Northern Ireland Protocol

Lord Adonis Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord True]

My Lords, I am afraid that I do not have that information for my noble friend. I did note that the Northern Ireland Executive’s collective response was not unfavourable, to put it gently. As for paramilitary activities and paramilitary smuggling, no doubt that remains a problem, but the Governments of the United Kingdom and the Republic of Ireland are united in wishing to stamp out such activities. The best way to do that is to continue to support the Good Friday agreement, and that is the fundamental objective of this Command Paper and the way forward that we have proposed.

[Lord Adonis (Lab)]

The Minister, speaking on behalf of Her Majesty’s Government, obviously chooses his words very carefully, and I took him earlier not to be ruling out there being an EU office in Belfast. Is that correct?

[Lord True]

I will have to read my words to understand how the noble Lord interpreted them in that way. Our position is that such an office is not necessary for the implementation of this agreement, and that remains our position.

Income Equality and Sustainability

Lord Adonis Excerpts

Wednesday 6th May 2020 Lords Chamber

[Lord Adonis (Lab)]

I strongly agree with everything that the noble Lord, Lord Young, has just said. The last Labour Government introduced one higher band in respect of council tax. The noble Lord’s pro1posal for another higher band and using the resources for social care should be taken forward.

I, too, join the tribute to the most reverend Primate the Archbishop of York. As a spiritual and a pastoral leader, he has touched the lives of many of us, and his international work has also been seminal. Most of us will never forget the way he took Mugabe to task—particularly Zimbabweans.

On the big issue of youth poverty that he has raised and what we do about it in the coronavirus crisis, I shall follow my noble friend Lord Boateng and make a few concrete suggestions. I shall just rattle through them almost like tweets as we have so little time.

First, as my noble friend said, we should revisit the two-child rule. This relates to families who are on benefits and it goes to the heart of poverty. It is completely unjustifiable, and it targets further poverty on the poor, which is the opposite of what we should be doing.

Secondly, everyone in the education world knows that there is a big crisis at the moment over the provision of free school meals, because the voucher system is not working and the meals are not being provided in schools. We need a quick and targeted fix for this. The best proposal I can come up with about what we should do immediately is to double child benefit—which is to some to extent targeted because it is taxed away for the better off—for the duration of the crisis so that families have the money they need for schools meals rather than complicated school meal vouchers.

Thirdly, we need to give people the right to repeat years in school, because a lot of young people are losing out on education at the moment.

Fourthly, we need to give people the right to do additional years of further education, because a lot of young people are going to be unemployed or will not get the results they need. That should be tied into an urgent review of apprenticeships and the right of people to study in FE if they cannot get apprenticeships because the numbers are falling.

Finally, on university fees, it is clearly unconscionable that students should have to pay fees for substandard courses from this October. The Government should have either a reduced fee or no fee for next year.

Budget Statement

Lord Adonis Excerpts

Wednesday 18th March 2020 Lords Chamber

[Lord Adonis (Lab)]

My Lords, it is a great privilege to follow the noble Lord, Lord Skidelsky, the biographer of John Maynard Keynes. It appears that we are all Keynesians once again. As the most reverend Primate put it, it is now “us” and “we”, in place of “I” and “me”. But I am not sure that Keynes himself would have been overly impressed with the position we are in at the moment. In his last speech in the House of Lords, in 1945, he said that

“everyone talks about international co-operation, but how little of pride, of temper or of habit anyone is willing to contribute to it when it comes down to brass tacks.”—[Official Report, 18/12/1945; col. 777.]

That is exactly the position we are in now.

I was particularly impressed by the speech of the noble Lord, Lord O’ Neill, who laid out the big agenda that we need to follow. We need precisely the international co-operation that Keynes was talking about in 1945, and which he did so much to foster in his own age in respect of Breton Woods and Anglo-American co-operation. We need that in this crisis. Ideas of the kind that he put forward, including the people’s QE, are very timely and need to be taken forward as a matter of great urgency.

I was especially impressed that the noble Lord, Lord Lamont, who I do not always agree with on matters of politics and ideology, rowed in strongly behind that. At the moment, we face a massive demand shock and a massive supply shock, and we need to address them directly and immediately. That is true not least because dealing with the pandemic itself involves—as the noble Lord, Lord Lamont, rightly said—giving people reassurance, not just about their medium and long-term future but that they can go off sick tomorrow when they develop coronavirus symptoms, without thinking that their livelihood, and potentially their job, is at stake.

The situation is very serious. The absence of international co-operation and exchange is a huge challenge. I hope that the Minister, who we hold in high regard, will take these ideas back to the Treasury and the Cabinet Office and see that they are acted on immediately.

Martin Wolf, in today’s FT, in a very Keynesian article, said that we need to:

“Think big. Act now. Together.”


Thinking big, acting now and doing it together must be addressed through two particular priorities: sustaining people through this crisis and sustaining businesses through this crisis. On sustaining people, I do not want to go through the specific points that have been made so far, but I want to direct a few additional questions to the Minister.

The first question is about provisions in respect of sick pay. The Minister will have picked up that there is huge dissatisfaction about this, concerning the gig economy and the self-employed, and the fact that sick pay is only £94.25 a week. That people on high or moderate established incomes are expected to go down to £94 in one go will be a big disincentive to people to declare themselves sick and self-isolate.

The biggest outgoing that people have is of course accommodation costs. It is not acceptable that we are still in a state of great confusion about this. The Chancellor, in his statement last night, announced that there would be a mortgage holiday of three months for those who are suffering from coronavirus. That is good, but we still do not know what the position is in respect of renters. We are told that people will not be evicted, which is a big step forward, but will there be a rent holiday similar to the proposed mortgage holiday? The Minister needs to tell us that at the end of the debate.

