Sanctions and Anti-Money Laundering Bill [HL]

Baroness Ludford Excerpts

2nd reading (Hansard): House of Lords
Wednesday 1st November 2017 Lords Chamber

[Baroness Ludford (LD)]

My Lords, I start by also welcoming the contribution to the debate of the noble Baroness, Lady Anelay, whom we much miss from the Front Bench. I am sorry that she is lost from the team of Ministers in DExEU, and, like the noble Lord, Lord Hain, I fear that the balance of opinion in the ministerial team in that department has tipped for the worse. I hope she can continue to have input into government policy and towards the achievement of a sensible one from the Back Benches.

This Bill is necessary but inevitably, because of Brexit, it is not as good as what we have at the moment. Within the EU we operate through the common foreign and security policy framework, which serves as a vehicle for the UK to multilateralise its own sanctions policy and benefit from the support of EU partners. It is an example of where we punch above our weight and multiply our power through EU membership, which enhances our overall influence in the foreign policy arena.

The Government say the purpose of the Bill is to continue to work effectively and consistently with our European and international partners to tackle the shared challenges in foreign policy and security. However, part of the Brexit narrative is that we need flexibility to be able to do things differently. There is an obvious tension here, and the Bill represents the conundrum that is there in Brexit as a whole.

The first example of tension could be about how this greater flexibility outside the EU is used—to what purpose and with what potential loss. There will be a loss of voice and influence for the UK and potentially a loss in terms of a weakening of the global effort against rogue states and other actors, because the EU sanctions regime might be less efficient or effective, or if the strength of our own is diminished because of pressures that it will come under.

Secondly, “taking back control” means an increased administrative and bureaucratic burden—having to create and run a UK-only regime and taking up the time and energy of legislators on this Bill. We are not seeing less red tape with Brexit, but more. Compliance costs will increase. Businesses and individuals benefit from having to deal with only one regime, with uniformity and consistency. An authorisation for an exception from sanctions obtained in one member state is valid EU-wide at present. There is also a lot of litigation. Currently this all goes through the Court of Justice of the European Union. In future it will land on our courts, and I am sure they are welcoming the extra work. The sheer costs and upheaval being created in order to liberate ourselves—in the words of some—from an organisation that, despite some flaws, works well is amply demonstrated by the Bill.

Thirdly, as my noble friend Lady Bowles has well described, there is a reduction in transparency and democracy as scrutiny and joint legislative power for MEPs are replaced by a governmental power grab way beyond the correcting power in the repeal Bill. There is no taking back control for Westminster.

Fourthly, the UK risks a serious loss of influence. Will we become like Norway, not in the room when decisions are taken but having to align ourselves with the EU? How will the UK retain a position of leadership as opposed to accepting that it can be only a loyal follower of EU sanctions or choose to weaken that solidarity by departing from them? How will we influence EU sanctions policy from outside the EU?

We do not yet have the benefit of the EU External Affairs Select Committee’s report on sanctions policy as the inquiry is still in progress, but we have been able to dip into some of the evidence. A witness from RUSI said:

“We still have the biggest financial lever in the European Union”—


in the form of the City of London—

“that the EU can use”.

So the collective weight of the EU is greatly strengthened by UK participation in the sections regime. This also includes the institutional capacity of the EU, to which seconded British experts significantly contribute.

Another feature brought out in evidence to that inquiry is that the UK contributes considerably to the backbone—one witness described it as “the lead in the pencil”—of EU sanctions policy. We have a very important position in the development and promulgation of EU sanctions. When or if we are separated from the EU, the ability of the EU and UK to pursue common foreign policy objectives through sanctions will be reduced. Indeed, our pull-out could weaken the resolve and political will of the EU as well as its ability, since we are one of the strongest advocates of sanctions.

We would put at risk the so-called consensus bias in the EU—the way in which it creates an intention and willingness to work together in support of sanctions regimes, even when certain member states are suffering economically. A good example is the way the EU has coped with Russia’s divide-and-rule policy. The EU has managed to withstand the pressure because of its common institutional architecture, within which no doubt there can be compensation in other policies for unhappy member states that are feeling the pinch from Russian pressures. If that EU architecture is fragmented by UK exit, the outcome becomes less predictable and more vulnerable to such pressures.

On the Bill itself, I am glad to see the “reasonable grounds to suspect” standard of proof adopted, in line with the recommendation in the report from the EU Justice Sub-Committee, on which I sit. There has been some criticism in the past of due process failings in the EU sanctions regime, although there has been improvement in recent years. I was going to ask the Minister if he could highlight ways in which the Bill corrects those failings but the noble Lord, Lord Pannick, has answered the question: he says there are no ways in which the Bill improves the EU procedures. Indeed, he highlighted that in both remedy and review the Bill creates a worse situation. Could the Minister at least assure us that the administration and enforcement of UK sanctions will be well-resourced? We have seen that other enforcement areas, such as the police and trading standards, which are well away from sanctions, have been considerably weakened by cost-cutting. Will the enforcement of sanctions be protected from that?

