s elections seeks to get as close as possible to how a new system might work via several innovations … asking survey respondents to complete alternative ballots for the rival systems, immediately after they have voted in a general election”.

In other words, after they voted in a general election they then asked them questions. The paper continued:

“In 1997 ICM Research interviewed a sample of nearly 8,447 people across 18 regions of Britain for the project, achieving a response rate of 82 per cent”.

That is a very substantial sample, asking questions about how people would have voted under AV in 1997. They combined,

“regional responses for each type of voter and information from the general election on first preferences to extrapolate how second and subsequent preferences would be structured under the alternative voting systems at the level of local constituencies”.

The authors then took Queensland AV and SV and found:

“To simulate an SV outcome” —

Remember we are talking about a sample of 8,500—

“we looked at all 301 constituencies where the winning MP in 1997 had only plurality support, identifying the top two candidates who would go to the second stage of the count, and also those candidates who would be eliminated … The outcomes were dramatic”.

Tory MPs should read this stuff because it then says:

“Across the country as a whole the Conservatives would have lost”—

a further—

“55 seats, cutting their representation in Parliament to just 110 MPs”.

[Lord Tomlinson]

What’s wrong?

[Lord Campbell-Savours]

My noble friend might ask, “What’s wrong?”, and there may well be people in the Labour Party all over the country repeating, “Yes, what’s wrong?”. I will tell you what is wrong: we know it is wrong. We know if we were being reasonable, we could never have cut back the Conservative Party to 110 seats in 1997. It would have been a ludicrous result, producing, as the paper states,

“less than 19 per cent of seats in Britain compared with their vote share of 31.4 per cent”.

So here we have it. This system, we are told, is about fair votes; it is about somehow matching the number of seats with the votes cast in a general election, turning out in 1997, in the Labour landslide victory, 19 per cent of seats in Britain compared with their vote share of 31.4 per cent. That is a huge difference, and it is wrong that we should be introducing a system that potentially can lead to results on that scale.

“Such an outcome would be the most severe under-representation of the Tories in British history. The biggest reduction in Conservative seats would occur in the south west”.

It might well be there would be those who would argue, “Well, they are only Conservative seats that are being lost”, but it works both ways because AV exaggerates results and swings. You can get huge swings against a party which could just as well be the Labour Party and we, too, could be reduced to a rump. The Conservatives have simply failed to understand the dangers inherent in the system they want to introduce.

The paper goes on to point out:

“Under SV the Liberal Democrats would have won another 38 seats on top of their existing 46”.

We now know why they want to introduce the system. It clearly distorts. Then what does it say?

“Under SV Labour would also have gained 17 more seats, buoyed up by extra transfers from supports of eliminated Liberal Democrats, further boosting their already disproportionate majority, giving them over 68 per cent of British seats in Parliament on the basis of 44 per cent of the vote”.

This is this super system that we are introducing. This is the system we are told is fair votes. On the basis of the 1997 general election, the landslide victory for Labour, we would have won over 440 seats. What a ludicrous system. What a ludicrous proposition has been put before Parliament.

I go back to the amendment and the question posed by the noble Lord, Lord Newton of Braintree. People have not done their homework, and something needs to be done about that. We need a referendum question that invites people to say no to first past the post. Then let us get the inquiries established because the homework has not been done.

On the classic Queensland AV, the authors go on to say,

“We assessed AV’s impacts by examining whether the tiny differences in second preferences from the SV ballot would have changed any of the SV simulation outcomes in any constituency but we could not identify any such cases”.

The proposition before the House is that we do something we should not be doing. The Tory Government should stop this, and stop it now. We are on Report. They should go away and come back at Third Reading having fully considered the implications of the Dunleavy work from 1997. I know that the Minister will get up and say, “It doesn’t matter. It’s all gone through. It was approved by the House of Commons”, but they did not know what they were doing. They did not understand the implications of this system. We are dealing now with a major change in the constitutional arrangements of the United Kingdom. If we produce exaggerated results that would have given Labour 444 in 1997 and a massive majority much larger than we actually had, we are making a major error, and I appeal to the Government to think again before it is too late.

[Lord Foulkes of Cumnock]

That was a very powerful speech by my noble friend Lord Campbell-Savours. He certainly does his homework very effectively. Like him, I wish that some Members of Parliament had done it. In the past few weeks, I have listened to a number of Conservative Members of Parliament and to some Labour Members of Parliament, and I am not sure that they know exactly what they voted for and its implications not just in terms of the voting system, as my noble friend Lord Campbell-Savours said, but of the reduction in the number of Members from 650 to 600. That is something we will come to later. The purpose of a revising House is to try to draw attention to this, so I am really grateful to my noble friend Lord Campbell-Savours, as I am sure the House is.

I want to raise one point. What can we do to stop this misapprehension that everyone elected under this system of AV has achieved the support of 50 per cent of the electorate? We discussed this in a previous debate, and I think it was my noble friend Lord Rooker, in his usual eloquent way, who pointed out the various systems. As I understand it—I am open to be corrected if I am wrong because I do not want to go on if I am—if the system used is that everyone is required to use all their votes, so that if there are 10 candidates, they vote from one to 10, that does apply. However, as I understand it, in the system that has been proposed and that we are being asked to approve, that is not required. You can vote one, two or one, two, three or one, two, three, four and so on—

[Lord Grocott]

Or just one.

[Lord Foulkes of Cumnock]

Or just one, which my noble friend Lord Grocott and I would prefer. Yet again last week, in spite of the fact that this House has said it on a number of occasions and other people have said it, the Liberal Democrats—and I absolve the Tories of this—were saying, and the Guardian was repeating, that everyone elected under the system being proposed will have the support of 50 per cent of their constituents. That is manifestly untrue, and it is about time that the Liberal Democrats stopped spreading these lies.

[Lord Wallace of Tankerness]

My Lords, the noble Lord, Lord Campbell-Savours, has moved an amendment which would change the referendum question to ask voters whether the supplementary vote system should be used instead of first past the post rather than the alternative vote system. It will come as no surprise, because it is the content of the Bill, that the Government are committed to providing for a referendum to be held on whether the alternative vote system should be introduced for elections for the other place. We had these debates on a number of occasions in Committee.

I know the noble Lord, Lord Campbell-Savours, has a degree of authorship of the supplementary system that is used in the London mayoral election. We have heard on a number of occasions his concern about the alternative vote provisions in the Bill. It is always very invidious to say how people might hypothetically have voted when that was not the system that was used. The comments made by the noble Lord and the noble Lord, Lord Foulkes, were quite legitimate points to be made in the referendum campaign, when the parties and the different participants will take their own view about the merits and demerits of the alternative vote system. I can confirm that under the provisions in the Bill, which the noble Lord, Lord Foulkes, accurately described, voters may express a preference for as few or as many candidates as they wish or, indeed, for one. As the noble Lord rightly said, that could mathematically mean that not all Members elected to the other place had secured 50 per cent. As we debated last week when we were considering the material now on the website of the Electoral Commission for discussion, which will be sent out to stimulate interest and to explain the proposition before the voters on referendum day, that point is made in the material that it will be putting out.

Clearly the noble Lord’s amendment to adopt the supplement vote system will limit voters’ choice in expressing preferences for candidates standing at the election as they would be able to express a preference for one or two candidates only. The Government are not persuaded that the AV provisions in the Bill should limit the number of preferences that any voter may express at an election. We consider that not limiting the number of preferences that a voter may express under the alternative vote will enable MPs to be elected with a broader level of support, although I make the qualification that as you can cut off and do not need to vote for everyone, it will not necessarily mean that an MP will achieve 50 per cent.

As my noble friend Lord Strathclyde explained in Committee, the Government believe that the optional preferential form of the alternative vote is the right form of AV to be put before the people. For elections to the House of Commons, voters will be able to express preferences and should be able to express as many or as few preferences as they choose. They should not have their ability to express preferences constrained in the way proposed in the noble Lord’s amendment. The optional preference form of AV avoids voters being forced to vote positively for political parties that might be distasteful to them, such as those on the extremes of politics. There is no indication in the amendment about how in detail the supplementary vote system would work. The attraction of the Bill as it stands is that for all the arguments that might take place about how AV works, the Bill sets out that process in Clause 9 and Schedule 10. Questions about how AV works can be resolved by looking at the Bill. That would not be the case with the amendment, which lacks clarity. I therefore urge the noble Lord to withdraw it.

[Lord Bach]

I understand that the supplementary vote system is used in mayoral elections. Indeed, on 5 May, there will be a mayoral election in what I describe as God’s own city, Leicester. It is the first mayoral election that will presumably be under the supplementary vote system. If the Government get their way on this, it will be slightly ironic that at the next general election the public will also be asked to vote on whether an alternative vote system in the manner set out in the Bill should be adopted for the United Kingdom for future general elections. Do the Government intend to do anything about the way SV is used for mayoral elections, or are they content with it for that but not for AV generally?

[Lord Wallace of Tankerness]

I think the noble Lord, Lord Campbell-Savours, helped to devise the system for mayoral elections that we have inherited. There are no proposals to change it. We are talking about elections to the other place. I have made it very clear that we see the merit of a system where preferences can be expressed as far or as little as individual voters wish. For the purposes of electing the House of Commons, we prefer it to the supplementary vote which by its very nature limits the extent of the preferences that the individual voter can indicate. On that basis, I ask the noble Lord to withdraw his amendment.

[Lord Campbell-Savours]

My Lords, the noble and learned Lord, Lord Wallace of Tankerness, said that the Government believe that it is the best system. I dispute that. If he looks at his notes, he will see that that is what he read: the Government believe that it is the best system. Perhaps he would like to check his notes, but I wrote his words down. I will stand corrected if I misunderstood what he said.

All I am saying is that the Government may believe it, but Conservative Back-Benchers in the House of Commons have never been confronted with a real discussion. People do not know how this system works. I challenge any Conservative Back-Bencher here today to tell me, to assure the House, that Conservative MPs in the other place know how this system works. When these matters were debated in the other place, there were about five Conservatives in the Chamber. Everybody was whipped in to vote as part of a contractual agreement within the coalition. There has been no discussion. I cannot understand why Ministers are not listening to their own people. Why not carry out a consultation even in these last days of dealing with the Bill. Why do they not carry out a consultation on their own Back-Benches? They may even, if I might modestly suggest, send them a portion of the contribution that I have made to the debate, drawing on the statistics that have been produced following the sample poll of 8,500 people in 1998. Maybe it is then that they will realise what they are doing. Ah, finally we have tempted one out of the box.

18:00

[Lord Tyler]

If the supplementary vote is so persuasive and so self-evidently the best system, how was it that the noble Lord was unable to persuade his own party over many months that it was the best system? On several occasions, his own party produced proposals for the alternative vote, in the Constitutional Reform and Governance Bill, at the general election and then following the general election. If the noble Lord wants to be persuasive, why does he not start with his own colleagues?

[Lord Campbell-Savours]

I can give the noble Lord a very honest answer. It is because I, like many people in the Labour Party, woke up one day—I think that it was in December 2008—and read in the Guardian newspaper that we were going to insert an amendment into the Bill to introduce the alternative vote. We had no notice whatever that that was the intention of the Labour Government. That is the answer to the noble Lord’s question. We did not know anything, and if we had known we would have set out to block it—as happened in 1998 when Nick Raynsford was faced with having to take the decision on whether we picked SV or AV.

I shall deal with one point that the Minister raised, when he talked about giving everyone the opportunity to use all their additional preferences. In the work by Dunleavy with the 8,500 samples, this was the conclusion that he drew on exactly that question—that AV would have produced the same results as SV in 1997, so far as could be determined. That conclusion raises an interesting question about whether the multiple ranking of candidates under AV is really a worthwhile feature, compared with the simpler and perhaps easier-to-explain ballot paper and counting methods used in SV. The noble Lord, Lord Tyler, shakes his head, but that is based on a sample of 8,500 people in 1998. Where is the evidence to the contrary? There is none, because the homework has not been done.

I have made my case. If I am still alive in 10 years’ time, and if this referendum question comes back in the affirmative on the AV system, I will have the pleasure of saying, “I said that it wouldn’t work and I was able to forecast that freak results would completely discredit the system and lead to a further review of it”. I beg leave to withdraw the amendment.

Amendment 2 withdrawn

Amendment 2A not moved.

Amendment 3

Moved by

[Lord Howarth of Newport]

3: Clause 2, page 2, line 9, after “constituency,” insert—
“( ) the persons who, on the date of the referendum, have attained the age of 16 and who would be entitled to vote as electors at the subsequent parliamentary election,”

[Lord Howarth of Newport]

My Lords, my noble friend Lady Hayter of Kentish Town is unable to be in the Chamber this afternoon. She expresses her regret and asks if I might move Amendment 3, which is down in her name. I have another amendment in the group, Amendment 3A, which is intended to provide words to the same effect as my noble friend’s amendment, although my noble friend’s amendment does so more felicitously than mine.

Noble Lords will recall the arguments that my noble friend Lady Hayter put forward in Committee and the eloquence with which she did so, urging the House that those,

“who … have attained the age of 16 and who would be entitled to vote as electors at the subsequent parliamentary election”,

should have the right to vote in the referendum that will determine the electoral system under which the subsequent parliamentary election will be fought. For my part, I do not favour lowering the voting age to 16 for general elections. However, I submit to the House that the situation at this referendum will be entirely exceptional. I imagine and rather hope that it will be the only such referendum for many years, although one must acknowledge the possibility that if the choice of electoral options is not widened people may find themselves deeply dissatisfied, as my noble friend Lord Campbell-Savours has warned. So it is possible that there would be a public move to hold a further referendum before so very long, but at least we would not expect another referendum this side of the general election.

The future constitution and electoral system under which candidates are returned as Members of Parliament is the constitution and the system that will belong to the new generation in this country. It would be appropriate that those who have attained the age of 16 by 5 May should be entitled to participate in making this particular decision so that when they come to be able to exercise their vote for the first time at a general election, presumably in May 2015, they will have shaped the decision that determines how the election will be fought and what the voting system will be on that occasion. It is a simple matter of fairness. It would do something useful in engaging the interests and involvement of a new generation of young people, and I hope very much that the proposition will find favour with the House. I beg to move.

[Lord Dubs]

My Lords, I shall speak to the amendment in my name, Amendment 4, which is on a somewhat different issue, although it has been put in the same group—so, for the sake of speed, it is probably better that we discuss them as part of the same thing. I would not normally want to raise an issue like this, but there are two reasons why I feel it appropriate to do so on this Bill. First, we are being asked to agree to a referendum—and we as Members of this House will be allowed to vote in that referendum—that will determine how the voters of this country choose their MPs. Yet we in this House are not allowed to vote for MPs. This is a total anomaly. I do not want the Government to say, “That’s fine”, that they are persuaded by my argument, and then take away our right to vote in the referendum. But it is an anomaly in terms of logic; in the way that the provision is drafted, we have reached this somewhat illogical position.

My second reason for raising this matter is that I had the privilege of serving on the Joint Committee on Human Rights. The chair of the committee wrote about the issue of Members of this House voting and received a reply from the Deputy Prime Minister. I shall quote three sentences from the letter, because they are relevant to this Bill and this amendment. I quote from the middle of the letter from the Deputy Prime Minister to the chair of the Human Rights Joint Committee on 25 January. He said:

“The Lords sit in their own right. The Commons are elected by the remainder of the estate of commoners to represent them in Parliament. There was therefore no case for the Lords to vote to elect representatives, since they were able to sit in Parliament anyway”.

He goes on to say:

“The fact that members of the House of Lords have a voice in Parliament makes it legitimate to deprive them of a right to have their voice also heard through their elected representative in the Commons”.

That is also not a very logical argument, I say with respect to the Deputy Prime Minister. The issue about voting in elections is about choosing a Government, not about having a voice here. Of course, we have that after the election, but this is about deciding and helping to influence who will vote. I appreciate that if we did have the vote, the turnout of Lords voting in elections would be pretty well 100 per cent, because I know that we would jolly well rush off and vote. But that is not the key point in the argument. It is rather anomalous, when many of us here canvass hard for our parties in elections, that we have to admit to our fellow canvassers that we do not have a vote at all—“I’m just doing it for you lot”. That is how it works. It is an anomaly.

I do not think that the Government will bow to this argument now but I hope that they will accept that the Bill is illogical in this respect, and say that it is something that we should be able to consider at an early stage in order to put right this anomaly. If the House of Commons decides to give prisoners the vote—I hope that they will, although many people do not agree—it will be even more anomalous for us to be left out of the equation.

[Lord Strathclyde]

I am grateful to both noble Lords who have spoken, and I wholly understand why the noble Baroness could not be here to move her amendment. It will be no surprise to the noble Lord, Lord Howarth, that the Government have no current plans to lower the voting age. I recognise that there are different views on the question of whether the voting age in this country should be lowered to 16, but if we are to have that debate, it needs to be had in relation to elections more generally, and the passage of the Bill does not provide the right platform. It was ingenious of the noble Lord to say that, because the referendum is of constitutional interest, the voting age should therefore be lowered on this one occasion, but I am afraid that it cut no ice with me.

We do not think that these amendments would be practically sensible in the context of this referendum. No doubt, when the dust has settled on the Bill, there will be opportunities seriously to debate longer-term issues on voting age. Although the noble Lord has had a good go on the Bill, we do not believe that this is the right place for such a provision. The same goes for the noble Lord, Lord Dubs. He very carefully avoided the trap of saying that if we were to be logical, we should not give Peers the right to vote on the referendum. If we had done that, of course, he would have been the first to say that we should; and I think it is fair enough that we should.

The noble Lord, Lord Dubs, may not have realised, and I do not think that it was his intention, but the way his amendment is drafted would in effect make it impossible to run the referendum properly. The amendment leaves the date for the referendum intact, but because of the way it is written at the moment, no one would be able to vote in the referendum. The amendment’s intention is that Peers cannot vote in the referendum until the restriction on their voting in parliamentary elections is removed, but, taken on its true legal meaning, the amendment would effectively mean that we would have to postpone the referendum entirely until such a time as Peers are no longer disqualified from voting in a Westminster parliamentary election.

These two amendments are grouped because we believe that it is right that we should not muddy the water on the Bill by dealing with these issues differently from the way that we have done. The House knows that the Deputy Prime Minister hopes to come forward soon with proposals on the future of this House and that he is chairing a committee which comprises Members from all three major political parties. I am sure that in the course of debate on that subject we will, over time, reach greater clarity on the subject of Peers voting—if they are still to be called Peers—in general elections and in other elections as they come up. I hope that, on that basis, noble Lords will feel able not to press their amendments.