The other crucial point is the big injection of loans and potentially straightforward subsidies that has been put into maintaining businesses. The first big question is whether the right approach is for this £330 billion to take the form of loans, or whether some of it should be turned into straight grants. The fiscal stimulus that has been referred to crucially depends upon whether the state is expecting these loans to be repaid. The confidence with which companies will take them up depends upon the same thing.

The noble Lord, Lord Lamont, raised an extremely pertinent point. The reason for giving loans or grants to companies is twofold: to sustain businesses but also, crucially, to sustain employment. He is absolutely right to say that, if the state is going to make a big investment in businesses up and down the country to keep them going—as it should in this crisis—part of the deal should be that they maintain their employees. There should be a straightforward contractual agreement between the Treasury—or the banks, or whoever the Treasury will channel money through to directly make these loans—and all recipients that, for the duration of the coronavirus crisis, they will not make anybody redundant or in any way reduce people’s terms and conditions. That seems to be a straightforward and very basic point, and it goes a long way to providing the kind of people’s QE that the noble Lord, Lord O’Neill, referred to. I would be grateful if the Minister responded to that, explained the Government’s thinking and said whether he can see any issues arising.

Next week we have coming before us the legislation, which I am told is of doorstep proportions, and we will want to address a lot of issues in it. The security of workers—which is absolutely crucial to the long-term health of the economy but also in the short term in dealing with the pandemic—will be vital.

Finally, as we come out of this crisis—and we will—we need to come out of it as strongly as we possibly can, which means giving the strongest possible incentives to reviving trade and international confidence. Yet what is the first thing the Government intend to do after we come out of the coronavirus crisis? To push us into a hard Brexit. I cannot think of anything more ill judged than to move from one massive shock to the national economy to another. I know the Government are saying at the moment that they will not change the timetable and all that. Everyone who speaks to anyone in Whitehall knows that preparations are being made for it, not least because at the moment it is not even possible to conduct the negotiations on the terms of our trade and economic relations with the EU after the end of the year. I do not expect the Minister—who would lose his job immediately if he indicated any flexibility on this—to give us any indication of what he really thinks on this, but he needs to hear the views of the House. I think most Members would regard it as absolutely absurd for us to move from the depths of one crisis to a massive self-inflicted crisis immediately afterwards. We should put Brexit on hold after this crisis. As John Maynard Keynes famously said:

“When the facts change, I change my mind. What do you do, sir?”

--- Later in debate ---

[Lord Agnew of Oulton]

That is excellent news. I do not want anyone to think that I am not in favour of it. We as a country have an enormous opportunity to lead the green energy revolution.

I was grateful for the calm comments of the noble Lord, Lord Brooke, and some profound questions about the value of growth itself. The problem is that growth is really the only way to improve the quality of lives of most of our population; the only other way is probably productivity. There is no doubt that this will give us the opportunity to reflect on such things as international supply chains, which have perhaps got too wide and impersonal over the last 30 years. These are the sort of moments when we should reflect on that. He asked specifically about the RPI link on the fuel escalator. The Government are nervous about putting up fuel prices because it is a very regressive tax and hits the less well-off hardest. There is a sensitivity to that; I am sure that it will be kept under review.

The noble Lord, Lord Maude, urged us that the money that we spend should be spent well. My title is Minister for Efficiency so I guess it will land on my lap if we do not spend it well. As other noble Lords have said, the key thing is to get the money out as quickly as possible. He asked about insurance. I think I have something on that which can give clarification. The Chancellor made clear in his Statement that for those businesses that have an appropriate policy that covers pandemics, the Government’s action is sufficient to allow businesses to make a claim against their insurance policy.

The noble Baroness, Lady Kramer, asked about the strength of the balance sheets for the insurance sector. It is worth remembering that they came through the 2008-10 crash very well, other than AIG, which was not really an insurance company. I would be cautiously optimistic at this stage. She seems to know about the financial sector; it has two layers above it: reinsurance and retrocession insurance above that. At this stage I would be reasonably confident but, again, this is a fast-moving picture.

The noble Lord, Lord Northbrook, if I heard him correctly, asked a question about the difference between the £451 billion and the £600 billion. The difference is depreciation; the net investment is the £451 billion. If he needs more information, he can by all means let me know. The noble Lord, Lord Judd, asked about a commitment for the charitable sector. I entirely agree that charities are often the hidden battalions helping some of the most vulnerable people. If he feels that they are not being given the focus that they should be, again, I hope he will let me know.

The noble Lord, Lord Livermore, asked about the distributional impact of the Budget. He claimed that the poorest came off worst but, in the spending round of 2019, we announced the fastest planned increase in day-to-day departmental spending for 15 years. Of course, it is those at the bottom of our society who benefit the most from our public services.

The noble Lord, Lord Stevenson, asked about the national infrastructure strategy. Yes, I am afraid it will be delayed. I do not know whether I am allowed to say this—it will definitely not happen now, anyway—but we were going to try to slot it in the middle, between last week’s Budget and the spending review, probably in July.

It is perhaps worth pointing out that, in the Budget, we put some more beef under the IPA—the Infrastructure and Projects Authority—which is the key organisation in ensuring that, we hope, a lot of the spending on infrastructure is done in a controlled and effective way. I think I am running out of time.

[Lord Adonis]

I want to ask the noble Lord something about the key issue raised by the noble Lord, Lord Lamont, and me. Could the £330 billion of coronavirus-related loans to keep companies going be made conditional on employment being maintained?