It is asserted by some that if we get greater control we can better tailor compliance regimes to suit the needs of UK business and other affected sectors. The Minister mentioned licences for humanitarian NGOs, but there might be less laudable beneficiaries. What happens if the City of London tells the Government that it would like to see less pain than it currently gets under EU sanctions? How will the Government ensure that there is not inappropriate deregulation? At present the EU acts as a shield for national Governments who are reluctant to defend and justify their own decisions. “It was terrible; we got outvoted,” they say, when you know jolly well that the decision was taken by consensus. The UK Government running its own sanctions regime will not have that pretext and will be more exposed to lobbying at the national level. Can the Minister give us some idea of how the Government intend to exercise their new-found autonomy and flexibility and reassure those of us worried that this could mean a laxer regime?

A senior Treasury official told the EU Committee inquiry:

“We have the ambition of reducing burdens on business where we can with any additional flexibility we may have once we exit the EU”.


What did that remark specifically envisage? It could mean sensible reform or it could mean an ominous weakening.

The UK must not become a haven for those escaping validly applied sanctions elsewhere through British deviation from an EU sanctions listing. Britain must not become a refuge for the corrupt, the criminal and the corporate villains—or at least, no more than, sadly, we are now. Will the Government surprise us by exhibiting a resolve to use its new-found freedom from the alleged Brussels straitjacket to tackle money laundering as well as tax evasion in the British overseas and dependent territories? Will they now commit to introducing that register of true owners of overseas companies currently able to purchase UK property anonymously? That was highlighted by the noble Lord, Lord Freeman. As Transparency International, whose figures were cited by the noble Lord, said,

“this bill is a timely opportunity for ministers to confirm their determination to deliver on this promise”,

of introducing that register. It went on:

“Without doing so, there is little prospect of ending the UK’s role as a safe haven for corrupt money”.

Israel and Palestine

Baroness Ludford Excerpts

Thursday 13th October 2016 Lords Chamber

[Baroness Ludford (LD)]

My Lords, I, too, thank the noble Lord, Lord Dykes, for introducing this debate. Next year’s centenary of the Balfour Declaration, in the preparation of which I applaud the Liberal role, gives an opportunity to celebrate the success of Israel as a homeland for the Jewish people and its huge achievements, as cited by the noble Lords, Lord Mitchell and Lord Sacks.

Recognition of the right of Israel to exist as such a homeland and in security must be the foundation of any peace process between Israel and the Palestinians. The noble Lord, Lord Dykes, asserted that Israel has all the security it needs. It does not, not at all, as others have noted. Of course, I am aware of the call to give unilateral recognition to a state of Palestine, irrespective of negotiations. But I believe that that would hit a brick wall and only direct negotiations between the parties can achieve a lasting two-state solution. Will the Minister tell us what representations Her Majesty’s Government have made recently to the Palestinian Authority to accept the Israeli Government’s offer of negotiations without preconditions? Does she see a helpful context in the warming relationship and security co-operation between Israel and a number of Arab states, especially Egypt and Jordan, with which economic co-operation is also advancing, as others have noted? Of course, this would have warmed the cockles of the heart of the late, lamented Shimon Peres.

The superiority of two states living peacefully side by side over the present situation is self-evident but it requires hard work with a mix of pressure and incentives on both sides, not instant solutions. It is not platitudinous to say that those direct negotiations are essential. I thought that the contribution of the noble Lord, Lord Trimble, was particularly valuable. Of course, he knows what he is talking about regarding the emotional hurdles to a peaceful settlement.

Other progress needs to be made on the ground to foster greater trust through an end to violence, murder and incitement to hatred—particularly, though not exclusively, Palestinian; an end to settlement construction and the obstruction of Palestinian development; and an end to the illicit arms build-up and militant activity in Gaza. But there are also all the educational and cultural exchanges that the noble Baroness, Lady Deech, and others mentioned. There is the medical collaboration just mentioned by the noble Lord, Lord Grade, and the economic collaborations described by the noble Lord, Lord Stone. In such a complicated situation, it is necessary to do all this kind of work to support the possibility of dialogue and negotiations. Boycotts are not only ineffective but absurd in a situation where we are trying to get people to work together. I was proud of the role that I was able to play as a Member of the European Parliament in securing an agreement between the EU and Israel on pharmaceutical trade.

I want to say a word about anti-Semitism masquerading as anti-Zionism. Too many of those who claim to be only anti-Zionist use it as a fig leaf for prejudice and bigotry towards Jews. It is frankly absurd to claim that it is impossible to criticise Israel or its Government’s actions without being accused of anti-Semitism. Tell that to the Members of the Knesset, who make PMQs in the other place look like a vicarage tea-party.

Lastly, I share the outrage of the noble Lord, Lord Sacks, at the decision by UNESCO to question any Jewish connection to the Temple Mount in Jerusalem. That this is unhelpful in the extreme goes without saying. For a UN body not to acknowledge the significance of the Temple Mount to Jews is beyond belief. What we need is all these measures of confidence and trust to support the possibility of negotiations, not the blunt instrument of measures such as boycotts.