[Lord Howarth of Newport]

The Leader of the House is a hard man to cut any ice with, as he has shown consistently throughout proceedings on the Bill. He has stated rather than made his case that eligibility to vote in the referendum should be determined by the same principles as eligibility to vote in a general election. However, faced with his adamantine opposition, I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Amendments 3A and 4 not moved.

18:15

Clause 4: Combination of polls

Amendment 5

Moved by

[Lord Knight of Weymouth]

5: Clause 4, page 2, line 32, leave out subsection (1)

[Lord Knight of Weymouth]

My Lords, Amendment 5, in my name and that of my noble friend Lord Boateng, seeks to remove subsection (1) from Clause 4 and returns us to our debate in Committee on whether it is appropriate to combine the referendum with other voting: in this case, local authority elections in England, a local referendum in England or a mayoral election in England. I confess that I am currently not sure how I would choose to vote in the referendum. In many ways, I would like more time to consider the issues and balance up my feeling that the current system is probably not that fair with my unwillingness to get that worked up about it. Probably, therefore, I should just let the status quo ride, given that I am not that fussed about the change, but I need to think about that.

That is one basic, straightforward argument for not having this on 5 May, but we have had that debate already. There are specific problems with combining the poll with other elections that come down to two principal things—confusion in the campaign and confusion at the ballot box. Taking the first, I put a scenario to your Lordships, many of whom are familiar with political campaigning and the process on the ground—for many of us, that is partly how we got here. We are dependent these days on a large number of volunteers delivering leaflets, knocking on doors, phoning people up, tweeting and doing whatever else we do in modern campaigning and being, by necessity, partisan about how they do it when they are fighting things like local government elections here in England.

All this activity is geared towards polling day, when electors are to be turned out in one’s cause behind the candidate of one’s choice. I am concerned as to how, if there is a referendum on the same day as all that activity, political activists on the ground can simultaneously campaign on one or the other side of a very important question about how MPs get into the House of Commons and for their political party. They will be simultaneously what we might describe as comrades and opponents. It is very difficult to understand how that will work in practice.

I know that he is not in his place, but the noble and learned Lord, Lord Wallace of Tankerness, told us that he does not pay too much attention to Members on this side of your Lordships’ House trying to be helpful to the Liberal Democrats. I do not believe that this combination is at all in the interests of the Liberal Democrats. Among political activists, those volunteers on the ground who one would expect by and large to do a lot of the work in a referendum campaign, I do not believe there will be so many in the Conservative ranks or massive numbers in the Labour ranks—I do not believe that the majority of Labour activists will be campaigning for a yes vote. That will leave the Liberal Democrat activist base having to carry a substantial part of the workload in the yes camp in an AV referendum, and it will simultaneously have to defend actions that I will not go into but which have proved slightly controversial in their association with this coalition Government. I do not think, therefore, that this gives this question the chance to be properly debated and put to the country, because I do not think we will have a sufficiently resourced and balanced set of campaigns on both sides. Thinking through the practical implications, noble Lords, with their understanding of how elections and referendum campaigns work, will see that this is not very practical.

My noble friend Lord Bach of Lutterworth raised the Leicester mayoral election on 5 May. The same issues will arise there—this is not just about trying to combine local council elections on the same day as the referendum. Mayoral candidates might be asked to take a position on the referendum, and their political parties feel that it is appropriate to put on leaflets what their position is on the referendum question. We then get into complicated questions as to how election expenses are accounted for on those leaflets. Should a mayoral candidate be endorsed, we could continue to go on and on about the consequentials, and that is not the order of the day.

There is a fundamental danger that the referendum will be ignored by electors in terms of thinking about it, but they will participate in the end because they will turn out to the poll, the paper will be given to them and they will feel that it is their duty to vote. They will not have had the opportunity to give the proper consideration that this question deserves. Like me, at the moment, they are probably pretty much undecided, although they might have a bit of a gut feeling about which way they will go, and they need more time to think about it.

The second question is confusion for electors in the ballot box itself. Most of us are not used to referenda. I voted in the referendum—no, I did not; I was not old enough to vote in the referendum for membership of the European Union, and I do not think that a referendum question has been put to me since in any of the areas where I have lived, so I have never taken part in a referendum and I am not used to that scenario. It is probably straightforward enough to work out how the mechanism of the ballot paper works, but I am familiar with the scenario of being given quite a few ballot papers on polling day.

I live in a wonderful area of Dorset where we have both a borough council and a county council, and I have lived in areas where I have served on a town council. On 5 May, in parts of the constituency in Dorset that I used to represent—Purbeck—there will be town council elections and district council elections. I do not think that there will be any local referendum questions, but I would not put it beyond the wit of the people of Swanage to want to have a referendum on whether or not they want a free school in the town, because there are some people campaigning for that, so they might already have been given a third ballot paper. To add a fourth starts to create logistical challenges for the people who are administering the elections. How many ballot boxes do you need? Should you separate them off at the point of the votes being cast? In that case, you will need four in each of the polling stations. Should you go for one ballot box and then separate them all out, with all the potential for error that goes with that? Doing this creates all sorts of logistical problems for running an election and, most importantly, it has the potential to confuse electors with all these different pieces of paper that they will have to express their opinion with.

Clearly, this referendum should go ahead. It is very important that the question should be properly debated, with a well informed campaign. I do not believe that we can have that well informed campaign by 5 May. Thanks to the excellent work of my noble friend Lord Rooker, we now have the possibility of being able to have it between now and 31 October, with a whole set of amendments voted on by this House to make that feasible. I encourage the House to say that as a matter of principle it is too confusing to combine the polls. I beg to move.

[Lord Howarth of Newport]

My Lords, I agree with my noble friend Lord Knight of Weymouth. The issue at the referendum is simply too important for it to be right to confuse it with all the other campaigning issues that will be abroad in the land on 5 May. Campaigning armies stir up a great deal of dust, and we should not cloud this issue. It is a most important moment in the national life when people have the opportunity to decide whether they wish to change the electoral system for returning Members of Parliament. They should be allowed to consider that question in isolation, calmly and at reasonable length.

As we have noted again and again, there has simply been too little earlier and wider debate as a prelude to holding this referendum. There was no Green Paper or White Paper and no adequate scrutiny in the other place, while Select Committees of both Houses were obliged to produce their reports in some considerable haste. The quality of journalistic discussion of the issues of the referendum remains poor; as my noble friend Lord Foulkes observed just now, it is still being trotted out as a commonplace that the virtue of the optional preference system of the alternative vote will be that at any rate every Member of Parliament will be returned with no less than 50 per cent of the vote. That is not true, but journalists keep on recycling this inaccurate account of what the optional preference system of the alternative vote will provide, so we and the Electoral Commission will need longer to inform the people about what is at issue. If the people are distracted and confused by a whole lot of busy, energetic vocal contention about a series of other electoral issues, I do not think that they will be able to reflect with the care that they need and gain the clarity of view that they ought to have when they take this immensely important decision.

One of the Government’s justifications for holding the referendum on the same day as other elections on 5 May is that it will improve turnout. I question that. There will of course be plenty of voters willy-nilly in the polling booths—they may or may not wish to use all the different bits of paper that are handed to them as they go towards the booths—but I am not sure that, not having had the opportunity to consider with the care and thoroughness that responsible citizens would wish, they will necessarily be disposed to vote in the referendum as well as in the other elections. In all events, we will get a better quality of turnout and a more thoughtful one if we have the referendum on a separate date.

It seems wrong in principle and particularly inappropriate that the case should be made that having a referendum on the same date as other polls will cause a higher turnout when in London, this capital city, there will be no local elections on that day. There will be differential turnout and there will be the most detrimental effect; if the proponents of the argument that it should be held on the same day in order to improve turnout are correct, it will follow that Londoners will have less of a voice in this crucial decision.

Additionally, there is the question of respect to the Scottish Parliament and the Welsh Assembly. The Scots have expressed themselves already in no uncertain terms; they consider that it was disrespectful to them that the coalition Government simply decided that they were going to impose a requirement to hold a referendum on the same day as the elections to the Scottish Parliament, and your Lordships’ Select Committee on the Constitution was also censorious on that point. The Welsh, similarly, do not like it; they had already decided that the other referendum to be held in Wales in the early months of this year, on the question of whether there should be an extension of primary legislative powers to the Assembly, should be held separately in March so that it should not be confused and clouded by the other campaigns and the other voting on 5 May.

There will be problems at a practical level for returning officers and counters, and in determining what expenditure is to be attributable to which campaign. These are not negligible considerations either. Even at this stage, it would be the right thing for the House to recognise that it would be detrimental to all the campaigns—detrimental to the clarity of conduct of the referendum campaign, but equally so to the clarity of conduct of the local, Scottish parliamentary and Welsh Assembly election campaigns—if they were all to be cluttered and confused on the same day. It would be better to draw back, have a better quality of campaign over a more sensible timescale for the referendum and hold it on any of the dates that are now made possible in consequence of the amendment that the House made in Committee about the requirement regarding the date on which the referendum should be held.

18:29

[Lord Touhig]

My Lords, briefly, my Amendment 5B would leave out subsection (2) and prevent the AV referendum being held on the same day as the Welsh Assembly elections. As in other parts of the country, the people of Wales will face voter fatigue. On 3 March, as my noble friend Lord Howarth has mentioned, we have the referendum on more powers for the Welsh Assembly. That is very important; it could change the way in which the Assembly works in its relationship to the Government and Parliament and might have long-term implications for our constitution. On 5 May, we have the elections for the Welsh Assembly, and now the Government want to hold the AV referendum on that date as well.

It is with a heavy heart that I say to the Government that throughout this debate they have shown nothing but contempt for Wales and its people. Wales is to lose one-quarter of its parliamentary constituencies. Twenty per cent of the whole reduction in the number of parliamentary constituencies throughout Britain is expected to come from Wales. However, despite our debate on Wales, which some noble Lords said was the best debate we had in the House throughout this Bill, the Government were not prepared to move. I say to the noble Lords on the government Benches that Wales is not a colony run by governors-general. We are used, with the exception of the noble Lord, Lord Crickhowell, to Conservative Secretaries of State who do not represent Welsh seats sitting in London in government, but Wales is not a colony. We are part of the United Kingdom and a nation in our own right. We deserve to be treated better than this.

The Government have so far been unwilling to move. If they are not prepared to move on this matter, households in Wales will, over the next few months, face a deluge of material through their letter boxes—material saying yea or nay to more powers for the Welsh Assembly, material for the Assembly elections from all the parties and material saying yea or nay to AV. Our National Assembly is still young and still growing. It still has a long way to go to win the hearts and minds of the people of Wales and establish itself in the way that its Members would wish. However, its role may change even further after the referendum on 3 March. We should give the Welsh Assembly election the dignity and status it deserves. It should be held alone, without any other election that day.

What really annoys me about this whole issue is that the Conservatives do not support AV; the Prime Minister says that he will campaign against it. The Liberal Democrats do not support AV; their leader has described it as a “miserable little compromise”. Yet such is the Government’s opinion of Wales that they are prepared to treat its people in this most disrespectful manner and push through holding a referendum on AV on the same day as the election for the Welsh Assembly. I say to the noble Lords on the other side only that if they persist in this way, the Conservatives and the Liberal Democrats will pay a heavy price come the next election—and they will certainly deserve to.

[Lord Foulkes of Cumnock]

My Lords, that is almost a reason not to support the amendment to which my noble friend Lord Touhig has spoken. I will say just a few words in support of Amendment 5D in my name and that of my noble friend Lord McAvoy. As my noble friend Lord Howarth said, the Scottish Parliament, by a substantial vote of 90 to 30, called on this Parliament and the Government not to hold the referendum on the same day as the elections to the Scottish Parliament. The Prime Minister Mr Cameron, when he was elected, spoke about an agenda of respect—of mutual respect—for the Scottish Parliament. However, one of the first things that the Government did was to ignore the views of the elected Scottish Parliament—the people who know best because they are there on the ground and will campaign in the election. That is one strong argument in favour of the amendment.

The second is that there will be two confusing campaigns. In a previous debate, when I indicated my total support for the sane and sensible remarks of the noble Lord, Lord Forsyth, even Members of this House drew a sharp intake of breath at that unusual alliance. That alliance will be there again—campaigning in Scotland against AV, which the noble Lord, Lord Forsyth, and I are both against. However, we will be campaigning on opposite sides in the Scottish parliamentary election, and that will cause confusion. I use the noble Lord, Lord Forsyth, as just one example. There will be many such people. Indeed, I previously said that the noble Lord, Lord Strathclyde—whom I remember saying he was against AV early in the debate—and I could be tramping the streets of Mauchline together on the same side in the referendum but on entirely different sides in the campaign for the Scottish Parliament. That will cause confusion. The posters will be confusing, as will the campaign with loudspeakers. I am not allowed to repeat arguments but, as I said previously, the two campaigns will cause confusion.

My last point is about the franchises. I have made the point before but will make it in a different form now because the Ministers have still not addressed it. There will be difficulty in dealing with two substantially different franchises when in Scotland, as my noble friends know, many Polish, German and French people will be entitled and able to vote in the Scottish Parliament election but not in the AV referendum. It will cause great confusion, which would not arise if the polls were not held on the same day. Respect for the views of the Scottish Parliament and the confusion caused by two campaigns and two franchises are very powerful arguments that should make the Government think again.

[Lord Dubs]

My Lords, my noble friend Lord Knight and others have indicated clearly why it is not appropriate to hold the referendum on the same day as these other elections. My amendment refers to Northern Ireland, and I briefly add a Northern Ireland dimension to further the arguments that have already been made. I remember, about 11 years ago, the referendum in Northern Ireland on the Good Friday agreement. It also took place in the Republic on the same day. The build-up to that referendum was enormous. Everyone in Northern Ireland knew what the issues were. A brochure on the Good Friday agreement had been put through their door. Friends of mine who lived there discussed at home how they would vote in the referendum. It was very clear. It was a single issue and one of crucial importance to the people of Northern Ireland.

I contrast that with what will happen this time. Very important elections for the Northern Ireland Assembly and for district councils are to take place in Northern Ireland. A great deal has happened since the last Assembly elections to the balance of power between the DUP and the Ulster Unionists and so on. These elections will be very important and rather different in tone, content and substance from a discussion on the voting system for general elections.

The political parties in Northern Ireland are also entirely different from those here. I am not sure where the Conservative Party and the Ulster Unionist Party will stand in the future. They were together at the previous general election; that agreement may or may not last into the future, but this is not the occasion to debate that bit of folly. The parties are different, so there is no carry-over from, say, Lib Dem policies to what will happen in the referendum.

As was mentioned earlier in a brief discussion between the noble Lord, Lord Alderdice, and the noble Lord, Lord Reid, the voting systems in Northern Ireland are different anyway. STV is used for both the Assembly elections and, as the noble Lord, Lord Alderdice, said, the district council elections. The starting point is very different, and that is what will be in people’s minds—not the election process for general elections. The possibility of confusion will be enormous. The Northern Ireland argument is at least as strong as, if not stronger than, the arguments that have been put forward by my noble friends. It will be confusing and I do not think we should do it.

[Baroness Liddell of Coatdyke]

My Lords, I support the amendments of my noble friends, but I also ask a specific question of the Leader of the House. Over the weekend the Scottish media brought to my attention the speculation that the budget of the SNP minority-controlled Administration in Scotland could be defeated, and that that could lead to an early dissolution of the Scottish Parliament. Given that everything we have debated in Part 1 of the Bill is predicated on the Scottish Parliament elections taking place on the same day as the referendum, what is plan B if it transpires that the Scottish Parliament elections take place in March? There is speculation that it could be in March. As an Ayrshire man, the noble Lord, Lord Strathclyde, will recognise the expression,

“The best-laid schemes o' mice an' men

Gang aft agley”.

Things frequently “gang aft agley”. Will the noble Lord reflect upon this and give us some indication of what would happen?

The noble Lord deployed a very powerful argument that the reason for putting both on the one day was because of the £12 million cost of the referendum. It would seem that we might have a general election in Scotland in March and then a referendum on 1 May at a quite disproportionate additional cost. I would therefore be very interested in plan B.

[Lord Falconer of Thoroton]

My Lords, I understand the current position to be as follows. The AV referendum can, but does not have to, take place on the same day as the other elections that we have been referring to in this group of amendments. As I understand it, Clause 4(8) deals with the position if they do not occur on the same day. The amendments on the local authority elections, local referendums, Northern Ireland Assembly elections, Welsh Assembly elections and Scottish Parliament elections would all, in effect, forbid those elections to take place on the same day as the alternative-vote system. That is the issue; we should not be allowed to combine. The Opposition support all the amendments that would prevent combination, in effect, for the arguments that we have already heard.

First, there is a swamping of the AV issue. The Constitution Committee of this House wrote a report that said that, where you combine elections with a referendum, the evidence from other experiences shows that there is a tendency that the elections to Assemblies that affect peoples’ lives will swamp the question. This is a bad conclusion to reach because we all agree upon the importance of the question. Secondly, if you have so many elections in so many places, it puts pressure on the organisation—see what happened in the 2007 Scottish elections as a result of more than one occurring on the same day. Thirdly, there will be differential turnout—namely, some places may have higher turnouts than others because there are elections. It would be wrong for the result of something as important as this to be determined simply by the coincidence of elections of another sort being held. Fourthly, there is a lack of clarity. It becomes more difficult for the public when a person who is standing for election says one thing that people support and then opposes a particular proposition that the public might otherwise agree with. Fifthly, there is a lack of respect. Respect between the Parliaments is important. The decision was made to combine without there being any consultation whatever.

There appears to be only one argument in favour: the saving of approximately £12 million. This is a significant amount of money. It is worth ensuring that having a clear and simple vote on the question of whether there should be an alternative vote system is dealt with properly and with clarity. The Opposition support the whole range of amendments that would prevent combination.