[Lord Agnew of Oulton]

That is an extremely good idea. I will certainly take it back to the Treasury, where we will investigate it.

Referendums

Lord Adonis Excerpts

Thursday 13th June 2019 Lords Chamber

[Lord Adonis (Lab)]

My Lords, unlike the noble Lord, Lord Norton, I am not against referendums in principle. If you look at different systems of democracy around the world, some are excellent with referendums, and some are excellent without them. Arguably, two of the best-governed countries in Europe are Germany and Switzerland. Germany has a ban on referendums in its federal constitution, while Switzerland has referendums as a part of its everyday democracy.

Switzerland is arguably the most successful of all European countries in terms of peace and prosperity. It has had 306 referendums over the 170 years and that has not been a problem. Reconciling the Government and the governed, and direct and representative democracy, is a constant issue in democracy and Switzerland wrestles with those issues. However, it has managed to do so successfully.

Therefore, in my view, the issue is not one of principle. As a country, we are moving towards a midway point between Germany and Switzerland. We are making referendums a normal part of the machinery for amending our constitution but not a part of our ordinary system of government, in the way that Switzerland has. That is a perfectly defensible proposition in principle. The issue on which I completely agree with the noble Lord, Lord Norton, and my noble friend Lord Soley is that we need to take stock, in light of experience, to ensure that this is done successfully.

The three key elements which need to be in place, and which we need to learn from the European referendum, are: first, that referendums must be on clear and viable propositions; secondly, that they must be regulated properly; and, thirdly, that you must have a competent Government to respond to the referendum and seek, as competently as possible, to find a way forward thereafter. We are in this elongated car crash in respect of the EU referendum because there was no clear and defined proposition on the table; the referendum was terribly regulated, indeed barely regulated at all; and we have had the most incompetent Government in post-war British history seeking to wrestle with the referendum result.

My strong advice to the Government is that they become competent, regulate referendums properly and put only viable propositions before the people. I know the Minister will agree with all three of those propositions.

House of Lords (Hereditary Peers) (Abolition of By-Elections) Bill [HL]

Lord Adonis Excerpts

Report stage (Hansard): House of Lords
Friday 15th March 2019 Lords Chamber

[Lord Strathclyde]

My Lords, I wholly accept that everyone thought that the hereditary Peer by-elections would never actually occur because they would kick in, if I may use that term, during only one Session after the subsequent general election that took place in 2001. The noble and learned Lord, Lord Irvine of Lairg, looked me in the eye when he made this agreement and said, “These things will never happen because we intend to come forward with proper reform early in the next Parliament”. I accepted that.

I say to the noble Lord, Lord Redesdale, that it is always entertaining to hear a Liberal Democrat talking about the disparity of numbers in this House: need I say more? Whether it was luck or a matter of fact, those figures for the hereditary Peers were set at the time and no one thought that they would continue. But they are set now and my point to the noble Lord, Lord Grocott, is that if you take away the hereditaries’ ability to remove themselves and put nothing else in place, that could create a long-term unfairness, which I will deal with in a moment.

Post 1999 we were promised a second-stage reform, but we are not there yet. The by-elections are a central reminder of that failure. As well as being a nod to the past, I think the new hereditary Peers are perfectly capable people and I know that the noble Lord, Lord Grocott, has been at pains to say that there is no personal attack on hereditary Peers or their heirs; these are much more principled objections. But if we are stuck with this halfway house, we must deal with some of these issues. For the noble Lord that means the by-elections, while for me it means an appointments commission set up on a statutory basis.

[Lord Adonis (Lab)]

I hope the noble Lord will forgive me. Would his statutory commission apply just to Cross-Bench Peers, as now, or does he see it applying to party Peers too? He will know that there was a big debate when the commission was set up on a non-statutory basis about whether it would apply party Peers. Indeed, there was a radical idea that the commission itself, rather than the party leaders, should nominate the party Peers. Has the noble Lord given any thought to this idea, because the scope of his commission is an important question?

--- Later in debate ---

[Lord Jones of Birmingham (CB)]

My Lords, I do not think I need to remind noble Lords that, at this moment, all over the nation, the political class is seen to have failed the country. If ever there was a time when noble Lords could make a stand for connecting more with the people, it is now. I assure noble Lords that, in pubs from Cradley Heath to West Bromwich, to Kings Heath in my home town, they talk of nothing but reform of the hereditary peerage system.

I fully support the noble Lord, Lord Grocott, in what he is trying to achieve. The time has come when, if we truly believe in making the political class that which I know this talented nation can provide for its people, this House must set an example. These amendments—every one of them—should be withdrawn, and after five days of debate over 240 words, we should push this through and stop the farce. We can then get on with not only running the country but reconnecting the political class with the people who have trusted us to look after them.

[Lord Adonis]

My Lords, I support the amendment of the noble Lord, Lord Strathclyde. It is not an irrelevant amendment and it does not distract from the purpose of the Bill. On the contrary, it is an essential accompaniment to the Bill if it is passed. If it is passed, this House becomes a wholly appointed House, and therefore the mode by which people are appointed to it is not a peripheral issue but one of central importance. I was extremely surprised to hear the noble Lord from the Liberal Democrat Benches, a party that is supposed to be committed to radical constitutional reform, going well beyond this Bill. He was not even prepared to support an acceptable process for people to be nominated to this House in the first place.