EU: UK Settlement

Baroness Ludford Excerpts

Wednesday 8th June 2016 Lords Chamber

[Baroness Armstrong of Hill Top (Lab)]

My Lords—

[Baroness Ludford (LD)]

My Lords—

[The Lord Privy Seal (Baroness Stowell of Beeston) (Con)]

My Lords, I will sit down and see which of these noble Baronesses—

--- Later in debate ---

[Baroness Anelay of St Johns]

My Lords, I can confirm that. It has been made clear that the agreements reached by my right honourable friend take effect only if there is a vote to remain in the European Union in just a couple of weeks and one day. If the country decides that it prefers that the UK should leave the European Union, one then invokes Article 50 and we go through that process.

[Baroness Ludford]

Does the Minister agree that the February decision—

[Lord Spicer (Con)]

My Lords—

[Baroness Stowell of Beeston]

My Lords, I am sorry to have to get up again. I think it is the turn of the Lib Dem Benches, having not heard from them. Then we can come back to the Conservative Benches.

[Baroness Ludford]

Does the Minister agree that the February decision of the heads of state and government—not of the European Council—and indeed our future in the EU, has a degree of clarity and certainty which shines out, compared with the sketchy and shifting scenarios that we hear from the Brexiteers, whose model is based variously on Norway, Canada or Albania, depending on the speaker, the day or the hour?

[Baroness Anelay of St Johns]

My Lords, the noble Baroness is right to point to the fact that the deal is indeed in international law and therefore its terms are certain, and that, at the moment, those who wish to reject that deal have not set out the alternatives.

EU Foreign and Security Strategy (EUC Report)

Baroness Ludford Excerpts

Tuesday 7th June 2016 Lords Chamber

[Baroness Ludford (LD)]

My Lords, I hate to intrude on the love fest between the noble Lords, Lord Balfe and Lord Judd, but I very much agree with the former on British officials in EU institutions and with the latter that we are locked into the global community and cannot solve our problems by running away.

I, too, am very grateful to the External Affairs Sub-Committee and its outgoing chairman, the noble Lord, Lord Tugendhat, for a very interesting and useful report. I congratulate the noble Baroness, Lady Morris of Bolton, on taking over the chairmanship and look forward to future reports.

Like others, I start from the position that Brexit would weaken both Britain and the European Union and thus agree strongly with the paragraph in the report which states:

“The UK is an important player in international affairs, and the EU has the potential to enhance UK influence. A UK exit would significantly limit the UK’s international reach, not least by removing the UK’s influence over, and access to, the Commission’s instruments of foreign policy. It would also diminish the foreign policy of the EU”.

To borrow a phrase from the Prime Minister, Brexit would “put a bomb” underneath what Professor Richard Whitman, of Kent University and Chatham House, described as the,

“50 year-old strategy, pursued by successive British Governments, to structure its political and economic engagement with Europe through the politics, policies and institutions of the European Union”.

I emphasise: “through” the EU. Watching and trying to influence the EU from the outside would absorb a lot of the attention of the Foreign and Commonwealth Office, instead of using the EU framework as a springboard for and magnifier of our influence in tackling substantive neighbourhood and global problems. The noble and gallant Lord, Lord Stirrup, mentioned the effect of being on the outside.

My second opening thought is that the best platform the EU and its member states can create for making a success internationally is to be a success domestically, and in particular economically—reversing what the high representative, Mrs Mogherini, called the EU’s “declining economic dynamism”. As the noble and gallant Lord, Lord Stirrup, said, our foreign influence needs the restoration of our economic vigour. It is much harder to have a coherent and effective refugee and migration policy if it is contested at home by people who resent migrants as they see them taking their jobs. So let us create more jobs. It makes the EU less credible in negotiating trade deals if its market is not as enticing to potential trade partners as it could be.

I agree with the report’s recommendations that a large part of the EU’s focus should be on enlargement and the eastern neighbourhood. I share the regret that the review of the European neighbourhood policy has, apparently, not been co-ordinated with this exercise. I also agree that the EU needs to be clearer about what the end game is. We have seen in the referendum campaign the mischief that can be made out of the fact that Turkey is a “candidate country”. This has allowed Boris Johnson and Vote Leave to assert that “Turkey is joining the EU” when everyone, including Mr Johnson—who very recently expressed firm support for Turkish accession—knows that Turkey is not joining for a very long time, if at all.

On Russia, I have listened to various noble Lords who are far more expert than me and I find I agree with every one of them in turn. My conclusion is that, whatever the EU decides on its long-term policy, there must be agreement and coherence in its position. My noble friend Lord Oxford made a suggestion for a longer-term policy of engagement with Russia. I also agree with the noble Lord, Lord Judd, that we need to be realistic about what we are up against. I find a curious contrast between the UK taking a lead in the policy of sanctions—which is starting to be questioned by the German Foreign Minister—and our inexplicable absence from the process of the Minsk agreement. Perhaps the noble Baroness will explain why we were not involved in that process.

On Ukraine, I was a little surprised at the comment in the report that Russian opposition to the deep and comprehensive free trade agreement with Ukraine was,

“a salutary lesson on the need for caution in the use of these tools”.