18:45

[Lord Strathclyde]

My Lords, noble Lords opposite have expressed a clear and consistent view about combining these elections on the same day. The noble Lord, Lord Howarth, used the word “confusing”. The noble and learned Lord, Lord Falconer, used the word “swamping”. The noble Lord, Lord Foulkes, also said that it was confusing and so on. There is this thought—this idea that I have picked up loud and clear—that it will be difficult and awkward for the electorate to take a view and for the various organisations to campaign effectively. I am not saying that noble Lords opposite do not have a point, but I think that we have dealt with them. Indeed, the Electoral Commission said recently:

“We have always recognised that there would be both advantages and disadvantages associated with holding elections and referendums on the same day … On balance, we believe that it should be possible to deliver the different polls proposed for 5 May 2011 if the key practical risks to the successful conduct of the scheduled elections and a UK-wide referendum are properly managed”.

We have worked with the Electoral Commission and others in government on the combination of provisions in this Bill to make sure that the combination rules are conducive to well run polls on 5 May.

There are good reasons to combine them all on the same day. It is significant that we will increase turnout. That is one of the many good reasons for holding a referendum on this date. The noble Lord, Lord Dubs, mentioned London. It is true that there will be no elections in London. However, in other parts of the country, there will be, which means that 84 per cent of the electorate of the United Kingdom will be going to the polls on 5 May. This strikes me as an important and significant reason to have them on that day.

Crucially, all the amendments seem to misunderstand the nature of combining polls. I know that some noble Lords would rather not have the referendum on 5 May. However, preventing it from being combined with other polls is not the way to express these concerns. The simple administrative process of combination allows polls that are happening on the same date to be taken together, polling cards and polling stations to be shared and so forth. The consequences of these amendments would be that the referendum and scheduled polls could take place on the same day but that they would not be combined administratively. Naturally, this would result in a waste of money, in logistical difficulties for electoral administrators and in inconvenience to voters.

What is the reason for combination? The first is money. It will save the taxpayer approximately £30 million, which is a significant amount of money when compared with the cost of holding the referendum on a day when no other polls are taking place. The savings will be made because the costs of particular relevance can be shared between different polls being held on the same day. For example, costs of providing polling stations, hiring premises and equipment, paying polling station staff, and the savings can and will be shared between the referendum and the other polls taking place on 5 May. I also advise that the referendum will be administered on the same boundaries as the elections that are scheduled to take place across the whole of the UK on 5 May. From an administrative and cost point of view, it therefore makes sense to run them as combined polls.

The noble Lord, Lord Touhig, specifically mentioned the situation in Wales, where, unusually, there will be a referendum and then elections. My understanding is that the coalition Government and the Welsh Assembly Government agree that it would not be to anyone’s advantage to ask electors to vote in three polls—for the Welsh referendum, the AV referendum and the Welsh elections—in the space of a few months. The so-called respect agenda in Scotland is also an important question, but again I think it was right for the Government to make the announcement to Parliament. This showed a respect for Parliament rather than to the devolved Assemblies and Parliaments.

There will be the scope for confusion. However, I believe that those who are running the yes and no campaigns have ability and judgment. In fact, the noble and learned Lord is taking part in one of those campaigns. I am sure that he and his colleagues will be able to see their way through this and run a successful referendum combined with the other elections on 5 May.

[Lord Knight of Weymouth]

My Lords, the Leader of the House has attempted to justify this combination and has tried to respond to some of the points made in the debate. However, his central argument hangs around money and convenience more than anything else. He said that the Electoral Commission considered that the situation we are discussing is just about possible provided all the risks are managed, but we needed to hear more about what those risks are and how they are to be managed. The noble Lord, Lord Howarth, referred to differential turnout, and the noble Lords, Lord Touhig and Lord Foulkes, discussed competing franchises, the problems with the respect agenda in Wales and Scotland and the acute confusion in Northern Ireland. However, I did not hear how those risks, and the ones that I raised, would be managed. Therefore, I am not minded to withdraw the amendment. I wish to test the opinion of the House.

18:50

Division 2

Ayes: 154

---

Labour: 138
Crossbench: 7
Independent: 3
Democratic Unionist Party: 2
Conservative: 1

Noes: 232

---

Conservative: 132
Liberal Democrat: 64
Crossbench: 26
Ulster Unionist Party: 3
Bishops: 2

19:07

Amendments 5A to 5E not moved.

Amendment 5F

Moved by

[Lord Foulkes of Cumnock]

5F: Clause 4, page 2, line 40, at end insert—
“, but the count for the Scottish parliamentary general election shall not be delayed as a consequence of the combination of polls.”

[Lord Foulkes of Cumnock]

My Lords, I move this revised amendment in substitution for the original Amendment 5F. I thank the Clerks in the Public Bill Office for helping me to revise the amendment and bring it into order. It appears before noble Lords rather late in the day, but that would not have happened if there had been the normal period between Committee and Report stage. I hope that the House will forgive me for moving this revised amendment. I am most grateful to the Clerks for their speedy revision on my behalf.

Last Monday, following a report in the Scotland on Sunday, I said that there was great concern throughout Scotland that—as the noble Lord, Lord Forsyth, said earlier, and as my noble friend Lady Liddell of Coatdyke has also said—if the count is not taken immediately after the close of polls in the Scottish parliamentary election, some of the excitement, and a speedy follow-up with the announcement of the result, could be lost as a result. As noble Lords who have participated directly in elections will appreciate, the public’s interest in the election is important. It is an entirely separate issue, as the noble Lord, Lord Forsyth, pointed out, from the question of whether the count for the parliamentary election is held before the referendum count. We accept the sequence—the noble Lord, Lord Wallace, explained it on a previous occasion, although it is the subject of another amendment in this group—and we accept the explanation. The question relates not to the order in which the counts are taken but to their immediacy.

As noble Lords from Scotland will know, I am not one to kowtow to the Scottish media—far from it. There are some people in the Scottish media for whom I have great respect. There are others for whom I do not. Nevertheless, it is an important part of elections that, immediately after the casting of votes, people go to the count with adrenaline coursing wherever adrenaline courses. They take part in the count and see the way things are going, and the result—in particular in Scotland in the 73 first past the post constituencies. As the noble Lord, Lord Forsyth, rightly said, after this election there may not be a coalition that will take some time to form; there may be a clear result. The way that the polls are going, with a substantial lead for Labour, a clear result is becoming more likely. People will want to know how things are going in the constituencies.

This would not be an issue, but some—although not all—returning officers have said that it will be difficult to carry out the count immediately because the counters will be too tired. They may have been polling officers in polling stations before moving on to do the count. Of course, that problem can be dealt with if different people are used for the count. Fresh people can be brought in, if necessary, so that we get the result. The candidates, agents and supporters of the parties will stay up late into the night for the results to come through. It is part of the British and Scottish tradition that we see the results come through. The TV will cover it. It will get more people interested in the Scottish elections and make them more likely to take part in future.

[Lord Forsyth of Drumlean]

Perhaps I have misunderstood this. Obviously the noble Lord has studied it more carefully than I have. Perhaps he can explain why this could not be resolved simply by having two ballot boxes, one for MSPs and one for the referendum. Would that not resolve the problem of tiredness? I do not think that people will be waiting anxiously for the result of the poll on AV.

[Lord Foulkes of Cumnock]

That question was raised on a previous occasion in Committee. The Minister—I think it was the noble and learned Lord, Lord Wallace of Tankerness—said the problem was that some electors might inadvertently put a ballot paper for the election into the ballot box for the referendum. The noble Lord, Lord Forsyth, sighs and shrugs his shoulders, but that was the explanation given by the Minister. I agree that the first thing that needs to be done is the validation of ballot papers. However, once they have been validated, which should not take very long, the referendum ballot papers can then be put aside for whenever that count will take place, and the count can be started of all the ballot papers for the Scottish Parliament elections. I do not think that opening ballot boxes and verifying ballot papers will cause much delay. It will delay things a bit, but not as much as stopping the count altogether and starting the next day, which is what some returning officers have suggested.

19:15

[Lord Forsyth of Drumlean]

I return to the point about people putting ballot papers in the wrong boxes. Surely it is not beyond the wit of returning officers to organise a polling station in such a way that that is avoided.

[Lord Foulkes of Cumnock]

I agree with the noble Lord. I was going to say “my noble friend”: that is the way things are going. There are some strange bedfellows already in the coalition, but I am not suggesting that there should be any others. If the amendment is passed, accounting officers and returning officers are more likely to ensure that all the ballot papers go into the appropriate boxes. It will put greater pressure on them if, in the terms of my revised amendment,

“the count for the Scottish parliamentary general election shall not be delayed as a consequence of the combination of polls”.

If that is agreed by this House and by Parliament, that would put pressure on the returning officers to make sure that people cast their votes in the appropriate ballot boxes.

[Lord Kilclooney]

My Lords, if the count for the Scottish Parliament gets priority over the count for AV, does that mean that the results for AV in Scotland will be revealed much later than the results for AV in England?

[Lord Foulkes of Cumnock]

No. In England, Northern Ireland and Wales, the sequence is that the AV count will follow. The sequence is the same in each part of the United Kingdom. I propose not to change the sequence but to bring further forward the AV count in Scotland, because we will have the Scottish parliamentary election count earlier. If that takes place immediately, the AV count will be brought forward. This excellent amendment has that limited advantage as well. I am most grateful to the Public Bill Office for advising me. Strong views on this are held in Scotland. I know that the noble Lord, Lord Strathclyde, who is replying to this debate, takes as much interest in the Scottish parliamentary elections as I do. I have seen him at counts in Ayrshire on occasions. Usually I am smiling and he is not, but I am sure that he will not worry about that and will give the amendment sympathetic consideration.

[Lord Lipsey]

My Lords, my Amendment 35 in this group has much the same purpose, namely to deal with the worries that have been expressed in the Scottish press and in this House about the count in Scotland. It has had the effect of flushing out some reassurance. The Electoral Commission has publicly stated that instructions to the returning officer in Scotland will be that the count on the AV referendum is not to start until 4 pm. There may still be a case for putting this in the Bill. I look forward to the Minister’s response to this short debate.

[Lord Martin of Springburn]

My Lords, I was interested to hear the noble Lord, Lord Foulkes, say that he did not kowtow to the press. He agreed to sponsor me in this House. We had a discussion a fortnight beforehand and I said: “George, try to keep your name out of the newspapers”. He did, but hard as he tried, he could not keep his name out of the papers. He certainly does not kowtow to them, but he does make sure that he is in them.

There is an important principle here about the count taking place in a few hours after the close of the poll. Every political party represented in this House and in the other place depends largely on volunteers giving up their time to help in the political process. Without them, we would not have the political parties or the democratic process that we have. These men and women work months in advance—they are working now—to try to win their party a seat in their constituency or, in Scotland, on the list. They give of their time and sometimes they take holidays in order to do so. They negotiate with their employers to take a holiday that they are due and, when election day arrives, they take the day off. For manual workers and blue collar workers, that means giving up a shift, and they can well manage to stay on till the small hours of the morning and hear the result for which they have worked so hard. Sometimes they are disappointed; on other occasions, they are over the moon. However, it would be different if the count were left until later. It would not be practical for people who are paid an hourly wage to stay on and lose another day’s income. For that reason, it is important that we keep the tradition.

There is also the comradeship that one finds at the count. It is a great gathering place. Perhaps you will not have seen party workers with whom you are friendly other than at a conference and you ask how things are going in their constituency. There is banter and even friendly rivalry between the parties. It is a good time for political people to all be under one roof, and I think it is a tradition that we should keep. For young people, it is a way of learning about the political process—how to take guidance from the agent or how to be a count agent—and to see the process in action.

I do not think it will have been forgotten that the last count at the Scottish elections was an absolute shambles. Electronic equipment had been brought in to do the counting, although everyone was used to manual counting. The machines did not work and, as a result, at certain constituencies the counters and returning officers had to seal the boxes and even the whole building, allowing the workers to go home to rest and come back the following day. I ask the Minister to ensure that that shambles does not happen again.

During the debates on this Bill, I have mentioned the Electoral Commission. I have no reason to pick on the commission but it will have to learn from its mistakes. It had some input into the decision to use electronic equipment at those Scottish elections and, because of that, it was not possible for independent adjudicators to find out what went wrong—in other words, they could not carry out an investigation. The taxpayer had to pay for a gentleman called—if my memory serves me right—Mr Gould to come from Canada to do the investigation, and the cost involved was substantial. That would not have happened had the Electoral Commission had some foresight. My criticism is that it tends to jump in without thinking through the consequences. Therefore, I hope that the counts that take place during the night and the wee hours of the morning continue and that we will learn from the mistakes of four years ago.

[Lord Kilclooney]

My Lords, earlier I raised the concerns that exist in Northern Ireland. I can understand the concerns of the noble Lord, Lord Foulkes, regarding how the count will proceed in Scotland, where two elections are held on the same day. The position in Northern Ireland is more confusing because we have three elections on the same day. I warned that this could cause confusion and over the past few days I have certainly experienced increasing unease in Northern Ireland about the count following these three elections. Two will be based on STV—one to the Northern Ireland Assembly and one to the district councils—and the third one on AV.

When I raised this matter with the noble and learned Lord, Lord Wallace, he said that when he came to respond to this amendment we would get an answer on what priority would be given to the counts for the three elections in Northern Ireland. Therefore, I should like to know in which order the counts for the three elections in Northern Ireland will take place, and whether we will have to wait for the result on AV to come through in Northern Ireland or whether it will come out at the same time as in England, Scotland and Wales.

[Lord Falconer of Thoroton]

We support the principle behind these amendments, which is for the AV count to take place after those for the Welsh Assembly, Scottish Parliament and local elections, the local elections count being caught by the amendment in the name of my noble friend Lord Lipsey. Whether that requires an amendment to the Bill or whether it can be dealt with by a clear statement from the Minister depends on what the Minister says, but we support the approach of these two amendments.

[Lord Strathclyde]

My Lords, it is useful to have had this short debate on this subject and I hope that what I say will be welcomed by the noble Lords, Lord Foulkes and Lord Lipsey, in whose names the amendments stand, and by others who have spoken in the debate. It is always good to hear the noble Lord, Lord Martin of Springburn, talk about great traditions. He finds great comradeship—if that is the right word—on traditional matters. In the dim and distant past I have been present at Glasgow counts, as well as at Ayrshire counts, so I understand what he means about the comradeship that occurs.

We debated this matter in Committee, when my noble and learned friend Lord Wallace made it clear that the parliamentary polls will, once everything has been verified, be counted ahead of the referendum poll. That is the principle that will underlie everything. The Government’s policy is very clearly that the votes relating to the elections, wherever they take place, will be counted before those of the referendum. The referendum count will come last, and the chief counting officer can, using her power of direction under paragraph 5(5) of Schedule 1, direct counting officers in the discharge of their functions or require them to take specified steps.

I refer noble Lords to the paper published by the Electoral Commission in December 2010, which is also available on its website. It sets out the chief counting officer’s intention to direct that the referendum count should not begin before 4 pm on Friday 6 May. The noble Lord, Lord Lipsey, referred to that. The decision to start counting the ballot papers cast in the referendum poll at 4 pm was reached in the light of discussions with the senior returning officers from all areas of the UK and followed consultation with a number of interested organisations and affected parties, including electoral administrators.

The timing of the count is ultimately a matter for the chief counting officer to direct. I understand that the Electoral Commission is satisfied that the assumptions underpinning this direction will mean that the referendum count should not delay the results of the scheduled elections. I am also aware that specific discussions between the commission and administrators are taking place to ensure that counting officers in Northern Ireland are equipped to carry out concurrent counts and that, in any event, this should not result in a delay in the results being announced for any poll. Therefore, I do not consider that this issue needs any further clarification in the Bill.

To those such as the noble Lord, Lord Foulkes, who would like a quick result, I say that the Gould report, which he will know well and has prayed in aid, considered overnight counts and came out clearly against them. Gould said:

“We recommend that if the polls continue to close at 10:00 pm, there should be no overnight count of the ballot papers ... To achieve the highest level of confidence in the counting process, it is essential that the emphasis is on the quality of decision-making related to the count, not on the speed with which the count is conducted”.

19:30

[Lord Forsyth of Drumlean]

Perhaps I am mistaken, but did not the Gould report also recommend that we should not combine referenda or other electoral tests with elections to the Scottish Parliament?

[Lord Strathclyde]

My Lords, different bodies have said different things on different occasions. We are entirely happy that we have the confidence of the Electoral Commission and other bodies to do it in this way.

The noble Lord, Lord Kilclooney, asked about later announcements—how they would be made across the United Kingdom and whether they would all be made at one point. I can confirm to the House that there will be one announcement for the whole of the United Kingdom. That is one of the reasons why the Electoral Commission is organising the counts.

Any provision that seeks to add specific provisions to the timing of the count may well be complex and would be apt to confuse administrators at this late stage. It is likely that any amendment would need to be replicated for each election on 5 May. We have a clear statement of government policy and the clear view of the Electoral Commission. I hope that that is sufficient for the noble Lord, Lord Foulkes, to withdraw his amendment and for the noble Lord, Lord Lipsey, not to move his.

[Lord Foulkes of Cumnock]

I have received the Minister’s response with mixed feelings. He prays in aid of Lord Gould—it was the noble Lord, Lord Martin, who mentioned Lord Gould—and I remind him that, although the noble Lord, Lord Tyler, was shaking his head, the noble Lord, Lord Forsyth, was right to say that Lord Gould recommended that the polls should be separate.

[Lord Martin of Springburn]

The person I referred to was not the noble Lord, Lord Gould; he was a Canadian gentleman. He certainly was not a Lord.

[Lord Foulkes of Cumnock]

I have a noble friend Lord Gould, whom I absolve of any responsibility for this.

Mr Gould, the Canadian, suggested that the elections should be separated. In fact, the Scottish Parliament took a decision to delay the local government elections for a whole year as a result of that and suddenly it finds the referendum spatchcocked in to create extra problems for it. Although extra problems will be created, they are not in any way as bad as the problems described by the noble Lord, Lord Martin, where the electronic counting came on top of the voting on two ballot papers, one of which was the most confusing I have ever seen in my lifetime—and I have seen ballot papers in the Soviet Union, the United States of America and elsewhere. It was a crazy ballot paper. I hope and expect that these ballot papers will be simpler and that the count can take place.

I am disappointed that the Minister still presses that the count should not be held overnight. I am worried that the chief counting officer will have responsibility for this. As I understand it, the chief counting officer is the chair of the Electoral Commission. What the noble Lord, Lord Martin, said about the Electoral Commission will be echoed by a number of Members in this Chamber. However, it has improved with the recent addition of political members and, I hope, will now be more sensitive.