I understand the point from the noble Lord, Lord Jones; I would much rather we were not discussing this issue at all. I completely agree that we should be discussing the big issues facing the country, not the distraction that my noble friend Lord Grocott has imposed upon us day after day. However, since my noble friend has forced us to debate this issue, we should get it right. That is very important. The likelihood of having a wholly nominated House will be significantly reinforced by this Bill, because once it passes, you can wave goodbye to the prospect of any more fundamental reform of the House. Indeed, my noble friend does not want to see more fundamental reform of the House of Lords. He is patently honest about his intentions: he wants a nominated House in perpetuity and does not support an elected House. He has been extremely clear about that.

I support an elected House. I am with the noble Lord, Lord Strathclyde. We share a birthday; we have not had much else in common over the years, but we are united in House of Lords reform in our late 50s. It is very important that we do not imperil the urgent issue facing the country as far as parliamentary reform is concerned, which is connecting Parliament as a whole with the people far more effectively than we do at the moment.

Coming to the point made by the noble Lord, Lord Jones, the reason we are in the middle of the Brexit crisis gripping the country is in large part because Parliament has become so divorced from the people, particularly in the Midlands and the north of England, an area my noble friend Lord Grocott knows well. The sense of power being distant has become greater. The idea that a wholly nominated second Chamber will do anything to repair the connection between people and Parliament is farcical. Indeed, it may make it worse than the status quo, because it will put into abeyance any agenda for wider reform.

My noble friend Lord Campbell-Savours, for whom I have the greatest respect, said that we should declare interests. I declare an interest: I am a life Peer appointed to this place by Tony Blair. If my only concern was to remain here as long as possible, I should have a big interest in the passage of this Bill. I am 56 and I hope I have a reasonable lifespan; indeed, there is research by reputable medics which shows that membership of the House of Lords adds 15 years to your life on average—I cannot begin to think why. On that span, I may well be here in 40 years’ time, if this Bill passes, because there will be precious little chance of reform hereafter.

The agenda for House of Lords reform we should pursue is not tinkering changes about whether it is somehow superior to be nominated rather than hereditary. We are equally illegitimate on any democratic principle; let us be very clear about that. As an appointee of Tony Blair, I have no more legitimacy than the noble Lord, Lord Strathclyde, has as an appointee of Charles II—or however far back it goes. In this debate, there has been an air of superiority from life Peers, as against hereditary Peers, but we are equally illegitimate. The only justification for our being here is that this is the existing law of the land. It is a very unsatisfactory law. I was present and working at the heart of government when the reforms of 1999 passed. I can assure the House that it was very much a spatchcocked reform. Let me be completely frank that it was in part motivated by the desire of people my noble friend Lord Grocott not to have wider reform of the House. My noble friend has been anxious at every stage that there should not be a move towards elections and wider reform.

I have spent most of my career engaged in public service reform, infrastructure and now, alas, trying to stop Brexit. I have taken the view that House of Lords reform is not high on the list of either my priorities or, to be frank, the nation’s, but in this big Brexit crisis, where the whole issue of Parliament’s relationship with the people is at the centre, I do not believe it is now possible to duck this issue any further. I am entirely with the noble Lord, Lord Strathclyde: we need a much wider reform of this House. My view is that we need to move towards—

[Lord Grocott]

I know that my noble friend is a very keen tweeter. I have had the pleasure of reading one or two of his tweets, although I am not sure how I acquired them because I am not part of the system. For example, I think he is comparing our present situation to the one Britain faced in the spring of 1940. He is given to hyperbole, but as he tweets—and no doubt the wisdom he is expounding will be tweeted out to a large number of people as soon as he leaves the Chamber—could he please promise me that he will tweet the details of the amendment he will propose later and the arguments for allowing 40 million people to take part in the next hereditary Peer by-election? Will he also please give an estimate as to what the cost of that would be? Finally, could he explain to us how he thinks that would reconnect him with the public?

[Lord Adonis]

My Lords, let me be completely frank. If it is a choice between the next election to this House taking place with an electorate of—what is it?

[Lord Grocott]

Forty.

[Lord Adonis]

Or an election by 40 million of our fellow citizens of this country, I believe it should be the 40 million. I believe that they would support that in the pubs of Birmingham, too.

[Lord Rennard]

Does the noble Lord accept that the cost of the current system, which we are trying to abolish, is about £600, but the cost of his would be about £80 million?

[Lord Adonis]

My Lords, that is a completely absurd intervention from the Liberal Democrat Benches. Of course democracy comes with a cost. The question is whether we are prepared to meet it. That is the whole issue. Of course I recognise that my amendment is absurd, but this is the key point. We are talking about amendments that the noble Lord tells us have to be minor changes to the current Bill. It is less absurd than the status quo, which is that the only people who will have a say are these 40 hereditary Peers. It is significantly preferable that the people of the country should have a say.

What I wanted to do was move to a fully elected House in the Bill. I wanted to do what I think is actually Lib Dem policy. I was told by the clerks that was beyond the Long Title. That is why I tabled the amendment. The only amendment that was acceptable was one that would make the election of hereditary Peers subject to the whole electorate. I could not do the really radical thing that I wanted to do, which is to have the election of Members of this House by members of the public from among members of the public—a revolutionary idea, but one we should be implementing.

[Lord Forsyth of Drumlean]

The noble Lord has stolen my thunder by admitting that his amendment is absurd and part of an exercise to try to talk this legislation out, which is a disgrace. I wonder what Brenda from Bristol would think of his proposition that 40 million people should vote for the hereditaries.