Personally, I do not accept that Russia should have any kind of veto over an EU association agreement with Ukraine. Maybe the remark was more about the way it was handled on both the EU and Ukraine sides. Of course, extraordinarily we have recently had a Dutch referendum which rejected the Ukraine agreement. I have a feeling that they were voting not actually on the Ukraine agreement but just to give a kick to politicians and the EU.

I will spend some time on the comment:

“The EU is a weak military actor”.

Of course it is—I do not think that anyone ever sees it as a major purveyor of hard military power—but the important comment was that,

“EU-NATO co-operation was not functioning”.

During the referendum campaign we have heard the assertion that the EU is irrelevant to security. NATO leaders have countered that assertion by saying that the EU is an essential partner in delivering European security. The weakness is that member states are seen to be unable to underpin their own and EU foreign policy with an ability to use legitimate force, which undermines the EU, so the EU and NATO must “work together more effectively”.

We have heard ludicrous assertions about the creation of a European army, including a recent article in the Times by one of Boris Johnson’s successors in Brussels, but what the EU leaders are talking about is co-operation and co-ordination. That is made very clear in the conclusions of the Foreign Affairs Committee in May last year and the conclusions of the European Council in June last year. I rather liked the comment by Sir Robert Cooper, the former head of foreign policy at the European Council, that,

“while he was not in favour of a European army, he was in ‘favour of a European rifle’”,

and that the EU ought to do more to harmonise specifications and joint military procurement because there are huge inefficiencies, with outdated equipment and facilities that cannot be used in tandem.

There are also operational inefficiencies. The report stated:

“A NATO exercise to bring one brigade from Portugal to the Baltics took 21 days in order to facilitate all the customs and regulations and a further 10 days to find the trains to transport the tanks”.

Thanks to Twitter, during the debate I came across a new article in Foreign Affairs, the journal of the American Council on Foreign Relations, talking about how in some new member states,

“bridges and railroads are simply not suitable for large troop movements”,

and that getting permission for those movements for exercises is very frustrating. It calls for a military Schengen for NATO. Apparently, Poland requires 15 days’ notice to give clearance for troop movements. Presumably it would not do so if—God forbid—there was actually a war. But it seems to me that the EU can surely help by supporting NATO in the construction of the infrastructure and in trying to iron out the red tape. That is a good example of the possibility for convergence.

We also know that the European arms industry is very fragmented and subject to national procurement priorities and markets. Not so long ago we had the failure of the merger between Airbus and BAE. Each country wants its national champion but that does not bode well for obtaining best value for defence budgets and structuring our procurement and defence industry collaboration to deliver more efficiencies through joint capabilities.

The report rightly states that the EU has limited ability to act as a “global security provider” but it does have the ability to support NATO. Mrs Mogherini, in her response, also legitimately points out that the EU must take some responsibility for managing “global commons”, and particularly for delivering and supporting rules-based global governance. That is all part of security as well.

In finishing, I want to mention some things which the EU has as tools, including its values and its promotion of the European Convention on Human Rights in respect of Russia, even though that is obviously not an EU instrument. There are also all the anti-trust, trade development and humanitarian aid policies. I do not think that the report mentioned the US trade and investment partnership, TTIP, but it ought to be a priority for the European Union to stand up to some of the demonisation of that. Building our economy through science, research and innovation could also help restore Europe’s global influence. There are so many areas where European policies—not classic diplomatic policies—can strengthen the potential of the EU on the international stage.

I agree with the report that the high representative should be involved with ad hoc groups and it is disappointing that the Government do not agree. As the report brings out, even if the EU works through ad hoc groups, the key is to bring together the varied ways and means without being too tidy or precious about how it all works, as long as there is co-ordination and not contradiction. We are never going to have a very neat expression of the EU’s common foreign and security policy—but a lot can be done to make sure that it all pulls in the same direction.

EU: Turkish Membership

Baroness Ludford Excerpts

Wednesday 25th May 2016 Lords Chamber

[Baroness Anelay of St Johns]

The position remains exactly as I outlined in my Answer: we see the EU accession process as the most effective way to encourage reform, stability and democracy in Turkey. Turkey has to meet the EU norms—the rule of law, fundamental freedoms and competition rules—to be effective.

[Baroness Ludford (LD)]

My Lords, is it not the truth that the Brexiteers making an issue of the very distant prospect of Turkish accession is an example of their having lost the plot? They have lost the argument on the economy, are unable to portray a credible alternative to the EU—sorry, I forgot Mr Gove’s Albanian model—are fighting among themselves like rats in a sack, and are scapegoating and insulting all and sundry with abandon, including Turks. Should they not concentrate on trying to find some integrity for their campaign?

[Baroness Anelay of St Johns]

My Lords, the Government’s view is that we should put to the people of this country the positive and correct information about the benefits but also responsibilities of being a member of the EU. We believe that we are stronger, safer and better off in the EU. We have issued information about that. It is up to others how they interpret it—or, indeed, misinterpret it.

European Union: United Kingdom Membership

Baroness Ludford Excerpts

Monday 23rd May 2016 Lords Chamber

Asked by

[Baroness Ludford]

To ask Her Majesty’s Government what is their assessment of the reasons for the call by five previous Secretaries-General of NATO for the United Kingdom to remain a member of the European Union.