Notwithstanding what the Minister has said, I hope that the chief counting officer and the chair of the Electoral Commission will have heard this debate loudly and clearly and will recognise the pressure to have the count overnight, not only from this House but also from all political parties in Scotland. Although I accept that, as the Minister said, it may not be best to have that written into the Bill, I hope that it will be taken into account—otherwise the chief counting officer will be even more unpopular in Scotland than Mr Alex Salmond. I beg leave to withdraw the amendment.

Amendment 5F withdrawn.

Amendments 6 to 7A not moved.

Amendment 7B

Moved by

[Lord Rooker]

7B: Clause 4, page 3, line 31, at end insert—
“(8A) Where a day is appointed by an order under section 1(2B)—
(a) if that day is the same as the date of a poll mentioned in subsection (1), the Minister may by order make provision disapplying that subsection or any of paragraphs (a) to (c) of it;(b) if that day is the same as the date of a poll mentioned in subsection (2) or (3), the Minister may by order make provision disapplying the subsection in question;(c) if that day is the same as the date of a poll mentioned in subsection (4), the Minister may by order make provision disapplying that subsection or either of paragraphs (b) and (c) of it.(8B) Where a day is appointed by an order under subsection 1(2B), and that day is the same as the date of a poll not mentioned in subsections (1) to (4), the Minister may by order—
(a) provide that the polls are to be taken together, and(b) make provision for and in connection with the combination of the poll.(8C) An order containing provision made under subsection (8A) or (8B)—
(a) may make supplemental or consequential provision, including provision modifying or amending this Act or another enactment (and, in particular, provision modifying or amending this Act as regards the meaning of “voting area” or “counting officer”);(b) may not be made unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.”

Amendment 7B agreed.

Consideration on Report adjourned until not before 8.35 pm.

European Council and North Africa

Monday 7th February 2011 Lords Chamber

Statement

19:35

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister. The Statement is as follows.

“With permission, Mr Speaker, I would like to make a Statement on last week’s European Council and comment on today’s review by the Cabinet Secretary of the papers relating to the release of Abdelbaset al-Megrahi, which was published at 1 pm today.

Taking the Council first, three issues were discussed: first, the continuing efforts to tackle instability in the eurozone; secondly, the role of energy and innovation in delivering a comprehensive growth strategy for the European Union; and, thirdly, the situation in Egypt.

Let me take each in turn. First, eurozone members are quite rightly looking at ways to resolve some of the underlying problems of the euro crisis, including by strengthening economic co-ordination arrangements. My job is to protect and promote Britain’s interests. As I have said before, it is in our interests that the eurozone sorts out its problems. A strong and stable eurozone is in Britain’s interests.

But in my view there are three absolute essentials for Britain. First, we should keep out of the euro. Secondly, we must make sure that we are not dragged into a new mechanism for bailing out the eurozone in future—and, as I described from the last Council, we have achieved that. Thirdly, and most complex, while we should not prevent eurozone countries from coming together to deal with the problems that they face, we must make sure that this does not compromise the single market, which is an important British success story in Europe and remains one of our key interests.

There is a danger here, which is that in developing stronger co-ordination eurozone countries start affecting things that are more properly part of the single market of all EU members. I made sure that this point was recognised at the Council and secured specific assurances to protect the single market. As the statement by eurozone countries, which we all debated, makes clear:

‘Building on the new economic governance framework, Heads of State or government will take further steps to achieve a new quality of economic policy coordination in the euro area to improve competitiveness, thereby leading to a higher degree of convergence, without undermining the single market’.

The next issue is energy policy. Extending the single market to energy has been a long-held objective of recent Governments of all parties. Achieving this could add up to 0.8 per cent of European GDP and mean another 5 million jobs across Europe by 2020. Also, if we make a 20 per cent improvement on energy efficiency by 2020, that could significantly reduce the pressure on household bills. A single market in energy is good for jobs, competition and energy security, so practical co-operation with the rest of Europe on this is firmly in our national interest.

The Council agreed that,

‘the EU needs a fully functioning, interconnected and integrated internal energy market’,

and that,

‘the internal market in energy should be completed by 2014’.

We also agreed that,

‘major efforts are needed to modernise and expand Europe’s energy infrastructure and to interconnect networks across borders’.

This is something that Britain strongly supports, not least as we plan for the North Sea offshore supergrid.

The conclusions on innovation are also completely in line with what Britain supports and has been trying to achieve. Innovation and energy policy are part of the growth strategy being developed in Europe and we will publish our own proposals before the next European Council, which will specifically be discussing that subject.

Next, let me turn to Egypt. I was determined that the Council would not produce one of its heavily caveated and unclear statements and I believe that the declaration has a number of very positive aspects. The first is that the Egyptian authorities should,

‘meet the aspirations of the Egyptian people with political reform not repression’.

Secondly, it is clear that transition is needed to broad-based democratic government. The statement is emphatic that,

‘this transition should start now’.

The European Council was clear that this has to involve the building blocks of free and open societies and democratic institutions, such as freedom of assembly, the rule of law, freedom of speech and free and fair elections.

There is a strong case—and the statement reflects this—that the EU needs to look hard at its role in the region. We have spent billions of taxpayers’ money in Egypt and neighbouring countries, with carefully crafted association agreements and action plans offering funds, access to our markets and other assistance in exchange for progress on the rule of law, democracy and human rights, but in Egypt there has been little or no progress on torture, the judiciary, democracy or ending a 30 year- old state of emergency. It is time for Europe to take a more hard-headed approach, where the conditions on which we give money are real and insisted on. I reaffirmed this message in a call with Vice-President Suleiman this afternoon and I urged him to take bold and credible steps to show that the transition that they are talking about is irreversible, urgent and real.

Finally, let me say a word about the release of the Lockerbie bomber, Abdelbaset al-Megrahi, and the report that has been released today by the Cabinet Secretary. I have not altered my view, which I expressed at the time, that releasing Mr Megrahi was a very bad decision. He was convicted of the biggest mass murder in British history and in my view he should have died in jail. It was a bad decision and the previous Government should have condemned it rather than going along with it.

I commissioned this report during my visit to Washington last July. At the time, there was renewed controversy around the decision, with a congressional inquiry into it and calls for a UK inquiry, and concerns were being put forward, quite forcefully, in America that the whole release may have come about as a result of pressure by BP on the British Government to pressure the Scottish Government to make that happen.

I do not believe that that is true and this report shows that it is not true. It was a decision taken by the Scottish Government—the wrong decision, but their decision nevertheless. But in view of the continuing speculation in the UK and the US, I thought it right that all the British government paperwork should be re-examined to assess whether more should be published and I asked the Cabinet Secretary to do just that.

That is what Sir Gus O’Donnell has now done. In order to address the concerns that were being expressed, he was asked to look at three specific areas: first, whether there was any new evidence that the British Government directly or indirectly pressured or lobbied the Scottish Government for the release of Megrahi; secondly, whether there was pressure placed on the Scottish Government by BP for the release of Mr Megrahi; and, thirdly, whether the Libyans were told that there were linkages between BP’s investment and the release of Megrahi either under the prisoner transfer agreement or on compassionate grounds.

The report and all the paperwork, running to 140 pages, have been placed in the Library of the House. All decisions on the declassification and publication of papers belonging to the previous Administration were of course taken independently by the Cabinet Secretary. Under the convention covering papers of a previous Administration, he has consulted as appropriate former Ministers and the former Prime Minister. Sir Gus was assisted by the former Information Commissioner, Richard Thomas, to provide an independent validation. He saw all paperwork, redacted and unredacted. His job was to advise the Cabinet Secretary whether his report and the documents now being published are consistent with all the materials that were reviewed. He was also tasked with determining whether this is a fair and accurate account of events. This he has done. He is content on both counts.

The Cabinet Secretary concludes that it is clear from the paperwork that the former Government were clear that any decision on Mr Megrahi’s release or transfer under the prisoner transfer agreement was one for the Scottish Government alone to take. He finds that none of the materials that he reviewed contradicts anything contained in the former Foreign Secretary’s Statement to the House in October 2009. He makes the same finding with respect to the current Foreign Secretary’s letter to Senator Kerry in July last year and with regard to statements made by the former Prime Minister on this matter. He notes that it is evident that the Libyans made explicit links between progress on UK commercial interests in Libya and removal of any clause on the prisoner transfer agreement whose effect would be to exclude Megrahi from it. He notes that, after Megrahi had been diagnosed with terminal cancer in September 2008, the then Government’s policy was based on an assessment that UK interests would be damaged if Megrahi were to die in a UK jail.

The Cabinet Secretary finds—this is a key point—that,

‘policy was therefore developed that the Government should do all it could’,

while respecting devolved competences,

‘to facilitate an appeal by the Libyans to the Scottish Government for Megrahi’s transfer under the PTA or release on compassionate grounds’,

as the best outcome for managing the risks faced by the UK.

One of the Foreign Office papers released today makes it plain that,

‘facilitating direct contact between the Libyans and the Scottish Executive is a key part of our game plan on Megrahi’.

Another Foreign Office paper from January 2009 states:

‘We now need to go further and work actively but discreetly to ensure that Megrahi is transferred back to Libya under the PTA or failing that released on compassionate grounds’.

Frankly, this tells us something that was not made clear at the time. It goes further than the account that the former Prime Minister and the former Foreign Secretary gave. We were not told about facilitating an appeal, about facilitating contact or game plans. Indeed the Cabinet Secretary’s report states:

‘Policy was therefore progressively developed that HMG should do all it could, whilst respecting devolved competences, to facilitate an appeal by the Libyans to the Scottish Government for Mr Megrahi’s transfer under the PTA or release on compassionate grounds as the best outcome for managing the risks faced by the UK’.

Honourable Members will be able to study the paperwork and consider these issues for themselves. However, I do not believe that these papers justify calls for a new inquiry. What they provide is further evidence that this was a flawed decision by the Scottish Executive—which we knew already—and they point to some broader lessons from this affair. It is clear from these papers that the previous Government badly underestimated and in fact failed seriously even to consider, except as an issue to be managed, the reaction in both Britain and the United States to the release of Mr Megrahi—above all among many of the families who lost loved ones.

The key point to me that emerges from reading the paperwork is that consideration was given to the most basic question of all: was it really right for the British Government to ‘facilitate’ an appeal by the Libyans to the Scottish Government in the case of an individual who was convicted of murdering 270 people, including 43 British citizens and 190 Americans, and 19 other nationalities? That is, for me, the biggest lesson of this entire affair.

For my part, I repeat: I believe that it was profoundly wrong. The fact that 18 months later the Lockerbie bomber is today living at liberty in Tripoli only serves to underline that.

Mr Speaker, I commend this Statement to the House”.

My Lords, that concludes the Statement.

19:49

[Baroness Symons of Vernham Dean]

My Lords, I thank the Minister for repeating the Statement given in another place earlier today by the Prime Minister.

I start with the conclusions of the European Council on Egypt. The Egyptian people continue to show enormous courage and great steadfastness in their desire for fundamental and lasting change in their country. We support the call for a clear and transparent path towards transition as soon as possible. I also join the Government and leaders of the European Union in condemning any attacks on peaceful demonstrators and urge the authorities to allow the people of Egypt to continue to exercise their right to free and peaceful protest in their own country.

We also welcome the European Council’s condemnation of attempts to restrict the free flow of information through the blocking of e-mail and the internet, as well as the intimidation of those who are endeavouring to defend human rights and of journalists. I am sure that many of us regret the blocking of the broadcasting by Al-Jazeera and the blocking of its ability to broadcast what was going on. Many of us often disagree with Al-Jazeera; it has none the less played a significant role in opening up freedom of the press in the Middle East.

The process of transition is undoubtedly under way in Egypt. It must be guided first and foremost by the people of Egypt. We in Britain must also be prepared to stand up and speak out against any techniques that are deployed in that country which amount to the repression that has been used in recent months.

Can the Minister update the House on the Government’s views about the talks involving Vice-President Omar Suleiman and the opposition parties, and whether the Government believe that these may lay the ground for a transition? We knew at the weekend —I am sure that the Minister, as did I and many others, received reports coming directly out of Egypt—that many in the opposition parties were willing to talk, but that the Muslim Brotherhood expressed a great reticence to do so, at least initially; they have been engaged latterly. Omar Suleiman has a good reputation, not just in Egypt but throughout the region, and with many of his interlocutors in this country and, indeed, in the United States. I hope that the Minister will be able to give us some reassurance that he will be able to lead these discussions in a way that leads towards a fruitful conclusion.

Can the Minister also offer us the latest thinking of the European Union and its allies on the difficult issue that may now pertain around the role of President Mubarak during this transition? I recognise that this is a very sensitive point, but we all know that opinion is enormously divided in Egypt over what should now happen to President Mubarak. This is not a straightforward point that the western powers can dictate. There is an enormously difficult point about reaching a settlement which will run in a way that will have some real resonance and lasting ability to command the central ground in Egypt.

On the nature of the transition, do the Government agree that any transition has to include not just the provision of free and fair elections, but also the building up of democratic structures? I am thinking in particular of an independent judiciary, diverse political parties, and a free press. Democracy is not just about elections—although of course elections are an essential prerequisite —but it is important that the structures of the rule of law and respect for human rights are also part of the mix of what we consider to be a democratic state.

Can the Minister also update the House on the steps the Government have taken to ensure the safety of British nationals in Egypt during the current turbulence? Is the Minister satisfied that all British nationals wishing to leave Egypt have been contacted and have been facilitated in this respect? Can I also, on behalf of the Labour Benches, thank all our staff in the embassy in Cairo—our enormously able, outstanding ambassador, Dominic Asquith, and the diplomatic team that he leads?

Perhaps I may turn to the other matters discussed in the European Council last Friday. On energy policy, we welcome the Council’s conclusions on the internal marketing of gas, electricity and the North Sea grid. We also welcome the Council’s plans for the improvement of Europe’s energy infrastructure, and the routes for energy across the globe, which in many ways were so disrupted during the dispute between Russia and Ukraine in 2008. This is a very important matter. We have touched upon it in recent debates in your Lordships’ House and I am sure that the Minister will wish to expand on his remarks on that.

May I also ask the Minister two questions about how our policy at home relates to the discussions in Europe? First, we note the Council’s conclusions on the importance of renewable energy. Will the Minister update the House on the implementation of the renewable heat incentive, which is a crucial part of Britain’s energy strategy? The incentive was due to come into force in April this year, but it has now been delayed. Is the Minister now in a position to tell us when it will be introduced, and, if he is not, perhaps he will be kind enough to write to me about that afterwards?

Secondly, on the financing of energy investment, which the Council rightly flags up as an important challenge, can I ask the Minister to update the House on the green investment bank? The Government committed themselves to build on our plans when we were in government. Can the Minister tell us whether the Government now plan it to be a fully fledged bank, as many have argued?

On the wider economy, I welcome the Council’s conclusions, but I note that the conclusions on the summit are that,

“the overall economic outlook is improving”.

I fear that for many families and young people in the United Kingdom, it really does not feel quite like that at the moment. Will the Minister tell the House whether the Prime Minister shared with the members of the Council the recent experience of the United Kingdom and whether he went so far as to warn his colleagues that cutting budget deficits too far and too fast can have damaging effects on growth and on employment? It is a serious point—it is the point of real difference between us in this House.

I turn to end with the case of Mr Megrahi. The Lockerbie bombing, as we all acknowledge, was a terrible atrocity. It destroyed hundreds of innocent lives and it scarred the lives of many families. When I was first a Minister, I remember so vividly meeting with the Lockerbie families and discussing with them what could be done to try to bring those responsible to justice. It was a humbling experience. Those families were not seeking revenge. They were seeking justice. Many of them had a breadth of vision over what they wanted to happen, which did them enormous credit and which I have always remembered.

The Cabinet Secretary, Sir Gus O’Donnell, has researched and written a serious and thorough report into the papers relating to Mr Megrahi’s release. There are three significant conclusions to Sir Gus’s report which pertain to Mr Megrahi’s case. First, the United Kingdom Government were worried about the impact on British interests of Mr Megrahi dying in jail, precisely as the former Foreign Secretary said in his Statement to the other place on 12 October 2009. Secondly, the report makes it clear that there is no evidence that,

“UK interests played a part in Mr Megrahi’s release by the Scottish Government on compassionate grounds”.

That is an enormously important point and one which I make no apology for stressing in making my reply to the Statement. Indeed, Sir Gus concludes that the former Government went to great efforts not to communicate to the Scottish Government their view. I think that that point might have been stressed a little more in the Prime Minister’s Statement. Thirdly, Mr Megrahi’s release on compassionate grounds was a decision that Scottish Ministers alone could and did make.

Those are the fundamental points, not perhaps the extraneous matters of which the Prime Minister spoke so eloquently in another place. That is because the message of today’s report is that Mr Megrahi’s release was not influenced by the then UK Government. It is a crucial point for us in this country, and I hope that when the Minister replies to the points I am making, he will acknowledge that as a central fact.

On the question of what Parliament was told, can the Minister confirm that the Cabinet Secretary concludes that,

“none of the materials that I have reviewed contradicts anything in the then Foreign Secretary’s Statement … or statements made by the former Prime Minister on this matter”?

The Statement talks about the broader issues, but I am bound to say that on this it misses the central point, the one that matters above everything else, and that is that the bombing of Pan Am Flight 103 must live in the memory of this country and the United States as a dreadful atrocity. It was the duty of the Labour Government and now it is the duty of the coalition Government to take every step they can to ensure that this never happens again. That is the central point we should concentrate upon.

20:01

[Lord Howell of Guildford]

My Lords, I am grateful to the noble Baroness and I will try to answer as many of her questions as I can, given the obvious time constraints. What she has to say is highly relevant and I hope that I can cover her remarks in detail. First, I am grateful for her support for the broad approach both of Her Majesty’s Government and of what was agreed at the European Council—that an orderly transition is the right posture and that we insist on the right of the freedom to protest. We are concerned, as we would be in any political evolution in any society—this is a global age—about anything which restricts e-mail, blocks the media or undermines the position of journalists to go freely about their tasks in a way consistent with liberty and freedom. We are at one and there is nothing to debate in that because clearly it is the right way forward.

On the new talks, the noble Baroness will appreciate that things are moving all the time and that the process, chaired by Omar Suleiman and including the leaders of the Muslim Brotherhood, has only just begun. She asked whether they will lay the ground for progress. I hope so, and we think that this is the right way forward, but we are watching from outside and obviously these matters must be dominated and controlled by the people of Egypt themselves as they work out their new political destiny.