[Lord Adonis]

I think Brenda from Bristol might be keen to take part in this election, because she currently has no say over any Member of this House. For the first time, Brenda from Bristol would have the opportunity to nominate and vote for somebody to sit alongside the noble Lord, Lord Forsyth. She would give thanks to the noble Lord, Lord Strathclyde, and to me for making it possible, because under the independent Appointments Commission that the noble Lord, Lord Strathclyde, is proposing, Brenda from Bristol might well be nominated, whereas she stands very little chance of Mrs May noticing her, which is the only way to get into this place at the moment.

[The Earl of Erroll]

If I may assist the noble Lord, funnily enough, a countrywide election could be handled online electronically. That would be quite an interesting prospect.

[Lord Adonis]

My Lords, the noble Earl is very much into these high-tech solutions. Being old-fashioned and believing that people vote by putting crosses on ballot papers, I do not necessarily go the full way with these revolutionary suggestions, but that might be possible.

I come back to the point about this issue being fundamental, not peripheral. I can tell your Lordships that this issue was considered when the reforms of 1999 were considered. I was in No. 10 when we considered it. The obvious vulnerability to which we were open when we removed the hereditary Peers was that we would be creating a wholly nominated House, and how could we justify the only source of nominations to that House being the Prime Minister? What we did was a classic English compromise. Remember that before the independent Appointments Commission came, the Cross-Benchers were nominated by the Prime Minister too. Let me tell your Lordships, if I may choose my words euphemistically, that the selection was not always uninfluenced by what line those nominees might take in your Lordships’ House on matters of state. Noble Lords might be scandalised by that idea—I can see scandal written on the face of the noble Lord, Lord Strathclyde—but I am afraid these considerations took place. That is why a compromise was reached whereby the independent Members would be appointed by the Appointments Commission, but it was too much for my then boss, Tony Blair, to agree that the party Members should be. There were very big debates about it, particularly about whether there should at least be a role for an independent commission in reviewing the bona fides of those nominated by the party leaders because, again, if I may choose my words euphemistically, sometimes—

[A noble Lord]

It does.

[Lord Adonis]

No, it does not; it is very important to understand what happens. At the moment a health check is undertaken, but not a judgment as to whether the nomination takes into account considerations of racial, ethnic, geographical or gender diversity, or whether that person is appropriate and has the qualities needed in Members of the House. We looked at this halfway house. It was ruled out because my then boss and the then leader of the Conservative Party did not want their control of nominations fettered in any way. Even reviewing the bona fides, in the sense of the health check, was an extremely difficult concession that was granted.

The reason for this was that the party leaders did not want to give up their control of nominations to this place. They did not want any formal process in place by which either their judgment might be challenged, or it might be possible for nominations to be made apart from by them, which is a real issue because—to choose my words delicately again—the leaders of parties almost always represent factions of parties. Let us be clear about it; that is what happens. When Tony Blair was nominating Members to this House—

Motion

Moved by

--- Later in debate ---

[Lord Cormack]

Surely my noble friend understands that, having had well over an hour on his amendment, it was time to move on. It was the general wish of the House to move on. His amendment was really without the scope of the Bill. It would be an admirable subject for a separate Bill and I would support it, but what we have seen today—I hope that my noble friend, having provoked me, will concede this—is a rather sophisticated filibuster to ensure that the Bill of the noble Lord, Lord Grocott, does not complete all the amendments. That is a disgrace, given the overwhelming support he has in your Lordships’ House.

[Lord Adonis]

My Lords, what we have seen today is a serious abuse of the procedures of the House by the noble Lord, Lord Cormack, to stifle debate on a matter of significant public moment. That is what we have seen. I never thought, having been in this House for 15 years now, that I would see this abuse of procedure in the House. The issue of how people are appointed to this House is not a side or minor issue, it is fundamental to the working of our Parliament. I congratulate the noble Lord, Lord Strathclyde, on putting this issue before the House and I completely agree with him that we should continue to raise these matters, because this squalid Bill that the noble Lord, Lord Grocott, has promoted to perpetuate a nominated House of Lords is fundamentally against the interests of the people.

[Lord Young of Cookham]

My Lords, I gently remind your Lordships that we are meant to be discussing Amendment 5, which is about Standing Orders and the replacement of vacancies among people excepted from Section 1.

--- Later in debate ---

[Lord Colgrain]

If the noble Lord, Lord Grocott, is successful in his Bill and the hereditary election process is terminated, so is this independence of thought, action and experience, to be replaced by an even greater proportion of life Peers who are ex-MPs, ex-MEPs and representatives of regional assemblies and county councils. The general public have had their fill of the body politic from the other House at the moment—some would say where lunatics are running the asylum—and would relish the chance to have a more catholic representation in your Lordships’ House.

Brexit has not endeared politics to Everyman. We should be mindful of the consequence of decreasing the number of unorthodox Peers who have a less political careerist disposition, and recall the adage, “Be careful what you wish for”.

[Lord Adonis]

My Lords, this is not a sensible amendment. We have one absurd system for electing hereditary Peers at the moment, which it is proposed be replaced by another. While I could not begin to justify the system of elections that takes place at the moment, I could no more justify the establishment of a commission to do it. The only justification for the status quo is that it is the status quo, and it is best to leave that until we do a radical reform of the House of Lords, which should of course end the election of hereditary Peers entirely.

There are a whole lot of problems in Amendment 32 and the construction of the commission which one could go into, but I am not sure that it is necessary. Rather, I make the point that the best thing to do—this is my fundamental objection to the Bill of my noble friend Lord Grocott—is nothing in respect of the existing House of Lords until there is a sufficient consensus or a Government who are capable of leading towards a radical reform of the Lords, which should fundamentally replace this House with an elected or federal second Chamber. To tinker with the precise way that hereditary Members of this House are appointed, whether it is by some absurd system of election, to be replaced by some equally absurd commission, seems entirely beside the point, playing the game of my noble friend Lord Grocott, which is to make tinkering changes to essentially preserve the status quo. I am not in favour of preserving the status quo—I want radical reform. The Brexit crisis we are going through at the moment and the huge public discontent in the country mean that we can no longer duck this issue of a fundamental reform of this House, and we should put paid to all these tinkering changes.