[The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)]

My Lords, national security is the first duty of any Government, and Europe helps us to make Britain safer. Leaving Europe is a threat to our economic and national security. NATO is the cornerstone of our security, but the EU is part of the West’s core security. Our NATO allies do not want us to leave the EU. Beyond NATO, there is no indication that any of our key partners want us to leave.

[Baroness Ludford (LD)]

My Lords, I thank the Minister for that reply. Is it not arrogant of the Brexiteers to substitute their view for that of our NATO friends, whose view is that the EU is a key partner for NATO, that Brexit would undermine NATO and give succour to the West’s enemies and that, at a time of such global instability, it would be very troubling if Britain ended its membership of the EU? Is it not the truth that any supporter of NATO must be a supporter of remain?

[Baroness Anelay of St Johns]

My Lords, of course, all noble Lords are able to take their own view on these matters; I like to go for information about the real, the how and the now. It is the case that the EU complements NATO’s high-intensity military activities with important long-term stabilisation and development work. I saw that at first hand on two separate visits I made last summer: one to Kosovo, where NATO is in position; and the other to Bosnia and Herzegovina, where I had the opportunity to meet the general in charge of the EUFOR Althea force and see the work which the EU can do which NATO does not and cannot.

NATO and the European Union

Baroness Ludford Excerpts

Monday 7th December 2015 Lords Chamber

[Baroness Ludford (LD)]

My Lords, I, too, thank my noble friend Lord Wallace of Saltaire for initiating this very timely and important debate. The European Council only had its first discussion on a common security and defence policy since the Lisbon treaty in December 2013—so only two years ago—but it had another fairly quickly, in June this year, when it vowed to keep security and defence policy regularly on its agenda. There are preparations under way to renew both the EU internal security strategy and the global strategy on foreign and security policy. It is clear that there is considerable overlap and convergence between those two: where does the fight against ISIS/Daesh as a terrorist organisation stop and that against it as a military threat start? European cyberdefence against organised criminal hacking networks shades into defence against cyberespionage and cyberwarfare conducted by states.

Indeed, the way that internal and external security are intertwined is shown by France invoking Article 47.2 of the Treaty on European Union on mutual assistance. It suffered a terrorist attack but the response is a mixture of intelligence policing and military capabilities. None of this means a European army, even if that aim has been supported fairly recently by the Commission President, Mr Juncker. Indeed, to quote Mrs Mogherini, the high representative, the convergence of internal and external security has,

“led to a renewed impetus in the EU-NATO relationship”.

She meets regularly with NATO Secretary-General Jens Stoltenberg.

European states are facing common threats. Europe needs a common response through the pooling of resources and equipment, joint procurement and interoperability so that EU and NATO capabilities and operations are increasingly integrated. The European Defence Agency is getting into its stride with a number of effective pooling and sharing projects, including pilot training, satellite communications, medical capability and air-to-air refuelling. I think that there was a Conservative pledge, possibly in the 2010 manifesto, to review UK membership of the European Defence Agency. Can the Minister confirm that that has been quietly shelved?

As my colleagues have mentioned, there are informal examples of co-operation through the French maritime patrols off the coast of Scotland, and indeed the UK offer of the use of RAF Akrotiri in Cyprus to France. It was most welcome that the strategic defence and security review vowed to further strengthen the UK-France defence and security relationship, and was perhaps a little unexpected. The plans include, as my noble friend mentioned, a combined joint expeditionary force of up to 10,000 personnel, collaboration on equipment, including the procurement and development of missiles, the exploitation of shared opportunities with the new aircraft carriers, and stronger links between the Army’s 16 Air Assault Brigade and its French counterpart. Obviously the joint working in Iraq and Syria against ISIS, although the subject of a particular vote, is part of that trend.

Mention is also made in the SDSR of the relationship with Germany. That makes sense as Germany seems to be emerging from its chrysalis on defence. Germany and Poland should take on more of the role in NATO territorial defence, leaving the UK and France, which are more willing to deploy forces outside Europe, to continue to fulfil a wider range of responsibilities.

All this is taking place against a background of historic weaknesses in terms of waste and duplication, and a reluctance to co-procure and specialise. That is for a variety of well-known reasons: loss of strategic autonomy and sensitivity of the defence sector, along with a reluctance to give up the strategic industrial base which is seen as a matter of national prestige. Then there is nervousness about specialisation, including whether others are going to pull their weight in funding. I think that we need to look at the dangers of free-riding.

While there has been considerable bilateral co-operation, there is no invoking of the facility for permanent, structured co-operation under Article 46 of the Treaty on European Union to develop “differentiated integration”, to use the EU phrase, among member states. Can the Minister tell us if there is any prospect of invoking this structured permanent co-operation so as to streamline the variety of initiatives taking place?

Finally, I shall quote Professor Malcolm Chalmers, the director of RUSI:

“Most of all, the UK needs to work to maintain and strengthen the partnerships on which its security and prosperity depends. The grand strategy which it adopted in the 1940s, anchored on a community of fate between the countries of Europe and North America, remains the right one for the country today. Those who argue for a return to nationalism, and for a fragmentation of European institutions, remain on the fringes of politics”.