I would have to give the noble Baroness the same answer to her question about the position of President Mubarak. This is a matter for the people of Egypt to sort out in ways that we hope will be consistent with the core principles that she has enunciated and I have agreed with. However, it must be for the Egyptian people to decide. There is quite a broad point to be made about the danger in the west, and perhaps with our transatlantic allies as well, of assuming that western values and templates are going to shape the pattern of events in Egypt and elsewhere in the region. That is not necessarily so. Those ideas might have been relevant during the 20th century, but in the 21st century we are dealing with a new landscape where there is both a dispersal and a new distribution in the transfer of power and influence to other forces, not least the gigantic forces of the internet, the mobile telephone, mass television and instant communications enabling protests to be e-enabled and rapidly organised. This is a different scene and it seems that not every policy maker in the west has fully understood that.

She asked whether we can help with the creation of democratic structures. We do help through our programmes and those of our fellow EU members, both through the UN and directly. They assist with helping democratic patterns and attitudes to grow, but there is always a problem. Just as someone said that you cannot create a tree because it must grow, so you cannot create and build a democracy out of nothing. As the noble Baroness very acutely observed, it is about a lot more than elections, voting and ballot boxes, and it is indeed more than about concerns for human rights and the rule of law. It is about the idea of those who have power or authority using them with restraint. In the language of Edmund Burke, if I may quote him given my own party antecedents, I think he said that there is a policeman, or a policewoman I should say, in each one of us. If there is that inner restraint within individuals, there will be democracy. If that restraint is not there, democracy can become warped and produce quite the opposite result, as has certainly been the case many times in the tragic history of the 20th century.

The noble Baroness went on to ask about travel advice, so let me give her the latest information as I understand it from my brief. We are currently recommending that British nationals in Cairo, Alexandria and Suez leave by commercial means if it is safe to do so. We advise against non-essential travel to Luxor. We are keeping a close eye on the Sharm el-Sheikh situation, where the majority of British nationals are, and we continue to judge that the situation in the Red Sea resorts remains calm and peaceful. Further, as I was able to tell your Lordships the other day, we have very substantially reinforced our embassy team on the ground, and since 29 January we have helped more than 2,000 British nationals to leave Egypt. We also have a hotline for distressed nationals to call for advice and we have chartered two planes to provide additional capacity. That is the latest travel advice, and I would be happy to try to elaborate on it. However, it seems to be fairly straightforward at the moment.

I turn now to the other questions raised by the noble Baroness about Europe. She asked whether we support the need for energy infrastructure, and I can say that we most certainly do. It is fundamental that if there is going to be a competitive energy market in Europe, it must be possible for energy in the form of piped gas and interconnected electricity to move east, west, north and south in the continental European system, to part of which we are actually attached. That must be possible without regulations and controls at every border and it requires the pipeline and electricity cable infrastructure to do it. However, it is not yet in place, so we have seen the extraordinary pattern of gas shortages in one part of Europe while another part has ample supplies. It means that reliance on monopoly suppliers further east—namely, from our Russian friends—is unnecessarily great. None of that points to the kind of balance we need, so we say yes to the infrastructure.

As for the renewable energy commitments, I can give the noble Baroness some, but not all, of the information she asked for. The green investment bank allocation of £1 billion from departmental budgets and the significant asset sales are proceeding. We are pushing for the EU to demonstrate leadership in tackling international climate change, including by supporting an increase in the EU emissions reduction target from 20 per cent to 30 per cent by 2012. As we know, that has not yet been accepted by all European countries or industries, but we believe that that is the right way forward. I have a lot of other details in my brief that were covered by the Prime Minister and his colleagues at the European Council, which I shall gladly discuss with the noble Baroness at any time she wishes.

Her final remarks were on the eternal economic debate, and the pace at which one seeks to cut deficits. All I would say is that the overwhelming view of the rest of the European Council was that of support for the British strategy. The point was made again and again by a number of leading authorities throughout Europe that this is the right way forward, and the point was also made that it is the confidence of the international markets and the necessary confidence in our international credit which are the absolutely vital aims. Once those are weakened, the real job destroyer would click in. That must be the prime aim and any deviation from that would be quite disastrous, in terms of jobs and human suffering in this country and weakness in our economic recovery, as my right honourable friend the Chancellor has also made vividly clear on many occasions.

Finally, on the difficult issue of Mr Megrahi and the Cabinet Secretary’s report, the noble Baroness asked me to acknowledge certain points which I gladly do. I reiterate that the report makes absolutely clear that there was no conspiracy between BP, the British Government and Scottish Government, as some people allege. That is made absolutely clear. There is no contradiction in the report with anything said by the former Foreign Secretary or by the former Prime Minister. That is also clear.

Nevertheless, the comments remain, to which my right honourable friend the Prime Minister called attention in the other place, that the policy was being developed to,

“facilitate an appeal by the Libyans to the Scottish government for Mr Megrahi's transfer under the [prisoner transfer agreement] or for release on compassionate grounds”.

There was the paper from the Foreign and Commonwealth Office saying that,

“we now need to go further and work actively but discreetly to ensure that Megrahi is transferred back to Libya under the PTA or failing that released on compassionate grounds”.

My right honourable friend said that,

“this tells us something that was not made clear at the time”.

I think it is right for those who were involved to react and make clear their views as they wish. It seems that we now have to look back at what is for many people the most tragic and terrible situation with greatest sympathy but also look forward to better and wiser times in the hope that nothing so terrible, so appalling, will ever happen again. I hope that meets most of the noble Baroness’s questions.

20:12

[Lord Hylton]

My Lords, I apologise to the Minister for being a fraction late for his opening words. However, I read the whole of the Statement earlier today. I welcome the general thrust of the Statement as regards Egypt because it is a good deal firmer than anything we have previously had. I put to the noble Lord three brief questions.

First, what information have the Government received, if any, concerning the safety of Mr Wael Ghonim, a Google executive and also a leading protester? He is thought to have been arrested in Cairo. Are the Government making representations about extra-legal detentions, both of Egyptians and foreign journalists, together with allegations concerning disappearances of people in Egypt?

Secondly, would the Government favour a three-man presidential council, which would only include one military person, to supervise the transition? Finally, have the Government noted a possible serious conflict of interest over the United States’ special envoy and his business interests?

[Lord Howell of Guildford]

My Lords, I am grateful to the noble Lord. I will answer the first point in general terms. Of course we are concerned about all extra-legal detentions and even more about reports, which existed long before this revolutionary situation began, of torture and other illegal practices. Of course, we make constant representations through our posts on that. As to the specific individual to whom he referred, I will write to him about the very latest information we have on that.

Secondly, on the three-man presidential council, that is taking us deep into the kind of arrangements that it is up to the Egyptians to develop for themselves. As a student of history, the talks of three-man presidential councils coming out of revolutions has a slight tinge of 19 Brumaire 1798 and the first three consuls—of which Napoleon Bonaparte was one. We all know where that went. I think it is much better for us not to advise the Egyptians on these matters.

I shall have to ask the noble Lord to repeat the third point as I did not quite get it down.

[Lord Hylton]

It concerns a possible serious conflict of interest arising from the business interests of the United States’ special envoy to President Mubarak.

[Lord Howell of Guildford]

I imagine the noble Lord is talking about Mr Frank Wisner. In the interests of diplomacy, I should be careful to avoid any specific notes except to say, as my right honourable friend the Prime Minister did in another place, that the special envoy’s views on the internal matters of Egypt and the position of the President seemed to deviate slightly from those of the American Secretary of State. I think I can say no more than that on that particular issue.

[Lord Steel of Aikwood]

My Lords, I am sure my noble friend will understand that the trauma and horror of the downing of the Pan Am flight was felt particularly strongly across the south of Scotland, where we all felt sympathy with the people in Lockerbie. For that reason, I will confine my questions to that issue.

He will recall, as he said a moment ago, that the previous Government told the public and the House of Commons that this was entirely a matter for the Scottish Government and that they were not putting pressure on them. That is true. Would he agree that Sir Gus O’Donnell has shown, as he quoted a moment ago, that policy was developed whereby the UK Government were doing everything short of telling the Scottish Government what they had to do to secure Mr Megrahi’s release and that we have to conclude that the Government were telling the truth but not the whole truth?

The other part, not mentioned in the prime ministerial Statement which the Minister repeated just now, is that Sir Gus O’Donnell’s report also tells us that the Scottish Government were raising other policy issues with the UK Government at the same time as dealing with that difficult and grubby issue. That had not come out before, either. Sir Gus’s report appears to cast some doubt on not the veracity—because lies were not told—but the straightforwardness of both the UK Government and Scottish Government at the time. In the words of the final sentence of a Scotsman leader this morning, “Something is being concealed”.

[Lord Howell of Guildford]

I do not want to move further than the words expressed by Sir Gus O’Donnell and the conclusions drawn by my right honourable friend the Prime Minister. My right honourable friend said that the report indicates that while there is—to repeat the words of my noble friend—no doubt at all about the veracity of the statements made by senior members of the previous Government, it is clear that there was more to tell and that some pieces of the total picture were lacking. That is where my right honourable friend and the Government stand on this matter. It must be for all those who were involved at the time to establish what they believed to be the position. Indeed, some of these remarks were made with force and feeling by the people who were directly concerned when the matter was discussed in the other place earlier this afternoon. I am not going to go further than that.

[Lord Anderson of Swansea]

My Lords, the Statement sets out a more hard-line approach in respect of assistance to Egypt. Was this co-ordinated in any way with the US? I am recalling that Condoleezza Rice said in Cairo in 2005 that the US would no longer give priority to stability over democracy. Is the implication that, had there not been a revolution in Egypt, we would still have continued to spend billions of taxpayers’ money in Egypt and neighbouring countries with no reciprocity in terms of progress on torture, the judiciary, democracy and so on? Secondly, it is of note that the Prime Minister spoke to Vice-President Suleiman. It is the Vice-President who is co-ordinating the discussions with a number of the opposition parties. Is there any implication that, as some are suggesting, the President himself is fading more into the background, leaving the lead to the Vice-President?

[Lord Howell of Guildford]

On the question of co-ordination with the United States, my honourable and right honourable friends, both in the Foreign and Commonwealth Office and, obviously, in the Government as a whole, are in constant contact at all levels with United States officials. It would be naive, however, to stand at the Dispatch Box and pretend that these huge upheavals and events do not present to policy-makers and experts, no doubt in Washington and other capitals, something of a dilemma.

The pattern of the past produced a sort of stability, but it was the kind of stability that could be upset at every moment, as it was. The combustible materials were there; it was a question of when someone threw in a match. That is what happened in Cairo. That raises for the most balanced and clear-thinking people a dilemma as to whether the new pattern is going to improve on the old pattern or, indeed, where the new pattern will take us. We all know the adage about revolutions devouring their own children. They can turn into an opportunity to be seized for the good, as my right honourable friend the Foreign Secretary was rightly saying the other morning, or they can slide away in an unpredictable series of sequences, like the French Revolution, to which I referred earlier.

It is hard to answer the noble Lord, Lord Anderson, about how we and the Americans can be totally accurate in our predictions and the certainty of where to go. It is very difficult. We are monitoring and watching the situation very carefully, as are the Americans. We are reinforcing our concern in this nation and the American concern in their nation for liberty and freedom and the basic principles of civilised existence. We are hoping that these patterns will be reflected in whatever emerges in Egypt and, indeed, in other turbulent political scenes in the region. There is no guarantee or certainty, however, and this must be realistically and reasonably understood.

As for the pattern of power deployment inside Egypt and whether Omar Suleiman is now taking the reins, I do not think that I can comment beyond what we have all read in the newspapers. Mr Mubarak clearly wants to stay a few more months. He has appointed Omar Suleiman to take the lead in these negotiations. It is right that our leaders should contact him to understand as much as we can of how he sees the situation. This must be a dialogue that will, I hope, develop further in the future as we see what path these discussions take and what part the Muslim Brotherhood leadership and other political forces in Egypt play in them. This is really, for us, a matter to hope about rather than a matter in any way to interfere with. This is for Egypt to decide.

[Lord Ryder of Wensum]

My Lords, I refer to the energy section of the Statement. I hesitate to ask my noble friend this question in light of the fact that we have shared views on energy policy over many decades. The Prime Minister’s Statement sets out that 5 million extra jobs will be created over the next nine years, by 2020, by virtue of this new energy policy. On what basis and by what calculation does the Prime Minister reach this figure, bearing in mind that even the communiqué issued by the European Council did not state how many extra jobs would be created? Can my noble friend also explain to me on what basis the Prime Minister has worked out that there will be a reduction in the pressure on household bills by virtue of the policy that he has set out this afternoon, bearing in mind that the European Council did not discuss the financial dimensions of this policy? Indeed, the European Council last weekend was not permitted to discuss the financial dimensions of this policy. Perhaps I can help him. There is a document, which was not tabled at the Council but is being circulated within the Commission, that shows that the cost of this policy over the next years is €1 trillion. I ask my noble friend: who is to pay the €1 trillion for the energy policy that the Prime Minister has set out today claiming that 5 million extra jobs will be created and that household bills for energy will go down?

[Lord Howell of Guildford]

I am grateful to my noble friend for a series of near-impossible questions. These estimates are inevitably estimates. They are based on what one hopes is an unfolding sequence of policy, which leads first—and one must recognise this—to the incentives for fossil-fuel energies to be replaced by more efficient use of those same energies so that eventually higher bills become lower bills, and, secondly, to the replacement of fossil fuels in a number of areas by non-fossil alternatives and renewables. At this moment, my noble friend says, “Ah, but that means all renewables are far more expensive than fossils fuels”. At this moment, pound for pound and kilowatt hour for kilowatt hour, he may be right, but how is this going to evolve in future? The world is concerned about the high-carbon situation now and its effect on climate. The world is aiming for a low-carbon, greener world, and this Government are determined to move along that path to greener, cleaner energy and greater energy efficiency. That will lead in due course not to higher bills but to lower bills. I emphasise “in due course” because in the mean time, as he probably knows from receiving his monthly or quarterly energy bills, all our energy bills are looking a bit more expensive. We have to look through the present situation to a longer term where we can see new products and new patterns developing to support a low-carbon, secure, affordable energy pattern that would benefit not merely Europe and our own country but also the developing world, which, of course, has an enormous thirst for abundant but cheap and affordable energy.

[Lord Kilclooney]

My Lords, because of the shortage of time, I shall ask two brief questions. One relates to corporation tax. It is widely reported in both the United Kingdom press and the southern Irish press today that both President Sarkozy and Chancellor Merkel have recommended a standard rate of corporation tax. Was that proposal to apply to eurozone countries only or to all member nations of the European Union? Was the principle of a common corporation tax agreed or opposed by the United Kingdom?

My second question relates to Egypt. If you watch Al-Jazeera television or Press TV, you will see increasingly that the European Union and the United States are coming out of this problem very badly indeed. For example, when you see that the United States provided tear gas canisters to the Egyptian police to fire on the demonstrators, that is very bad publicity. In fact, the United States seems to be in total disarray about what to do about Egypt, and the European Union is not very clear either, even in the Statement repeated this afternoon. We now know that both Germany and France have stopped all further sale of firearms to Egypt. Has the United Kingdom stopped the sale of firearms and, if not, why not?

[Lord Howell of Guildford]

I believe that we are no longer selling firearms or weapons of any kind to Egypt, but I would certainly have to double and treble check that in every aspect, because—who knows?—there may be some channels where that is not absolutely secure.

On the second part of the noble Lord’s question, I think that his words are a shade impetuous, if I may say so. We are watching a very rapidly changing pattern—a wind of change, as some have said, blowing through the whole of this area. None of us knows what will happen. Anyone who claimed that they knew exactly what would happen next or what pattern would be involved inside Egypt, Tunis and other areas, including Yemen, would be putting forward a false prospectus and making claims about which they could not be certain. There are doubts and debates in Washington policy circles; we can see that—it is perfectly obvious, as I have said to the noble Lord, Lord Anderson. In the European Union countries there are the same concerns. We want to see a balanced democratic pattern emerge in these countries; we want to see prosperity, stability and an orderly transition. Who can lay down exactly what the path should be—which leaders should stay in authority, which should hold or surrender power or how it should be done? We pray and hope that it is done with minimum bloodshed and maximum concern for individual freedom and democracy and all the things that we value.

In the noble Lord’s first question, I think that he is referring to the much commented-on Franco-German competitiveness pact, which does not seem to be very widely supported by other EU members. Certainly, the idea of a single pattern of corporation tax or some of the other suggestions, such as harmonisation of detailed aspects of labour markets and wages, did not go down at all well at the European Council meeting.

[Lord Bew]

I thank the Minister for reading out the Statement. On the Libyan aspect of the Statement, I declare an interest as having been a member of the parliamentary delegation for Libyan and Northern Ireland reconciliation, led by the noble Lord, Lord Brennan, who is in his place. One thing that emerges very clearly from the Cabinet Office report today is that the Libyan Ministers to whom we spoke knew more about recent UK policy on this matter than those of us who were on that delegation. As long as the noble Lord is a Minister in the Foreign Office, will he ensure that those who go as part of future parliamentary delegations to Libya know the full background of recent UK policy to the country that we are dealing with? Otherwise, one is at a disadvantage.

One interesting thing raised by the Cabinet Secretary at the beginning of the document is the issue about anticipating American reaction. This is quite a remarkable thing; after all, it was not hard to calculate that the United States’ reaction to the release of Mr Megrahi would be hostile. There is an argument, as the Prime Minister explicitly stated, that the last Government got it wrong, but at the heart of the report we read that our embassy in Washington said that there would be a hostile US reaction. In the same part of the report, there is also a suggestion that perhaps the State Department was not making its position fully clear. Can the Minister throw some light on an absolutely remarkable piece of British history—a failure to calculate something that was so predictable, which was the United States’ reaction to this release? The evidence in the report seems conflicted to some degree. It is such a striking thing that I wonder whether the Minister has any comment on it.

[Lord Howell of Guildford]

To be brief, because time is out, of course I will ensure that my colleagues in the Foreign and Commonwealth Office make every effort, as they always do, to provide the best possible up-to-date briefing. Sometimes matters are moving so fast that it is hard to be absolutely up to date and sometimes when one is on a delegation in another country—and I have led many in the past, as chairman of the Foreign Affairs Committee in another place—one finds the local view and perspective seemingly different, even with a conflict of facts. We will do our best.