[Lord Strathclyde]

My Lords, I am grateful to my noble friend Lord Howard of Rising for reminding us of what happened in 1969 in the House of Commons and the argument that took place there that any change to your Lordships’ House would ultimately mean that it would demand more authority and be able to use its powers more vigorously. To some extent, this argument was made again, not nearly as effectively, during the passage of the House of Lords Act 1999, and proponents of the Act said, “No, it won’t happen”, including the noble Baroness, Lady Jay, who was then Leader of the House.

I wonder whether the House agrees that while initially that was the case, as the years have rolled by the House feels itself even more legitimate, being shorn of hereditary Peers. The automatic right of hereditary Peers to sit and vote in the House of Lords came to an end in 1989. I agree with what the noble Lord, Lord Adonis, said some time ago—that we are all equally legitimate or illegitimate in this House—but the 1999 Act changed something. Therefore, the Bill, proposed by the noble Lord, Lord Grocott, will also change things and allow people to take even greater authority than they would otherwise have done.

I agree with the noble Lord about the status quo. This is not a satisfactory place: I have argued that consistently over the past 20 years. I understand why my noble friends Lord Northbrook and Lord Trefgarne have proposed the amendment. They have tried to solve the conundrum expressed by the noble Lord, Lord Grocott, and find a different way to honour the promise made in 1999, which my noble friend Lord Elton spoke so eloquently about before he had to leave, and this is their solution.

I must say that I am not entirely convinced, but it is a good effort. To return to a previous debate, a proper statutory appointments commission could also look at questions such as party balance, age, interests and expertise, commitment to participate and regional distribution, which I think is increasingly important. Of course, if we had an elected House, we would have solved all those problems, because people would decide. It is therefore unfair to accuse my noble friends of trying to overcomplicate matters. The system we have at the moment is actually very simple and straightforward. It is not adequate or perfect in any way, but it is at least an attempt to try to solve the problem that the noble Lord, Lord Grocott, is trying to solve through his Bill.

--- Later in debate ---

[Lord Strathclyde]

As I understand the amendment, and I am not sure I entirely understand it, my noble friend is trying to co-operate with the idea in the Burns report to reduce the total number. I have not looked at implementation or at paragraphs 29, 35, 50 and 51 of the Burns report, but I think the notion is that once the House of Lords has been reduced to a certain figure, hereditary Peers should not be part of that figure. If they leave after 10 years, however, presumably they will be replaced. I wonder whether my noble friend thinks that will help the reduction.

Earlier in the debate, a view was taken that if the overall size of the House reduced, the portion of hereditary Peers would increase. I agree. However, it would still be a lower proportion of the House than when the elections first took place in 2000 because the size of the House has increased so much. I hope the noble Lord, Lord Grocott, will find that reassuring.

[Lord Adonis]

I have read this amendment twice, and I do not understand how it works. However, I shall address the big issue underlying it, which is the size of the House. Being today in the business of calling a spade a spade, I might as well carry on doing it because it is in my nature. This obsession with reducing the size of the House is entirely beside the point. If we are to have a large appointed House and its purpose is to function at least reasonably effectively and to keep its membership up to date, it is sensible to make new appointments. Choking off new appointments is basically a preservation activity by existing Members to see that the House is not increased in size by new Members, which would create a greater sense of illegitimacy because the number will be large. To be completely frank, that is not pursued out of any great constitutional principle. It is purely an act of preservation by existing life Peers who do not want to make this House look any more illegitimate than it does at the moment. The best thing to do is against the interests of the House in the short term because it would deprive us of new Members who might—how can I phrase this delicately?—be of an age where they would participate actively and fully in the work of the House, which some noble Lords tend not to as they—I probably ought not to pursue that line of argument because it will not be popular with some noble Lords.

The point is that the Burns report is being, and has been, used—it is the latest in-vogue thing in your Lordships’ House—to pretend that reform is being done while in fact no reform is being done. That idea is as old as the hills. In this House it is always important, to pursue a sense of legitimacy and progress, that some reform is sponsored. The noble Lord, Lord Cormack, has a special working group looking at very modest, tinkering reforms for this House so that he can pretend that he is in favour of progress, although, when he is present, he opposes substantial reforms.

[Lord Mancroft]

I think the noble Lord means that my noble friend Lord Cormack and his noble friends are preserving the status quo: the comfortable state of the House, which neither the noble Lord nor I approve of.

[Lord Adonis]

I entirely agree. In so far as I understand what the amendment of the noble Lord, Lord Northbrook, does, I would not make any concessions to the Burns commission. While the House of Lords exists in its current absurd state, it is clearly sensible that new Members be appointed to it, and, frankly, more younger Members would be a good thing, as that would bring the House more into contact with life outside.

What is being engaged in at the moment is displacement activity. The real issue is not whether this House has 600, 700 or 800 Members; it is whether it is appointed and hereditary, and therefore fundamentally illegitimate, or whether it is elected, either directly or, if we had a proper federal system, perhaps like the Bundesrat in Germany, indirectly, and therefore directly relates to the people and/or the devolved institutions of the country, which are themselves elected. All this displacement activity, talking about Burns, about removing the hereditary Peers, about by-elections and, if I may say so to the noble Lord, about hereditary Peers commissions—that was a new idea to me; the latest one today—or about all the other tokenistic reforms that are put forward, is entirely beside the point.