I hope that that remains the case. Can the Minister elaborate on an intriguing mention in the SDSR of the formation of a cross-Whitehall joint Euro-Atlantic security policy unit, apparently to bring together diplomatic and defence expertise and foster EU and NATO co-ordination and co-operation? I would be interested to know how this encouraging initiative will work and whether personnel from our allies will be somehow associated with this unit.

European Union Referendum Bill

Baroness Ludford Excerpts

Tuesday 1st December 2015 Lords Chamber

[Lord Forsyth of Drumlean]

He has, indeed. If anyone wants to challenge that, I am very happy to give chapter and verse. Every single amendment that has been put forward has sought to improve the position of those who wish to stay in the European Union. Whichever side of the argument you are on, it is absolutely essential that, if we get a narrow result, people are able to say that it was a fair campaign and it was properly funded.

[Baroness Ludford (LD)]

Does the noble Lord accept that it is not about giving one side an advantage but about stopping the gaming of the system, which would prevent a fair exercise? That was the point made by the Minister in introducing her amendment, which I think is generally much welcomed.

[Lord Forsyth of Drumlean]

I am most grateful to the noble Baroness, who, with her great experience in the European Parliament, knows all about gaming the system. I am coming on to the point about gaming the system because we have already had examples. My friend and former colleague from the other place, Sir Eric Pickles, has already written to the Electoral Commission saying that the leave campaign should not be designated because it had upset the CBI at its conference and sought to expose that it was one-sided.

If we have those sorts of games being played, where people try to knock out one campaign in order to allow another campaign an advantage, that is gaming the system. This amendment makes it effective because it means that if people were able to persuade the Electoral Commission not to designate a campaign on one side, the other side would have considerable advantage, including even more expenses to spend on the campaign than are already provided in the Bill.

I am disappointed that my noble friend is not seeking to press his amendment. It is of course a matter for the House but I look forward to hearing from my noble friend the Minister how she believes it will be possible to deal with complaints if those who wish to stay win by a very narrow margin and people argue that it was an unfair campaign because one side was allowed to spend far more than the other.

--- Later in debate ---

[Baroness Anelay of St Johns]

My Lords, I shall also speak to Amendments 9 to 25 inclusive, which are all in my name. Government Amendments 4 and 9 to 25 relate to the reporting requirements that apply to donations received by, and loans and certain other transactions involving, permitted participants other than non-minor registered parties.

One of the reasons why there are so many amendments in this group is that the Bill, like legislation for previous referendums, deals separately with donations and loans. Therefore, Amendment 4—along with Amendments 16, 17 and 18—is minor and technical. These amendments make it clear that different paragraphs in the schedules may be commenced at different times. Amendments 9 and 15 are also minor and technical, and would ensure that there is no conflict between two provisions in the Bill about the reporting of donations and loans that apply and modify the Political Parties, Elections and Referendums Act for different purposes.

I now turn to Amendments 10, 11, 12, 13, 19, 21, 22 and 23, which are the main focus of this group. The Government have tabled these amendments as a result of an undertaking I gave on Report to the noble Lord, Lord Jay. The noble Lord had tabled an amendment, following discussion with the Electoral Commission, to address concerns that the rules in the Political Parties, Elections and Referendums Act 2000 requiring campaigners to return donations from ineligible sources applied only to permitted participants. At the time, I set out clearly why the Government could not accept the noble Lord’s amendment as drafted, and I will not rehearse those arguments now, as they are on the record from Report stage in some detail.

However, I noted that the Government had already taken steps to address the concerns identified by the noble Lord’s amendment. These are provided by the introduction of pre-poll reporting requirements in relation to loans and donations. These provisions require permitted participants to be transparent about the sources of their funding before the vote takes place. In these pre-poll reports, campaigners are also required to detail certain donations received and loans entered into before they become a permitted participant. I gave an undertaking on Report to consider whether the level of transparency provided as part of the pre-poll reports was adequate. On that basis, the noble Lord, Lord Jay, withdrew his amendment at that stage. The government amendments I have brought forward today represent the result of consideration and discussions with the noble Lord. We believe they will provide for greater transparency, but without imposing an unnecessary burden on campaigners.

Government Amendments 10, 11, 13, 19, 21 and 23 establish that the first pre-poll reporting period for donations and loans will begin on commencement of the relevant provisions and end after the first week of the referendum period. I note that the Electoral Commission supports all the amendments in this sub-group. The actual length of the referendum period is as yet uncertain, as noble Lords are aware, simply because we do not know the date of the referendum itself, but noble Lords will recall that we agreed earlier to an amendment stating that the referendum period should be at least 10 weeks. Setting the first period through this amendment enables the starting of the first pre-poll reporting period without waiting for the regulations setting the subsequent reporting periods to be made.

Government Amendments 12 and 22 make further progress by increasing the scope of donations and loans that need to be reported. The Electoral Commission supports these amendments too. Under the Bill as it stands, the pre-poll reports need to include only donations or loans for the purpose of meeting referendum expenses that are to be incurred during the referendum period. This would be difficult to apply in practice, especially if the referendum period has not yet been set—as it cannot be, because the negotiations have not yet concluded and we are not yet able to bring to the House a statutory instrument inviting the House to consider a date for the referendum.