As to the US reaction to the release of Mr Megrahi, I think that it was generally realised that this would be greeted with great concern by the United States; everyone was fully aware of that. Many people thought, probably not just as a result of that, but for other reasons, too, that it was wrong to release Megrahi—those many included my right honourable friend the Prime Minister—but we have our own views in this country. I am not saying that in this case the decision was right—I think that it was wrong—but we are entitled to develop our own world perspective and our own views on how the new landscape is changing, as well as to remain very close to our allies and friends in Washington while being in a relationship that, to quote my right honourable friend the Foreign Secretary, is “solid but not slavish”.

Parliamentary Voting System and Constituencies Bill

Monday 7th February 2011 Lords Chamber

Report (1st Day) (Continued)

20:36

Clause 5 : Press comment etc not subject to spending controls

Amendment 8

Moved by

[Lord Falconer of Thoroton]

8: Clause 5, page 4, line 7, after “a” insert “referendum campaign”

[Lord Falconer of Thoroton]

My Lords, Amendments 8 and 9 are in my name and the name of my noble friend Lord Bach. Clause 5 refers to exceptions to the spending rules in the Political Parties, Elections and Referendums Act 2000 for the proposed referendum on the voting system for the House of Commons. Amendment 8, the first in this group, seeks to emphasise that the broadcasts that are exempted are referendum campaign broadcasts. We contest that referendum-related materials and party election materials must be differentiated. Our second amendment, Amendment 9, picks up the same point. If political parties are allowed to use their election broadcasts to argue the merits of the referendum, that could lead to claims that the argument has been weighted more on one side than the other. Once you can use an election broadcast to promote views on one side or other of the AV or non-AV debate, the playing field is no longer equal. Party election broadcasts, which are an opportunity for all parties, should be about the elections for individual office holders, not the referendum.

The Political Parties, Elections and Referendums Act 2000 and the Bill seek to create a level playing field where expenditure should not be the determinant of who wins. If that can be got around, because of the combination aspect, it leaves the possibility of the expenditure being distorted. Everyone agrees that the referendum result should be determined on its merits, not on who can spend the most money. The changes that are recommended by our amendments are important. It should be in the interest of all parties and none that clarity over the administration of press coverage and expenses during the election period is maximised.

My noble friend Lord Campbell-Savours, who I am happy to see in his place, said, when this issue was debated in Committee that,

“it is vital that we have a level playing field wherever possible during the referendum campaign”.—[Official Report, 15/12/10; col. 617.]

I trust that your Lordships’ House would agree.

In Committee, the Minister, the noble Lord, Lord McNally, saw the importance of the issue. He said:

“We recognise that there is an issue to be discussed”.

I can inform the House that there have been no such discussions. We have not been approached by the Minister or by his officials, and I have seen no draft amendment. The noble Lord, Lord McNally, continued:

“There would have to be discussions without preconditions on either side. If the noble and learned Lord wishes to press the amendment, I shall resist—and that would be a mistake for both of us”.—[Official Report, 15/12/10; col. 621-22.]

I agree.

We withdrew our amendment in Committee, relying on the good faith of the Minister, but there has been nothing since then. I read the noble Lord, Lord McNally, whom I admire and like and am happy to see back, as being someone who would do something about this, so I would be keen to hear from the noble and learned Lord, Lord Wallace of Tankerness—I assume that he will be responding to this, only because there is no other Minister on the Bench apart from him—what has happened about this.

The position in Committee was that the Government were acknowledging that there was an issue—namely, that a political party could use its party political broadcast to promote one side or the other in the referendum campaign, thereby getting around the expenditure limits, which we all agreed to be equal for everyone. That is why I withdrew my amendment, but we have heard nothing. Perhaps the Minister could enlighten us about what happened.

[Lord Soley]

I support my noble friend on Amendments 8 and 9; they are important. I do not want to spend time on this, but I re-emphasise what has been said; on several occasions we have been promised changes and concessions that have been needed throughout the Bill, but we have had nothing. This does not reflect well on the Government; it reflects very badly, and it is a large part of the reason why we have problems on this.

I shall address the issues in the amendment. There is no doubt in my mind that it is important to keep the funding and the financing separate between elections. My noble and learned friend has made that point. The issue is also covered by the Political Parties, Elections and Referendums Act 2000 in that—and I understand that the Electoral Commission has this view—the Act makes it clear that there should always be a distinction between the various elections in the funding available for them. Along with the Electoral Commission, we make the point—I certainly want to emphasise it—that we should continue to make sure that there is a separation in the funding of elections. A referendum should not be muddled up in a party election broadcast that is actually talking about the election of people as opposed to the outcome of a referendum.

The other thing that the Electoral Commission drew attention to—and this was the first time that I had had a chance to think about it—is that Section 127 of the 2000 Act to which we are all referring currently prevents broadcasters from transmitting,

“any broadcast whose purpose (or main purpose) is or may reasonably be assumed to be”,

to further a referendum campaign. That is what we want to avoid, and my anxiety—this is the point that the Minister has to answer—is whether that wording in the Act would cover all aspects of an inclusion of statements about the referendum in any party political broadcast. It would clearly exclude a party political broadcast that focused particularly strongly on the referendum. It would stop a party putting out an election broadcast that focused maybe 50 per cent of the time on the referendum. I am not sure, however, that that section of the 2000 Act would prevent a reference to the referendum in a way that might encourage people to vote one way or the other. For example, the party political broadcast could be almost entirely on that party’s general policies but could end with a statement at the end that, for example, “We also believe that by voting this way or that on the referendum, you will assist our policies”, or, “You will assist this change”. In other words, it is not clear to me that one sentence in that broadcast would be excluded under the 2000 Act. We need some clarity on that.

20:45

You do not need to be too clever to work out that if you spend most of the time and argument on your party’s policies, but then put in one or two sentences about how people should vote in the referendum, you can sway opinion. As well as generally supporting this amendment, I want to know whether it is true that Section 127 of the 2000 Act would exclude any reference at all to the referendum, or whether you could have one or two sentences in the broadcast that would support one view or the other. If Section 127 is not clear enough to exclude that, these two amendments are particularly important and ought to be supported. If the legal view is that Section 127 of the Act would exclude any reference to the referendum, we are covered, but I am not sure that it does. The wording, as I understand it, is a little weaker than I would like it to be.

[The Advocate-General for Scotland (Lord Wallace of Tankerness)]

My Lords, these are important amendments. I immediately take the point made by the noble and learned Lord on the follow-up to Committee. I regret any discourtesy that has been felt by the noble and learned Lord. While he was making his comments, I had the draft of a letter to him; I have now had it confirmed by the Leader of the House that it has been issued. It is dated with today’s date, so he might not have received it yet, but it is a fairly comprehensive letter that runs to almost three pages. I will not read it out or put it on the record. I apologise if the noble and learned Lord has not yet received it.

[Lord Falconer of Thoroton]

What on earth is the point of sending me a letter, which I have not had a chance to consider, that arrives after Report has started?

[Lord Wallace of Tankerness]

I can only confirm the factual position. I fully take the point that the noble and learned Lord has not yet had an opportunity to consider the letter. I have no idea when it was put into the system. I saw a draft earlier but was not in a position until now to confirm that it had been issued. As I indicated, I apologise for any discourtesy to the noble and learned Lord.

I turn to the two amendments. On the first one, as we explained in Committee, the Government introduced the clause to which the amendments relate in the other place after the Political and Constitutional Reform Committee identified an ambiguity in the current legislation—the Political Parties, Elections and Referendums Act 2000—over whether publication of material about the referendum by a media organisation in favour of a specific result would be caught by the spending restrictions that apply to the campaigning groups. Clause 5 provides that the costs of covering and reporting on the referendum in the media are not referendum expenses. In the interests of the freedom of the press, it would be wrong for the spending restrictions to apply in this way. I think that is common ground across the House.

The amendment moved by the noble and learned Lord seeks to add “referendum campaign” before “broadcasts” to line 7 of page 4. This would go against Schedule 13 to the PPER Act 2000, which sets out that,

“agency fees, design costs and other costs in connection with preparing or producing”,

referendum campaign broadcasts are to be included as referendum expenses. I am not sure whether it was the noble and learned Lord’s intention to exempt such expenses from counting, but the Government do not agree that this should be the case. Designated lead campaign organisations are entitled to free referendum campaign broadcasts in terms of airtime, but the expenses incurred in respect of the production of these referendum campaign broadcasts do and should count towards referendum expenses. Therefore, it would not be right to accept this amendment, which would exempt these production expenses from counting.

Another reason why we do not agree with the first amendment is that it would bring back the ambiguity that we sought to remove through Clause 5 by limiting the provision to referendum broadcasts only. It would not therefore cover other types of broadcast, as it was designed to when we added it to the Bill. The result would be to reactivate the question of whether any broadcast other than referendum campaign broadcasts would be caught by the spending restrictions as they are currently drawn. It would then be ambiguous as to what would and would not count as referendum expenses in other types of BBC or Sianel Pedwar Cymru broadcasts—such as news programmes and politics programmes—other than those for the referendum campaign. We all agree that the media play a vital role in building public awareness and presenting facts and opinions on the matters raised by the poll. This amendment could prevent media comment if the spending limit for referendum expenses was reached. This would not be right. That was also the view of the Political and Constitutional Reform Committee in the other place. We believe that accepting this amendment would go against the Committee.

We agreed in Committee to consider carefully the second amendment. I can assure the House that the Government have done so. I regret the lateness of the letter, but the position is set out in it. The Government agree with the principle that party election broadcasts should not be used as referendum campaign broadcasts. As was highlighted in Committee, there is a clear definition of what constitutes a referendum campaign broadcast under Section 127 of the Political Parties, Elections and Referendums Act—to which the noble Lord, Lord Soley, drew our attention. Any broadcast whose purpose or main purpose is to procure or promote an outcome in the referendum is a referendum campaign broadcast. Referendum campaign broadcasts can be made only by the designated lead campaign organisations. The current law therefore already provides that the purposes—or main purpose—of party election broadcasts must not be to promote or procure a referendum outcome. Therefore, we can be assured that party election broadcasts cannot be used by political parties as a significant referendum campaign opportunity. In a moment, I will come to the crucial point that the noble Lord, Lord Soley, raised.

Section 127 of the PPER Act provides a safeguard against a political party using a party election broadcast as a referendum campaign broadcast. However, it also provides appropriate leeway for broadcasters to make a judgment call as to whether material that a party might want to broadcast strays beyond mentioning the referendum in passing in an election broadcast and into the realms of what would become a referendum campaign broadcast.

[Lord Falconer of Thoroton]

Is the noble and learned Lord saying that, if one of the purposes of a political party’s broadcast—though not its main purpose—was to encourage people to vote in a particular way in the referendum, it would infringe Section 127 of the Political Parties, Elections and Referendums Act?

[Lord Wallace of Tankerness]

What I said was that, as I understand it, under Section 127, any broadcast whose purpose or main purpose—there is obviously a difference; a purpose is not necessarily a main purpose—is to promote a particular outcome would fall foul of Section 127.

The point I was trying to develop is that there is a judgment call to be made as to whether we recognise and accept that material that a party might want to broadcast that strays beyond mentioning the referendum in passing in election broadcast and goes into the realms of what then becomes, in terms of the Act, a referendum campaign broadcast. In one view, a statement that briefly refers to the referendum—the fact that it is taking place and sets out whether the party supports a particular outcome—is merely an expression of the party’s policy. Such a statement may be necessary to explain the policy platform of the party’s election campaign and may not qualify as referendum campaigning in a wider sense. If that is right, this sort of content may have a legitimate and logical place in a party election broadcast. Going further than that—for example, by setting out the arguments in support of its favoured outcome—may cross the line and move towards it being a broadcast that is subject to the limitations in Section 127. Obviously the Government are not the ultimate arbiter here and the views of the broadcasters are critical. However, this amendment would remove any ability for the broadcasters to take a flexible approach to these sorts of issues.

Having spoken with the broadcasters, the Government think that this sort of flexibility can be sensibly administered without causing undue harm to the referendum or election campaigns. Indeed, not providing that sort of flexibility might cause undue harm to effective and fair campaigning. There will be party election broadcasts for the Scottish Parliament, the Welsh Assembly, the Northern Ireland Assembly and local elections on 5 May.

We have discussed the technicalities of the noble and learned Lord’s amendment and how these party election broadcasts would be regulated in practice during a referendum period with colleagues from the Department for Culture, Media and Sport, representatives from the BBC and the Broadcasters’ Liaison Group, Ofcom and the Electoral Commission. It is clear that in matters of political broadcasting, particularly political advertising, broadcasters are frequently required to make a judgment about what constitutes correct practical interpretation of the legal requirements. The need for broadcasters to make a judgment in interpreting Section 127 of PPERA would not be unusual in this context.

I readily accept that on one view the amendment could be seen as helpful for broadcasters as it draws a black and white line in legislation as to what material can and cannot be included. The Government are concerned, however, that this approach would go against a well established system that is already in place for dealing with matters of party political coverage and would unnecessarily limit the ability of a party to show how its position on the referendum forms part of the wider policy platform on which it wishes to campaign in the elections on 5 May.

[Lord Soley]

I was trying not to intervene but I have to do so in view of what the Minister has just said. The type of statement that would worry me is if the party political broadcast was majoring on, for example, giving more power to the people—which might be about a range of things, local authorities or whatever— and it said, “If you vote this way or that way on the referendum, that will increase your power”. I suppose that we need to go back to the broadcasters on this, but I do not think that that ought to be allowed. The Minister makes a fair point; we want to allow the broadcasters flexibility but they need to be aware that a statement like that would be seen as giving significant support to the referendum one way or the other.

[Lord Wallace of Tankerness]

I am grateful to the noble Lord for the way in which he presents a very tricky and complex issue. I think I indicated that one of the difficulties was the possibility of limiting the ability of a party to show how its position on the referendum formed part of a wider policy platform. The point I have been trying to make is that broadcasters have experience in this matter. It is probably invidious for Governments to decide what goes too far and what is on the right side of the line. There is also a question of whether legislating to such specificity on the content of party election broadcasts could risk limiting a political party’s freedom of expression. I do not think that anyone here would wish that to happen.

[Lord Tyler]

I have had experience of this matter. Is not the reality that anyone preparing a broadcast will always err on the side of caution as it would be a very expensive scenario if broadcasters were told, “We think you are infringing the requirements of the 2000 Act”, and they therefore had to amend dramatically, or even withdraw, the intended broadcast? Therefore, I should have thought that the present flexibility is much safer than the provision which the noble and learned Lord is trying to include in the Bill.

[Lord Wallace of Tankerness]

My noble friend makes a fair point. The last thing any political party wants is to find that, after having spent money, the broadcast has to be pulled. I shall discuss in a moment approaches that have been made to the political parties by the chair of the Broadcasters’ Liaison Group. I suggest that the appropriate place for further rules on the content of party election broadcasts would be under the framework established by the Communications Act 2003, where existing regulation of political broadcasts lies. The chair of the Broadcasters’ Liaison Group wrote to the political parties in November 2010, highlighting the existing provisions and opening lines of communication on the subject. It might be useful to read the content of the letter into the record. It states:

“If you are considering including any references to the referendum in your PEB, then we draw your attention to Section 127 of the PPERA. This section prevents broadcasters from transmitting any broadcast where it’s purpose, or main purpose, is, or can be assumed to be, to further a referendum campaign for a particular outcome other than by the designated RBCs. Therefore if you intend to include any references to the referendum in your PEB, I’d be grateful if you could contact me well in advance so that the BBC is able to make a judgment about whether the proposed PEB may put it in breach of the statutory provision”.

It is the Government’s view that this established mechanism of communication between the broadcasters and the political parties will effectively manage the situation and answer queries from the political parties as to what they can and cannot include in their broadcasts. The broadcasters’ guidance is the most appropriate place to deal with this matter, as for other aspects of political coverage.

These are important amendments. I again apologise that the noble and learned Lord saw the letter at a late stage, but I hope that, given what I have said, he will recognise that a lot of consideration has been given to this, including engagement with the broadcasters, the DCMS and others. I hope that the House will agree with the Government’s conclusion that, after careful consideration with relevant stakeholders, the current provisions, along with the broadcasters’ guidance, are the right way to deal with party election broadcasts during a referendum period, rather than amendments to the Bill. Against that background, I ask the noble and learned Lord to withdraw the amendment.

21:00

[Lord Falconer of Thoroton]

I am glad that the noble Lord, Lord McNally, is here and has recovered. He will remember what I said in Committee. I completely trust him, and I am more than happy to accept his assurances and to discuss the matter in the spirit in which he made the offer. I am absolutely sure that the two of us can reach a solution that is acceptable to both of us.

The noble and learned Lord, Lord Wallace of Tankerness, and the noble Lord, Lord McNally, will also remember that the noble and learned Lord, Lord Mackay of Clashfern, intervened in the same debate and said:

“I think that I am right in saying that at the moment a party-political broadcast in connection with a referendum is allowed, so long as that is not the principal or main purpose, or some such phrase, of the broadcast. It may be that what the noble and learned Lord, Lord Falconer, and others have identified is a question of whether or not that general provision is wise or whether it should be modified. The question may go somewhat further than just this referendum and that issue needs to be looked at”.—[Official Report, 15/12/10; col. 622.]

That was the issue to which my comments and the comments of the noble Lord, Lord McNally, referred.

I completely exonerate the noble Lord, Lord McNally, and the noble and learned Lord, Lord Wallace of Tankerness, of any fault on their part, but the consequence of what happened is that I have today been handed a letter, which I am reading while the noble and learned Lord gives what appears to be a wholly unsatisfactory answer. He appears to be saying that in order not to lose flexibility, it is important that political parties should be able to make a casual reference to the referendum in their party political broadcasts. He rejects my Amendment 9, which would mean that there would be certainty about the position and a level playing field. What would that protect? As I understand it, it would protect a political party’s right to mention the referendum. Superficially and on the face of it, that would seem to be utter nonsense and something which, if I had had an opportunity to talk to someone of the stature of the noble Lord, Lord McNally, or the noble and learned Lord, Lord Wallace of Tankerness, before they gave voice to the note I have here, would perhaps have been modified. That was the impression left by the assurance I was given by the noble Lord, Lord McNally.