[Lord Northbrook]

Perhaps I may quickly explain to the noble Lord the intention behind my amendment. Originally it referred to a period of 15 years for the appointment of newly elected hereditary Peers so as to put them on a par with the recommendations of the Burns report. That was not accepted, so I reduced the period to 10 years. The amendment might need retabling at Third Reading. If the Burns report is implemented, by-elections will fall altogether.

[Lord Adonis]

I am very grateful to the noble Lord for explaining the amendment. I now understand it and will hold in my mind the complex formula that he has just set out. However, my fundamental point is that it does not matter one whit whether this House has 600, 700 or 800 Members; it will be equally legitimate or illegitimate, whatever your view on how many it should have. Those are still very large numbers. I think it will function more effectively with its existing remit if it has a larger number of Members. That will mean that we have a steady flow of new appointments to the House, rather than drying up the appointments. However, all that is fundamentally beside the point. The current House of Lords is illegitimate. It will be just as illegitimate as the existing House, and arguably more so, if it is wholly nominated. The right thing is not to do any tinkering—either of the sort proposed by my noble friend Lord Grocott or any other variant—but to set up a constitutional convention and get to grips with fundamental reform, which, in the context of Brexit and the governance crisis across the United Kingdom at the moment, is long overdue.

[Lord Grocott]

My Lords, as my noble friend Lord Adonis repeats his arguments on successive amendments, he is getting more and more fluent but that does not make him any more persuasive. As it is now 1.15 pm and we have been going for three hours, it is up to me to say a sentence about what has been happening here today for the benefit of a baffled public, should anyone have been watching.

We have had three days in Committee and a Second Reading, and the Bill has been going for a year and a half. On Report, we have now reached Amendment 13. We have 62 amendments to consider. We have made ridiculously slow progress due to quite deliberate tactics by less than half a dozen Members of this House, of which I am sad to say number one is my noble friend Lord Adonis. Another culprit—I am shocked rather than sad to say—has been the noble Lord, Lord Strathclyde. The number of amendments is almost entirely the responsibility of Messrs Caithness and Trefgarne—of course, they are noble Lords not Messrs. I know and assert that what has been happening is a clear abuse of the procedures of this House. I do not have to worry about that too much; Members must answer for themselves whether they have been abusing the procedures of the House. But the net result is that Bills with overwhelming support will not reach the statute book. It is a bad position for any assembly to be in, when half a dozen people can thwart the direct wishes of hundreds who have expressed themselves in sundry votes on this issue as well as numerous people who are not here.

--- Later in debate ---

[Lord Strathclyde]

That is a very kind thought from the noble Lord, but I do not represent Scotland or anyone in Scotland any more than he represents railway workers, train drivers, signalmen or anyone else involved in the transport industry. I hope my noble friend will withdraw this amendment and take it away.

[Lord Adonis]

My noble friend Lord Snape takes huge offence at that remark by the noble Lord, Lord Strathclyde. He represents in his person all the railway workers of the United Kingdom.

[Lord Snape]

If I may say so, none of them Members of this House, despite what the noble Lord, Lord Colgrain, said earlier.

Money Market Funds (Amendment) (EU Exit) Regulations 2019

Lord Adonis Excerpts

Monday 25th February 2019 Lords Chamber

[Baroness Kramer (LD)]

My Lords, like my colleagues on these Benches, I support this statutory instrument. It is necessary: to put it in technical terms, British investors in money market funds would be in a right pickle if we did not pass it, because, as the Minister has said, the domestic market is tiny.

However, I want to raise an issue which is repeated in many of the other statutory instruments before us. Paragraph 2.8 of the Explanatory Memorandum states:

“When the UK is no longer a member of the EU single market for financial services, it would not be appropriate for UK authorities to be obliged to share information or cooperate with the EU on a unilateral basis, with no guarantee of reciprocity”.


I understand the emotional tag behind all this, but there is a wise old saying which goes: “An eye for an eye and we all go blind”. The 2008 financial crash and many of the other problems that we have had have come through fragmentation of regulation and the lack of information transfer between regulators in different locations and countries. I really do not understand why we are not seeking to do everything in our power to make sure that information flows continue. A money market fund that is being regulated by the FCA under the new statute following any kind of no deal might well be in the same family as other such funds being marketed in the EU 27. Therefore, something that flags up an issue or concern with one may well reflect through to the other, because it could be core to the administration and deep within the overarching family. Will the Minister explain the consequences of putting up any kind of barrier to existing information transfer and what risks we might be taking on? I am exceedingly concerned about fragmentation.

[Lord Adonis (Lab)]

The noble Baroness had made an important point. We surely have an interest in giving unilateral assurances on transfer of information, because we have such a big interest in the health of our own financial services industry. Anything which ensures that dodgy practice is exposed and information exchanged in respect of it is in our interests, even if—by a complete failure of our negotiating capacity, which unfortunately the Government are guilty of the whole time at the moment—we do not get any reciprocal rights in respect of these transfers of information. The noble Baroness’s question is very well made.

I have a question about the impact assessment. On page 17, it says that the familiarisation costs in respect of this instrument are estimated at £340 per firm and that the total cost is £7,200. Do I deduce from that that only 21 firms are affected, or is there an error and it should really read £7.2 million or something? That seems to be a point of some importance.