These amendments will require the reporting of donations and loans that were for the purpose of meeting referendum expenses generally. This approach means that, once these provisions are commenced, if campaigners are receiving funding from foreign sources to help meet any referendum expenses, they will have to declare this before the referendum. The campaigning rules that will apply to the EU referendum do not expect people to anticipate that they may seek at some future stage to become registered as a permitted participant and return money they receive. This is clearly the fair approach to regulation.

However, the pre-poll reporting rules recognise that there is a risk that, in certain circumstances, a campaigner might delay registering as a permitted participant so that they can receive otherwise ineligible funding. The pre-poll reports therefore seek to shine the light of transparency on the sources of funding campaigners seek to use. Through government Amendments 12 and 22, we have therefore increased the scope of the pre-poll loan and donation reporting requirements. I hope the House will recognise that the additional transparency the amendments provide is indeed a benefit, and that the Government have delivered on the commitment I gave at Report. I am very grateful indeed to the noble Lord, Lord Jay, for his constructive amendment at Report and his engagement on this point. It has helped us to arrive at this outcome.

I now turn briefly to government Amendments 14, 20, 24 and 25, which are all minor and technical. Amendments 14, 20 and 24 will correct a cross-reference, insert an additional definition and set out more clearly how existing reporting requirements under PPERA will function when applied to this referendum. Finally, Amendment 25 clarifies that the pre-poll loan reports must cover third-party security arrangements, referred to in the Bill as connected transactions, as well as loans and other regulated transactions to which the committed participant is a party. I beg to move.

[Baroness Ludford]

My Lords, I rise with some hesitation, because this is not an area that I know much about. I find the briefing from the Electoral Commission slightly confusing. It is probably a bit unfair to ask the Minister whether I should be confused, but is she satisfied that the concerns expressed by the Electoral Commission have been fully addressed? Its briefing states that it supports the amendments, which will increase transparency of information, but it is not clear from the last two paragraphs of the briefing whether those concerns applied before Report and have now been cleared up by the new amendments today. The last sentence states that,

“in addition to these amendments we will use our guidance for referendum campaigners to strongly encourage them to only accept donations from permissible sources prior to registering with us”.

Is it the Minister’s understanding that that has been overtaken by events and that her amendments now fully satisfy the concern that some donations would escape the permissibility requirements and post-poll reporting obligations? Do her amendments close all those loopholes? I apologise for asking her to clear up my confusion, but I would none the less be grateful.

[Lord Wigley (PC)]

My Lords, I follow that intervention with regard to the position of the Electoral Commission. I understand from what the noble Baroness said that it agrees with the content of what the Government are doing. Is it also entirely happy with the timing implications? If I understand it correctly, the commission has said that, in practice, it needs a minimum of 16 weeks’ notice after the last regulations have been approved. Is there an implication in the Minister’s statement for that timescale? If that is the case, is the Electoral Commission relaxed that it can work within those implications on the overall timescale arising from the amendments?

European Union Referendum Bill

Baroness Ludford Excerpts

Monday 23rd November 2015 Lords Chamber

[Lord Lea of Crondall]

For once in his life, my noble friend may care to pay a little more attention to what I am about to say, and he may even be convinced by it. I think that there is scope for an inter-party agreement on the preparation of a statement of intent, as it were, between the two camps that neither will accuse the other, or even the Government, of bias, if not dishonesty, simply as a consequence of having conducted an insufficiently robust analysis of the distinction between the facts—the known knowns—and the unknowns. What I am saying may prove to be true or untrue, but on the percentage chance that it is true, can we follow up the worries of the noble Lord, Lord Hannay, about tsunamis by saying that they will be prevented only if we can avoid charges of bad faith when these reports are published? Therefore, the leaders of the two campaigns should swear an oath—as in ancient Rome, or some such—that they will accept that the assessment is dispassionate and that neither side will try to shoot the messenger, as and when these surveys are produced.

[Baroness Ludford (LD)]

My Lords, I back up what the noble Lord, Lord Hannay, said, with which I entirely agree. To make the noble Lord, Lord Pearson of Rannoch, happy, I should say that my receipt of a pension from the European Parliament is on my declaration of interests. As far as I know, I do not have to mention it every time we discuss the EU, as that would bore the House greatly.

I wish to amplify two of the points in Amendment 24C, in the name, principally, of the noble Lord, Lord Hannay. The Prime Minister said recently that the EU was essential—I cannot remember whether he said “essential”, but he at least meant that it was very important—to the UK’s national security. I think that is the first time he has made that very valid point. Therefore, it is important that the report the Government promise to publish in the very welcome amendment tabled by the noble Baroness, Lady Anelay, should cover the law enforcement, security and justice point because the public have a right to know what that consists of. For instance, the report should state that we are a full member of Europol and not stray into the domain covered by Amendment 25, in the name of the noble Lord, Lord Kerr, by implying that if we are not in the EU we will not be a full member of Europol, as Norway is not—it has a sort of observer status. The same applies to referring to Eurojust as a sort of club of prosecutors which makes sure that we catch, and can prosecute, these major criminals.