I am disappointed at the lateness of the letter from the Leader of the House. I make it clear that I am not remotely blaming the noble Lord, Lord McNally, and the noble and learned Lord, because they are under different sorts of pressure, but it is an unfortunate process, which means that assurances are being given which, because of the speed with which we are operating, are not being delivered on. Although it is unusual to do so, I will bring this matter back at Third Reading. I beg leave to withdraw the amendment.

Amendment 8 withdrawn.

Amendments 9 and 10 not moved.

Clause 7 : Interpretation

Amendment 10A not moved.

Clause 8 : Commencement or repeal of amending provisions

Amendment 10B

Moved by

[Lord Rooker]

10B: Clause 8, page 6, line 19, leave out “must” and insert “may”

[Lord Rooker]

I wish to move the amendment formally because it was connected to the earlier Amendment A1. I beg to move.

[Lord Wallace of Tankerness]

My Lords, while I note that the noble Lord, Lord Rooker, has moved the amendment formally, we discussed it in context earlier and it is important to recognise that it goes much further—

[Lord Rooker]

I am happy not to move the amendment.

[The Deputy Speaker (Lord Skelmersdale)]

My Lords, either an amendment is moved or it is not. If it is not moved, the phrase is “not moved”. If words have been spoken—as they have been by the noble Lord, Lord Rooker—the amendment has been moved. That is why I called it.

[Lord Rooker]

In that case, I will move it, but obviously I will not press it. I fully accept that this must be brought into order, which cannot be done by inserting “may” in place of “must”. That is what the noble and learned Lord said. The evidence of that related to another issue, which was to do with the date. This may need a couple of hundred words from parliamentary counsel. I fully accept that while the two amendments are linked—I was questioned about this at the time; they should have been linked—this is not the solution. It does not solve the problem for the Government or parliamentary counsel. At some point, this has to be tidied up. I fully accept that Amendment 10B will not do this.

[The Deputy Speaker]

Amendment re-moved:

“Page 6, line 19, leave out ‘must’ and insert ‘may’”.

[Lord Wallace of Tankerness]

The amendment is re-moved but not removed—yet. I fully accept the spirit in which the noble Lord, Lord Rooker, re-moved it. As he recognises, this is not entirely consequential. We could get a turnout of 80 per cent and yet, with this change, we would still create a power rather than an obligation. I do not need to elaborate, as the point has been made. The Government cannot accept the amendment. In the spirit in which the noble Lord re-moved it, I ask him to withdraw it.

[Lord Falconer of Thoroton]

My understanding when I was a Minister was that, when an amendment was carried, the Government would bring forward amendments to tidy up the Bill to reflect the position in relation to the plain intent of the amendment—in this case, Amendment A1. We always did this and we expect the Government to make the rest of the Bill reflect the effect of the amendment of the noble Lord, Lord Rooker.

[Baroness Anelay of St Johns]

My Lords, perhaps I may assist the House from my memory of our long period in opposition, when the noble and learned Lord was a Minister. There were two occasions on which the Government might have taken action. One was when it was agreed in advance that an amendment was consequential on an amendment that was carried. I believe that that is not the matter to which the noble and learned Lord referred. He may be referring to the second occasion, which was that, when an amendment was carried, the sense of the rest of the Bill had then to be tidied up in order to reflect the spirit of the decision taken by the House.

Perhaps the noble and learned Lord would confirm that it is the second of those occasions to which he refers, because there was no agreement that this amendment was consequential on the first when the Division took place earlier today. That is not to say that the Government refuse to look at the implications of the Division’s result. However, the noble and learned Lord will be aware that there was no undertaking to consider this amendment as consequential on the first and he will of course appreciate that there is a difference between the two positions.

[Lord Falconer of Thoroton]

My Lords, I am entirely unclear what the difference is. Amendment A1 states:

“If less than 40% of the electorate vote in the referendum, the result shall not be binding”.

The noble and learned Lord, Lord Wallace of Tankerness, says that if one puts in “may”, one makes it unbinding even if the turnout is more than 40 per cent. Is that consequential or is it tidying up? I have no idea. I would like to know what the noble and learned Lord, Lord Wallace of Tankerness, is promising to do. With respect to the Chief Whip, I found the distinction meaningless, unhelpful and ill informed.

[Baroness Anelay of St Johns]

My Lords—

[Lord Falconer of Thoroton]

Perhaps I might finish my point.

[Baroness Anelay of St Johns]

It is customary, when a noble Lord accuses another Member of the House of being ignorant, to give them the opportunity to reply.

[The Deputy Speaker]

My Lords, it might be helpful to the House if I remind noble Lords that we are on Report.

[Lord Falconer of Thoroton]

I apologise. I was keen to find out the position of the Government in relation to this. What the Chief Whip said was unhelpful. It is important for the Government to state their position.

[Lord Wallace of Tankerness]

My Lords, the vote took place only a few hours ago and the Government are still to consider how they will respond to it. In answer to the noble and learned Lord’s question, this is neither a consequential amendment, as the noble Lord, Lord Rooker, and I have indicated, nor is it a tidying-up one, because it does not tidy up. It goes much further than that. Indeed, it breaks the linkage, because it would make the power permissive rather than a duty. As I indicated, that could therefore mean that the power was there in any circumstance. Even if there was an 80 per cent turnout at the referendum with a 75 per cent vote in favour, the effect would not be to oblige the order to be brought forward to implement a yes vote. That was not what the House voted for and therefore I cannot accept the noble Lord’s amendment, which I think he fully understands.

[Lord Rooker]

I do. I do not want to fall out with my noble and learned friend but I accept the distinction that the Chief Whip gave in respect of this amendment. The position is the same as with Amendments A2 and 7B, where one is consequential on a change in the date. This looks simple and it is simple. The point is that the House knew what the situation was with the date change, just as it does with Amendment A1. In the morning after they have slept on it, the Government may take a view and say, “We’re going down the other place. We’re going to get this kicked out anyway”. That is a tough call when the support of the Cross Benches is taken into account. However, some rewriting of other parts of the Bill is required—it is not just a question of “may” or “must”—and I fully accept that. On that basis, I beg leave to withdraw the amendment.

Amendment 10B withdrawn.

Amendment 10C not moved.

Amendment 11

Moved by

[Lord Davies of Stamford]

11: Clause 8, page 6, line 21, leave out paragraph (a) and insert—
“( ) over one third of those eligible to vote in the referendum have voted in favour of the answer “Yes”, and”

[Lord Davies of Stamford]

My Lords, this amendment has been very happily and felicitously overtaken by the House’s decision to adopt Amendment A1 in the name of my noble friend Lord Rooker. I think that it is possible to produce substantive arguments in favour of a threshold before a referendum comes into effect and it is possible to produce another set of arguments in favour of a threshold before a referendum becomes mandatory. However, I suspect that the whole House will be unanimous on this. It would not make any sense whatever to have two thresholds in relation to a referendum. Therefore, I have no intention whatever of asking the House to vote on this or of taking the matter further. I just want to make one comment.

Whatever the substantive arguments for the two types of threshold that I have just outlined, my noble friend Lord Rooker seems to have won the argument in favour of his approach and his amendment. The House of Commons has not yet pronounced on that. It has considered the approach, although not the actual figures, that I suggest for a threshold and it has rejected it. It is right that this House should be very conscious of the views of the elected House on a matter such as this. My noble friend Lord Rooker has come forward with a totally original idea. It was not considered in the other place or by anyone in this place before he ingeniously came forward with it. Therefore, it is with great pleasure that I say that my own amendment ought, in my view, to be eclipsed, overtaken and indeed buried by Amendment A1, and I have no intention of taking it any further.

[The Deputy Speaker]

My Lords, the Woolsack is confused. Amendment proposed—

[Lord Davies of Stamford]

Not moved.

[The Deputy Speaker]

No, my Lords. That is not on. Amendment proposed: in page 6, line 21, leave out paragraph (a) and insert the words printed in the Marshalled List.

21:15

[Lord Grocott]

My Lords, this amendment is one of a group. Now that the amendment has been moved, I assume that we can speak to the amendments in the group, of which two stand in my name. I have no intention of saying anything about Amendment 12A, which would require a 50 per cent turnout in order for the referendum to be carried. Technically, I could probably push it a little further but I accept that my noble friend’s amendment is an improvement on that and that it is probably more acceptable to the House, so I do not intend to say any more on that amendment.

However, I do intend to say a couple of words about Amendment 12B, which is not as printed on the Marshalled List. The gremlins got into that somehow. The way in which it is written in the Marshalled List makes no sense whatever. It basically states that the referendum will not be carried if 25 per cent of those who have voted in the referendum have voted yes. Obviously, by definition, if only 25 per cent of the people who have voted in the referendum have voted yes, the referendum would not be carried. The amendment as it stands is nonsensical, which is why there is a manuscript amendment that contains what I intended to say—that the referendum would not be carried unless one in four of the electorate voted yes.

I try to take a common-sense approach to legislation in a debate about a major change to our constitution. We have already decided that the electorate are not the real electorate but the people who are on the electoral roll; they do not include the hundreds of thousands, if not millions, who are not on the electoral roll. However, leaving that aside, I simply suggest that 25 per cent—one in four—of the total electorate should vote yes in order for the change in our constitution to take place.

I have done this at the suggestion of the noble Lord, Lord Tyler, in Committee. He is looking startled and I am not surprised. He put forward an objection to my amendment that required a 50 per cent threshold on turnout. He asked what would happen, given the 50 per cent threshold, if 49 per cent voted yes in the referendum and no one or less than 1 per cent voted no. He is looking puzzled. The point that he made is that, in those circumstances, according to my amendment, the referendum would not be carried. I hope that I am carrying the House with me at this stage. I am not even carrying the noble Lord, Lord Tyler, with me, which is particularly worrying.

I shall try again. His objection was to my 50 per cent turnout threshold—in other words, the referendum would be dead if half the electorate did not vote. He asked what would happen if 49 per cent of the electorate —which was wildly optimistic from his perspective—voted yes and no one, or one or two, voted no. He said that in those circumstances my amendment would be grossly unfair to the yes campaign because, despite getting 49 per cent of the electorate’s vote, it would not carry. That was his point. Has the penny dropped?

[Lord Tyler]

The penny dropped a long time ago—many hours ago. The noble Lord, Lord Grocott, is wrong about the arithmetic. I was talking about the circumstances in which 45 per cent voted yes and 4 per cent voted no, so there would be no qualification. However, if 44 per cent voted yes and 6 per cent voted no, then it would carry.

Once you get into this game, the noble Lord’s colleague in the other place, Mr Christopher Bryant, was absolutely right to say:

“I do not agree with the hon. Gentleman about thresholds in referendums because, broadly, they are not a good idea”.—[Official Report, Commons, 2/11/10; col. 846.]

In fact, with one exception—the Scottish case—thresholds in referendums are a new development in our constitution and I honestly think that we should give them very careful consideration. Mr Bryant was right: this is just as much a change to our constitution as the big changes that we keep being told that this referendum is introducing.

[Lord Grocott]

I am quite hurt. I have brought forward an amendment that precisely meets the noble Lord’s objection, which was—I repeat—that a huge number of people could vote for the yes campaign and it would still not carry if it was less than 50 per cent of the total turnout. So—having established that point, I hope—I have therefore brought forward this amendment which meets his objection. It states that it would require 25 per cent of the electorate for the yes vote to carry, which obviously completely removes the problem he identified in relation to my 50 per cent turnout threshold.

After my long preamble, far longer than I had intended, perhaps I may point out that all the amendment suggests is a change in our electoral system—which the Liberal Democrats, throughout my adult life and probably before then, have been saying is what the electorate is desperate for. I say simply that it would be a good idea if you could get one in four of the electorate to vote in favour because that would validate the referendum. Apparently, they are resisting that commonsense proposal as well.

We are in a silly position, unless someone wants to intervene from the Liberal Democrat Benches. I cannot believe that even Liberal Democrats would argue that if only three people voted in the referendum—two in favour and one against—that would be a valid basis on which we could change our country's constitution. If any of them thinks that that would be fair, right and sensible, will they please intervene? I am not filibustering; I want to get this over with as much as anyone else does. If they cannot tell me, the only difference between us is the level at which the threshold should be. In the absence of any intervention, I must assume that they are in what is, frankly, a silly position.

That would not matter to me too much, were it not for the fact that this referendum will not necessarily be the last one of this Parliament, because I have to take Nick Clegg at his word, confusing as that seems at times. He has described this as just part of the greatest reform package since 1832—greater than women's suffrage, universal adult suffrage, or anything of that sort. We have two more Bills coming down the line: one to establish fixed-term Parliaments and the other to abolish the House of Lords in its present form and replace it with a fully elected House.

It seems that, under the Bill, if three people in the United Kingdom vote in the referendum—two in favour and one against—we change the constitution. I ask those noble Lords who say that this is not as important a constitutional issue as abolishing the House of Lords in its present form the following question. Would any of them be happy with a referendum, should it come—and my word it ought to; it would surely be indefensible to have a referendum on a change in the voting system but not on one which effectively abolishes one of the two Houses of Parliament—on a two, one vote in the country? Or do they think, as I and other noble Lords do, that there should be a rather more convincing demonstration of the public will on abolishing one of the two Houses of Parliament? The danger of the present situation is that we have no threshold, which means that the precedent will have been set that future referenda on changing the constitution, however big that change may be, could be done on a very small turnout and a very small yes vote.

It is late, I do not intend to press this to a Division, but I am intrigued to discover that there is no one, apart from the noble and learned Lord, Lord Tankerness, who is highly skilful and whom I assume will respond to the amendment, can explain that. I assume that the noble and learned Lord has a graphic explanation as to why he would be comfortable with a very low turnout and a very low yes vote changing our country's constitution.

[Lord Lipsey]

I understand why those on the Lib Dem Benches do not rise to their feet to dispute the amendments. But, as one who, on the AV referendum, agrees with them, I shall do and speak for a minute or two. I think that thresholds are a bad idea in referendums. I supported the amendment proposed earlier by the noble Lord, Lord Rooker, because it seems to me that, generally, a pre-legislative vote is a good thing, but I do not support a threshold.

If there is a vote on this, if the threshold proposed by the noble Lord, Lord Davies, is to be reached, it will require 264 Peers to vote in the Content Lobby for it to be carried. If that of the noble Lord, Lord Elystan-Morgan, is to be reached, we will need a total turnout of 316 Peers. And if that of the noble Lord, Lord Grocott, is to be reached—50 per cent, and 25 per cent yes— we need 395 peers to vote with 198 saying yes. I do not see why we should have a different test for the legitimacy of the vote in the country than we have for the legitimacy of the vote in our own House. Thresholds are arbitrary, they introduce bias, they distort debate and they have absurd consequences. I deal very briefly with each of these. As regards them being arbitrary, look at the range of numbers before us. They could be nice round numbers. As Sir Patrick Nairne, chairman of the independent Commission on the Conduct of Referendums, said, the main difficulty in specifying a threshold lies in determining what figure is sufficient to confer legitimacy. There is no answer to that. On the bias aspect, one side has to achieve only one thing—

[Lord Davies of Stamford]

I find that my amendment inadvertently has provoked a rather interesting discussion on this matter. I am listening to my noble friend with great attention. Of course, there is no scientific way of determining what the particular figure might be, but is my noble friend arguing that even if a major constitutional amendment is, say, passed by 6 per cent voting in favour, out of 10 per cent who vote altogether, that that would be an adequate degree of legitimacy justifying constitutional change?

[Lord Lipsey]

It is a good point that my noble friend makes. The answer to it is that that is why I want a pre-legislative referendum, so that the judgment can be made in the light of all the facts after the referendum and not be made in advance in what is necessarily an arbitrary way.

On bias, one side has to achieve only one thing: it has to prevent a majority voting against the change it opposes. However, the yes campaign has to do two things: it has to win more votes and to do better it has to make sure that the turnout is up. This also raises questions about legitimacy of the result. Would the side against which this bias exists really regard a result achieved in this biased way as legitimate? In my view, it would not, although it might rely on a verdict of Parliament after a referendum as a legitimate verdict in the circumstances.

My third point is that the threshold distorts debate. What we want in this referendum is both sides putting their strongest possible case in front of the electorate either for the proposed change or against it—whichever they want. But this case gives the no campaign an incentive to put two different arguments: “Vote no if you must vote, but we’ll get just as many votes if you just don’t bother to turn out”. It is the sit-and-watch-telly no campaign. That does not seem to be a very good idea. The experience of Italy—I will not go into it in great detail—where abstentions are not a vote does not reflect well on this practice. Nor indeed does the consequences of the introduction of the threshold in the first Scottish referendum on devolution, which led to the issue being completely unresolved in fact until the 1997 referendum finally settled it. The referendum did not have the effect that everybody wanted it to have of settling the devolution process.

Finally, my noble friend Lord Grocott has just described one absurd result where two people vote for and one against. I accept that that is an absurd result. But it is no more absurd than the result that would stem—I am sure he was not intending this—from the amendment proposed by the noble Lord, Lord Davies, where 32 per cent vote yes, 1 per cent vote no, and yet the referendum automatically, and without further debate in Parliament, falls. That would be at least as absurd a result as the one my noble friend Lord Grocott predicates.

I have rattled through an argument that deserves more probing and profundity, because the noble Lord, Lord Rooker, came out with a perfectly viable solution to these competing considerations. I was, therefore, very glad to hear that the noble Lord, Lord Davies, was not going to press his views to a vote. However, I think that the House should briefly be exposed to the case against these thresholds as well as the case for them, if only to reinforce itself in its wisdom.

At one stage I thought about abstaining on my noble friend Lord Rooker’s amendment because of my dislike of thresholds, which for once in my entire time in the House of Lords would have affected the result. It is a good thing I did not, so phew. The House of Lords might consider the argument that I have briefly developed and decide that, in view of it, we made a wise decision earlier this afternoon, albeit narrowly.

21:30

[Lord Howarth of Newport]

My Lords, perhaps I may say a word about Amendment 14 in the name of my noble friend Lady Hayter of Kentish Town. Her amendment would provide that if there is not a majority in support of changing the electoral system,

“in any one of the four parts of the United Kingdom”,

the proposition should fall for the United Kingdom as a whole. I certainly hope that there is common ground around the House that we wish to strengthen the Union and bind the peoples of the four parts of the United Kingdom in one coherent political system and, as far as possible, in one political culture. It would be singularly unfortunate and divisive, were the referendum to be lost in one of the four parts—let us suppose, for example, that the people of Wales were to vote no but those of England, Scotland and Northern Ireland were to vote yes—if the people of England, Scotland and Northern Ireland were then to impose their preferred version of an electoral system on the people of Wales. I think that that would be divisive, traumatic and very unfortunate.

[Lord Tyler]

Is the noble Lord really saying that it would be divisive in those circumstances when it is clear that what would be much more divisive is that if one part of the United Kingdom was able to veto the clear majority of the decision of the rest of the United Kingdom? That is a complete nonsense.

[Lord Howarth of Newport]

The noble Lord sees things in a mirror glass world and he is entitled to look at them from that perspective. However, I invite him to consider what the impact on the sentiment would be in Wales if, having voted against the proposition that, say, the alternative vote system should be used, it was none the less to be imposed by the rest of the United Kingdom on the people of Wales. I think that that would create a grievance and that it would be an unhappy development. The amendment in the name of my noble friend is well worth the House meditating upon.

[Baroness Thornton]

My Lords, I do not intend to address Amendments 12 or 15. The noble Lord, Lord Elystan-Morgan, spoke in the earlier debate on Amendment A1 moved by my noble friend Lord Rooker, and I follow his lead in saying that we do not intend to pursue these amendments.

[Lord Wallace of Tankerness]

My Lords, we have had another interesting debate on, as the noble Lord, Lord Lipsey, indicated, the difference between the amendments we are discussing here and those which were debated earlier. I only wish that the strength of the argument deployed by the noble Lord against thresholds had been sufficient to persuade everyone to abstention, even if I was unable to do that, but that did not happen.

The manuscript amendment from the noble Lord, Lord Grocott, which would mean that 25 per cent of the electorate would have to vote yes is a reflection of the amendment in the name of the noble Lord, Lord Davies of Stamford, which seeks that 33 per cent of the electorate should vote yes. We then have a straightforward 50 per cent eligibility to vote proposed by the noble Lord, Lord Grocott, and the amendment in the name of the noble Baroness, Lady Hayter, which the noble Lord, Lord Howarth, spoke to, regarding the individual constituent parts of the United Kingdom. I acknowledge also that the noble Baroness, Lady Thornton, did not speak to the amendment in her name and that of the noble Lord, Lord Elystan-Morgan.

I think the arguments against thresholds were put very eloquently by the noble Lord, Lord Lipsey, and are a cogent argument as to why the threshold-against turnout, particularly although not exclusively, does not necessarily lead to fairness compared with a straight situation where people are invited to vote and the majority wins. But the proposals that relate to a threshold that the yes vote has to reach are particularly pernicious. Earlier the noble Lord, Lord Lipsey, referred to the 40 per cent threshold that was imposed on the Scotland and Wales referendums in 1979. The Welsh referendum did not arise because there was a very strong no vote, but although 64 per cent of the electorate turned out in Scotland and a majority voted in favour of devolution, it was not implemented for another 20 years. It did not settle the question. It left, as the noble Lord, Lord Rooker, said earlier, a bad taste. Of all thresholds, it does not satisfy the electorate and particularly those who campaign and those who would seek a yes vote.

The amendment that the noble Lord, Lord Howarth, spoke to on behalf of the noble Baroness, Lady Hayter, would seek a requirement of a majority vote in England, Scotland, Wales and Northern Ireland, rather than a simple majority of all votes taken together. This is a UK-wide referendum on what the electoral system should be to elect the House of Commons in the United Kingdom Parliament. I believe it transcends particular localities or regions. The pros and cons of the system will be debated and considered by people regardless of where they live.

In Committee, the noble Lord, Lord Lipsey, uttered words of caution against this kind of amendment. He said that,

“to seek to set one nation within that kingdom against another kingdom is neither desirable nor wise”. [Official Report, 20/12/10; col. 827.]

The noble and learned Lord, Lord Falconer, rejected this type of amendment because,

“we should do everything to promote coherence in the United Kingdom. That means that, where we are voting on a national voting system, implementation of any referendum should be guided by what the national vote is”.—[Official Report, 20/12/10; cols. 843-4.]

If we were to find, for the sake of argument, that the rest of the United Kingdom—Wales, Northern Ireland and England—had substantially voted in favour of a change yet Scotland had a narrow majority against, it would be unacceptable that that one country with a narrow majority against should effectively exercise a veto over all other parts of the United Kingdom.

Noble Lords who have spoken to their amendments have indicated that they are not going to press them given the vote that was taken earlier. On that basis, I ask the noble Lord, Lord Davies of Stamford, to withdraw his amendment.

[Lord Davies of Stamford]

I beg leave to withdraw the amendment.

Amendment 11 withdrawn.

Amendment 11A to 12B not moved.

Amendment 13

Moved by

[Lord Lipsey]

13: Clause 8, page 6, line 23, leave out paragraph (b)

[Lord Lipsey]

My Lords, at an earlier stage on the Bill, I described this as the buckle that linked the AV bit of the Bill with the constituencies bit. It is a slightly peculiar buckle as the constituencies bit goes ahead even if AV does not because the referendum is lost, but AV cannot go ahead if the constituencies bit does not. I suppose that reflects the bargaining strength of the two sides during the coalition negotiations.

I do not see any great point in labouring this issue any more. The Government are not showing any great willingness to split the Bill, as some of us suggested from the first that they would be wise to do. All I would like to hear the Minister say is that this is a political deal and so has to stay. I do not even ask him to say that this is a sordid, low, political deal between two unequal partners which should never have taken place. I do not expect anything like that from the noble and learned Lord. If he would just say that this is a political deal and would the House kindly accept it on that basis, I shall do so and withdraw my amendment.

[Lord Falconer of Thoroton]

My Lords, my name is on this amendment as well. To slightly increase the excruciation for the noble and learned Lord, it is impossible to understand what the basis of the conditionality is. Assume that 99 per cent of the population were to vote in favour of changing the system to AV, even if something happened to prevent the Boundary Commission changes being introduced, then, as I understand the Government’s position, they will not introduce AV. Why is that? What is the logic? The only logic must be some sort of political deal. Honesty would help the noble and learned Lord a lot.

[Lord Wallace of Tankerness]

My Lords, these amendments, as the noble Lord, Lord Lipsey, has indicated, seek to undermine, even remove, the link between the commencement arrangements for the AV and for the constituencies parts of the Bill. Anyone who has ever been a political realist would recognise that in terms of a coalition one part of the Bill—the first part—had greater salience and resonance with the Liberal Democrats, and the same applied to the Conservative Party when it comes to Part 2. I believe in equality of votes across the United Kingdom and I have not had difficulty, therefore, in arguing that case.

The issue of linkage has been one which we have debated from the outset. The noble Baroness, Lady McDonagh, raised an issue about it as we started Committee stage and withdrew her amendment, and the parties and the coalition Government have made it very clear that these two parts are linked. The question has been raised—it was hinted at by the noble Lord, Lord Lipsey—as to why, if the referendum does not produce as successful an outcome as the Liberal Democrats would wish to see, we are tied in, as it were, with the boundary change. Quite apart from the fact that, as I have already indicated, there is something right in principle about trying to seek greater equality among constituencies, as a liberal and a democrat I would find it very difficult to say, if the people had expressed their view in a referendum and said no, that somehow or other we should try and thwart another part of this Bill which is linked.

There is nothing wrong in parties entering into an agreement that they then make their best endeavours to deliver; in fact it is honourable and perfectly proper. I believe both parts of this Bill hang together and are linked. They give the people a say as to whether they want to change the way in which the House of Commons is elected while also ensuring that the House of Commons is elected, be it on first past the post or on the alternative vote, in constituencies that are much nearer to being equal.

On that basis I would invite the noble Lord, Lord Lipsey, to withdraw his amendment.

[Lord Lipsey]

As the Minister was making his remarks the unworthy thought occurred to me that perhaps we should have a referendum on the constituency changes. You would get a jolly good turnout in Cornwall and people in the Isle of Wight would be flocking to the polls with those from Brecon and Radnor and Anglesey, all to say no to this. Then the Minister would be able to say, “As the British people have spoken, I cannot force this down their throats”. That perhaps is a little too much. The boundary changes will no doubt, if agreed by this House and by Parliament, go ahead at the end of the day. There seems little point in pushing the matter any further and I therefore beg to withdraw my amendment.

Amendment 13 withdrawn.

Amendments 14 to 16 not moved.

Amendment 16A

Moved by

[Lord McNally]

16A: Clause 8, page 6, line 32, leave out from “that” to end of line 33 and insert “subsection, but
(b) does not affect any election held before the first parliamentary general election following that day.”

[Lord McNally]

My Lords, this amendment removes the power in Clause 8(4) to make a transitional or saving provision when implementing the AV provisions through an order made under Clause 8(1). Instead, it inserts the provision that any order made under Clause 8(1) will not affect any election held before the first parliamentary election following that day.

The Government have brought forward this amendment in response to the recommendation of the Delegated Powers and Regulatory Reform Committee that the power in Clause 8(4) should be subject to the negative procedure. This was on the grounds that,

“the power to include transitional and saving provision may determine which form of voting system is to apply in the case of a particular parliamentary election. That is a significant power, which ought to be subject to Parliamentary control”.

This Government attach great importance to the views of this and other Select Committees, and we have reflected carefully on the committee’s recommendations. As my noble and learned friend Lord Wallace indicated in Committee, we had envisaged that in the event of a yes vote in the referendum, this power might be used to provide that any parliamentary by-elections held between the commencement of the AV provisions and the subsequent general election would take place under the existing first past the post system. That is because the Government take the view that it would not be appropriate in the intervening period between the commencement of these provisions and the subsequent general election for by-elections to take place under the AV system, since that would have the result that the House of Commons would contain Members elected under two different electoral systems.

The Government are content to accept the committee’s conclusion that the issue of the powers in Clause 8(4) should be addressed. However, the effect of applying parliamentary procedure to the powers proposed would run contrary to the Government’s stated intention that the referendum on the voting system should be binding. Moreover, this House has already expressed its view on this issue by voting on the first day in Committee against an amendment to make the referendum indicative. In order to meet the Committee’s concern, the Government have instead brought forward this amendment, which removes the powers in Clause 8(4) and instead makes the position on by-elections held in the period between the AV provision coming into force and the first parliamentary election on AV clear in the Bill. This provision goes further than the committee’s recommendation by making the Government’s intentions absolutely clear in the Bill. On reflection, we think this is preferable to leaving the issue to future secondary legislation, which would be the effect of following the committee’s recommendation. I beg to move this amendment, and I hope that the House will support it.

[Lord Falconer of Thoroton]

I welcome the noble Lord, Lord McNally, back to front-line service on this exciting Bill. We have missed him a lot in every single respect. He has explained that very—

[Lord McNally]

Since this is my only opportunity, I thank those on the Labour Benches for sending me a bouquet of cut flowers. After MI5 had dismantled it, it was put in a vase in my room.

[Lord Falconer of Thoroton]

And did they find what we hid in it? We genuinely welcome the noble Lord back. He is very popular on our Benches. He has explained this very clearly. We have no problem with it. We think the critical point that he is making is that by-elections after the passage of the Order in Council that brings the boundary changes into effect, which is the last stage in bringing in AV after a yes vote, will not be conducted under AV until after the first general election is conducted after AV. We have no problem with that.

Amendment 16A agreed.

Amendment 16B

Moved by

[Lord Howarth of Newport]

16B: Clause 9, page 6, line 40, leave out from “preference” to end of line 41

[Lord Howarth of Newport]

My Lords, Amendments 16B, 16C, 16E and 16F are intended to substitute for the optional preference AV system the obligatory preference AV system. We touched upon this issue in an earlier debate, and on the first day in Committee my noble friend Lord Campbell-Savours spoke very powerfully indeed on this topic. I none the less ask your Lordships’ indulgence to permit me to say a very few words about this because it is an issue of prime importance in this Bill.

My amendments, if they are technically valid, would replace the Queensland system, which is what the Government are proposing in the Bill, with the Australian federal system, and there is a very important difference. If you are voting in an Australian federal election to the Australian House of Representatives, you are required to vote for all the candidates on the ballot paper in the order of your preference. If you fail to do so, your vote is invalid. In the optional preference version of AV that applies in Queensland, you do not need to vote in order of preference for all the candidates; you may, if you prefer, vote for only one candidate. It is quite instructive to see what has happened in Australia over the years. The system that now operates in Queensland was introduced in 1992. Initially, when that was done, very few voters failed to express all their preferences in rank order, as had been their tradition—only about 20 per cent, initially. However, as time went by, more and more of them realised that they did not need to cast all these preference votes and they stopped doing so in very considerable numbers.

The turning point came in 2001, as my noble friend Lord Campbell-Savours told the House in Committee, when the Australian Labor Party ran a “just one vote” campaign, because it had realised that it was more likely to be in the interests of their candidates that they should discourage people from exercising all the preferences that they might. To concentrate all their votes on one candidate is termed “plumping”, a term originally coined in 19th century England when elections to school boards were introduced. Under that system, an elector was permitted to exercise perhaps 20 votes—a vote for every member of the school board—but they were allowed to cast all their votes for the same candidate. The object of that provision was to try to ensure that representatives of Christian minorities were represented on school boards. However, what actually happened in practice, very interestingly, was that it was organised that people would plump or concentrate their votes in support of women candidates, because it was felt to be desirable that women should serve on school boards. That plumping was very beneficial to the feminist cause in the 1880s and thereabouts. The term has been borrowed in Queensland.

The result of the practice of plumping in Queensland, as we are told by the academic authority of Messrs Rallings and Thrasher from the University of Plymouth, is that in 2009, 63 per cent of those who turned out at the state elections in Queensland voted for just one candidate—and, in some constituencies, the proportion was as high as 73 per cent. Even when the political parties urged their supporters to use their preference votes in the manner associated with AV, they did so decreasingly. For example, the Greens urged their voters to exercise all preference votes, and to exercise their second preference in support of Labor, but very large numbers—46 per cent—of those who gave their first preference to the Greens did not do so; they made no other choice. We have seen the same effect in the London mayoral elections, where there is a modified version of AV in the supplementary vote system. A significant percentage—perhaps one in five voters—vote for only one candidate.

I am not a supporter of AV, but if the proponents of AV want to see the benefits that they profess that AV would confer, I suggest that they would do better to have the proper AV system—the obligatory preference system—rather than the one that is being proposed in this Bill. If we have only optional preference voting under AV in this country, it will rapidly turn into a pretty close replica of the first past the post system. People will scratch their heads and ask why on earth they have been through all this palaver, why we have had a referendum, and why—if they did so—they have voted for an alternative vote system that turns out to be remarkably similar to the first past the post system that they have rejected. This needs very careful thought, and it is not too late for the Government to give it that thought. I beg to move.

[Lord Wallace of Tankerness]

My Lords, the amendment moved by the noble Lord, Lord Howarth of Newport, would provide that, under the alternative vote system, voters would be required to express a preference for every candidate standing at the election. As he indicated in moving his amendment, we had some debate on a related issue earlier in the evening. In the Bill as drafted, by contrast, voters may express a preference for as few or as many candidates as they wish—indeed, as the noble Lord, Lord Foulkes, observed, even just for one. We believe that this approach gives maximum choice to voters. We would not support a system where voters were required to express preferences for all the candidates standing at the election.

In Committee, my noble friend the Leader of the House explained that the Government believe that the optional preferential form of the alternative vote system is the right form of AV to be put before the people. There is a genuine issue here and a genuine debate, but we believe that for elections to the other place, if voters are to be able to express preferences, it is only right that they should be able to express as many or as few preferences as they choose; their ability to limit their preferences should not be constrained in the way that the noble Lord suggests.

Furthermore, the optional preferential form of the alternative vote avoids putting voters in the position where they are obliged to vote positively and to give a preference for political parties that may be wholly distasteful to them, such as those on the extremes of politics. Indeed, it is not impossible that people might be dissuaded from casting a vote at all if they felt that they had to go to the ballot box and put a number beside a party that they found extremely abhorrent. That would be the opposite of what those who support the alternative vote would say is the aim of using it as the system for electing Members to the House of Commons.

The noble Lord, Lord Howarth, mentioned Australia. In those elections where a compulsory form of AV is used, voters must indicate an order of preference for every candidate on the ballot paper, as he described, in order for their vote to be valid at all. The noble Lord’s amendment does not specify what would happen if a voter did not express a preference for all candidates. Would that vote be declared invalid? It is not clear what would happen in those circumstances. There is a danger, of course, that it could risk disfranchising voters who did not wish to express a preference for all candidates standing at the election. Against that background, I urge the noble Lord to withdraw the amendment.

[Lord Rooker]

I am reluctant, but I cannot resist this, because of what happened in Committee. The noble and learned Lord has just deployed the case against the compulsory system and I agree with him on that, but is it the case that when the AV system in the Bill, the optional system, comes to be deployed, the Deputy Prime Minister will not be able to cite a single other democratic country where it is used to elect the national parliament—not one? Have I got that right? I have missed something in the debate otherwise. In other words, we are saying that it is better than the compulsory preference system, but nobody uses it to elect a national parliament. All the examples given tonight—and the provincial elections in Canada can be used as well—are for state parliaments and state Governments in Australia, not for the national Parliament. The national House in Australia, of course, has the compulsory preference system. This optional AV system is not used anywhere else in the world, but that is what is going to be offered to the British people. Have I got that right?

[Lord Wallace of Tankerness]

The simple answer is that I do not know and I would not want to confirm something that I do not know.

[Lord Campbell-Savours]

The answer is yes.

[Lord Wallace of Tankerness]

The noble Lord, Lord Campbell-Savours, says from a sedentary position that it is right. Be that as it may, the noble Lord, Lord Rooker, prefaced his remarks by saying that he did not support the compulsory system and preferred the optional preferential system. If we believe that that is a better system than the compulsory system, I think that that is what we should stick with. If it is the case that there is not another national legislature that does it, so be it—we are devising a system for the House of Commons.

[Lord Howarth of Newport]

My Lords, I think that it is clearly implicit in my amendments that, if people did not use all their preferences, their vote would be invalid, as is the case in federal elections in Australia. The noble and learned Lord rejects what I suggest; be it on his own head. If Ministers in the Government wish to make a botch of their attempt at electoral reform, so be it. I beg leave to withdraw the amendment.

Amendment 16B withdrawn.

Amendments 16C to 16H not moved.

Consideration on Report adjourned.

House adjourned at 10 pm.