As the noble Lord, Lord Hannay, said, we have full membership of the European arrest warrant. We could even push for reform. I wish that Ministers, the Government and the Commission would take up the report that I wrote as one of my last acts in the European Parliament. This was about multilateral reform of the European arrest warrant. We could not do that simply as law takers outside the EU, even if we had some kind of other arrangement.

On proposed new paragraph (d) in Amendment 24C and the rights of UK citizens living in another country, a lot of work is being done here, to which the UK, being in the European Union, has a great deal to contribute. This work is about complementing the rights of free movement. We have maybe 2 million citizens living in the rest of the EU. We can take a leading part, with our strong civil as well as criminal legal traditions, in influencing the work on the mutual recognition of documents and of civil partnerships and marriages, including of course same-sex marriages, and on the rights that help our citizens in their daily lives in other EU countries.

It is important that our citizens understand the full implications of those EU measures, and the rights and obligations that arise under EU law enabling us to help defend our national security and ourselves against terrorism, to catch criminals and to help people taking advantage of free-movement rights through civil-law issues. I hope the Minister will say that the report will have some focus on these sectors of law enforcement, security and justice, including civil justice.

[Lord Hamilton of Epsom (Con)]

My Lords, I should like to speak to these three amendments.

My noble friend the Minister’s first amendment, Amendment 24A, makes the assumption that the Prime Minister will come back with a negotiated package from the EU. There is not a lot of evidence at the moment that that will happen. The Prime Minister has made it clear that if he cannot get any reforms of or agreement with the EU he will walk away. Is that offer no longer on the table? Are we now basically taking the position that, however hopeless the concessions that we get from the EU are, the Government will campaign to stay in whatever happens?

On Amendment 24B, I have many more concerns. It speaks of,

“information about rights, and obligations, that arise under European Union law as a result of the United Kingdom’s membership”.

This really encompasses a large part of UK citizens’ lives. Nick Clegg, from another place, said that 50% of our legislation originates in the EU. This is a very broad category, encompassing very many activities that happen in this country.

In proposed new subsection (1)(b) my noble friend’s amendment says,

“examples of countries that do not have membership of the European Union”.

Can she indicate which countries she will identify as being not part of the European Union, but which have a relationship with it? This is also an extremely broad category. Virtually every country in the world has some sort of relationship with the EU. I would be particularly interested to have a little bit more detail about the free-trade treaty between South Korea and the EU. My view has always been that if South Korea can have such a treaty, the United Kingdom can, too. I should like to know a lot more about that. Will we be told about it in this paper? In general terms, nobody can pretend that the information that will come out in the report suggested by Amendment 24B will be in any way impartial. But of course, when it comes to partiality, we have only to move on to Amendment 24C in the name of the noble Lord, Lord Hannay, to find a whole list of things that quite clearly the noble Lord thinks are going to give advantage to those people who want to stay in the EU.

European Union Referendum Bill

Baroness Ludford Excerpts

Monday 23rd November 2015 Lords Chamber

The Prime Minister has said that he wants to stay in the European Union and that he is going to do this fantastic negotiation that is going to change the European Union and reform it. It is ridiculous to ask him to go out and campaign for what he believes in and at the same time explain what he would do if he lost the argument. That is an impossible position to ask even of a very flexible Prime Minister.

[Baroness Ludford (LD)]

Will the noble Lord accept that the Prime Minister has also said that he would not rule out calling for a no vote if he does not get satisfaction in the negotiations? Therefore, what the amendment moved by the noble Lord, Lord Kerr, is calling for—that the Government set out what they envisage could happen in a scenario that the Prime Minister has not ruled out—is perfectly reasonable. What so shocks him to the core about that idea?

[Lord Forsyth of Drumlean]

I know that the Liberals find it easy to occupy two opposite positions at the same time on a number of occasions but we cannot ask the Prime Minister to do that. Subsection (2) of the new clause proposed by the amendment states that this has got to be done no later than 12 weeks prior to the appointment date of the referendum. I should like to think that 12 weeks before the referendum the Prime Minister will have decided whether he is going to rule anything out. The Prime Minister will have a position, so that point simply falls.

In Committee, I used the analogy of the European Union being like a bear trap. No one in Britain today would want to put their foot in the bear trap and join the European Union as it is. The question is how to get your leg out of the bear trap. People like the noble Lord, Lord Kerr, say that it is just going to be too painful to remove our legs from the bear trap and therefore we must just accept the risk that we might be bleeding to death but that is much less painful. In this amendment he has now come up with the proposition that because of Article 50 it is not just one bear trap: if you take your leg out of the bear trap there are 26 others to get through, each one of which could cause enormous grief, so it is better to stay in the one bear trap. This is a ridiculous position. I am deeply shocked that he should put forward an amendment of this kind.

Perhaps the Minister can tell us whether Ministers are going to be bound by collective responsibility in respect of the Government’s position. If they are, it is asking a lot of them that they not only have to stand up and support something in which they may not believe, but they have also got to go out and explain what would happen if the opposite happened.