[Lord Tunnicliffe (Lab)]

My Lords, I feel the need, once again, to express my repeated objection to being here. We are here to discuss no-deal statutory instruments: I believe the Government are being irresponsible in not ruling out a no-deal outcome. A no-deal outcome would be serious in every area of life, particularly in its economic impact and in its security impact. I also believe that it is possible that we may fall into a no-deal scenario by what could be described as “by accident”. Accordingly, I will continue with my duty of scrutinising the SIs. The problem with this is that, when you come in on a Monday morning and people ask if you enjoyed the weather yesterday, you have to say: “What weather?” There was no weather for me; I was busy studying these five SIs. What made that even more irritating is that I failed to find any serious problems with them.

I have to admire the noble Lord, Lord Sharkey, for delving into the instruments themselves. I always find that pretty close to impossible, because of their habit of amending previous SIs that amend previous SIs that amend previous Acts. I will listen to the Minister’s answer with interest. I also join the noble Baroness, Lady Kramer, in her concern at the tone of the Explanatory Memorandum on the matter of information. I know that the Minister will say that it is just turning it from an obligation to an option. I am sure that is what the words say, but I hope that if we get into the extraordinarily unfortunate situation of leaving with no deal, the appropriate regulatory authorities in the United Kingdom go out of their way to co-operate with regulators in the European Union. These SIs—this one and quite a number of the others—touch on the core issues which caused the 2008-09 crisis, and overall the SIs we are looking at are sensible in making these markets safer.

Brexit: Stability of the Union

Lord Adonis Excerpts

Thursday 17th January 2019 Lords Chamber

[Lord Adonis (Lab)]

My Lords, the House is pleased that the noble Lord, Lord Young of Cookham, is replying to this debate as it holds him in very high regard. The only surprising thing is that the noble Lord finds it possible to continue being a member of a Government who, in Brexit, are systematically destroying his own life’s work. If I may say so, he gives a whole new meaning to the phrase “semi-detached”. He appears to be attached to this Government in the way that the moon is attached to the sun, but we are none the less glad that he is speaking today. That is because he harks back to the days when Conservatives were indeed conservative and observed the dictum of Edmund Burke that:

“A state without the means of some change is without the means of its conservation”;


but his underlying belief was that it should be the minimum change necessary to preserve a state which, by a long process of organic formation, works pretty well.

In Great Britain—Ireland is entirely different—that is pretty much the way we have handled constitutional reform in this country since the Napoleonic wars, which finally ended Jacobitism and the threat to the Hanoverian settlements. But Brexit has brought an end to all that because for the first time in modern history, the Conservative Party has stopped being conservative and has in fact become a revolutionary party that is seeking to undermine the entire fabric of our existing constitutional settlement, with an impact that will go well beyond Brexit. As other noble Lords have said, it will probably threaten the union with Northern Ireland and possibly in due course the union with Scotland too. It is perfectly conceivable that if Brexit proceeds, England will be a single unitary state within the lifetime of many of us present in this Chamber. Of course, that would make sense philosophically because it is the expression of an extreme form of English nationalism that we have not seen in recent history.

The question that is preoccupying Parliament at large at the moment is how we can stop that process democratically. It looks to me as though that will take the form of a referendum, in which I hope very much that the British people, having seen the kind of Brexit on offer and the threat it poses to their way of life, will actually vote to remain in the European Union.

However, the underlying social pressures and tensions that have led to Brexit are partly to do with the inadequate aspects of our constitutional arrangements and the way they deal with political and social issues. They need reform, and a good Burkean would be paying serious and particular attention at the moment—as the noble Lord, Lord Lisvane, has done—to the big issue of the government of England. While we have had significant and beneficial reform in the government of Wales and Scotland and have brought an end to a virtual civil war within the United Kingdom in Northern Ireland—I pay huge tribute to John Major, Tony Blair and a generation of politicians in Ireland and Northern Ireland—the government of England has not undergone substantial reform of any kind since Redcliffe-Maud and the big reforms to county and local government in the early 1970s. It is not working well at all.

I will make three brief points on what I believe should happen. We need to reinforce substantially the devolution moves that have taken place in recent years. The single best reform to the government of England in the last 20 years was the creation of the mayoralty of London—a strong executive office with substantial devolution of funding and autonomous powers, accountable to an elected assembly—which has transformed the government of London. The quality of our public services in London, particularly our infrastructure and especially transport, have been changed for the better beyond all recognition because of the introduction of this very welcome measure of devolution. We need the same in all the city regions of England and in the wider regions, and it needs to be done on some kind of agreed basis. The noble Lord, Lord Wallace, referred to Yorkshire. There is at the moment a massive stand-off between the Government and local authorities and responsible leaders in Yorkshire, including the mayor of South Yorkshire, on this very issue. It needs to be resolved, city region by city region, with substantial devolution taking place.

Secondly, on finance, you cannot divorce devolution from money, in the way that you can never divorce government from money. The person who holds the budget is the person who wields the power. A good part of the reason why the settlements in Scotland, Wales, Northern Ireland and London have been so successful is the substantial devolution of funding. Ever since the settlement that replaced the poll tax with this extremely inadequate council tax, which now is pretty much inoperable as an effective property tax, there has not been an effective funding base for local government.

Thirdly, we need properly to codify this in a new federal constitution, which I think should involve a senate replacing the existing House of Lords. The noble Lord, Lord Lisvane, said that we suffer from imperial condescension. I do not believe that that is a complete explanation.

[Baroness Stedman-Scott]

Please could the noble Lord bring his remarks to a conclusion?

[Lord Adonis]

I am bringing them to a conclusion.

The Government in London also suffer from colonial complacency towards England, and we suffer from ideological idiocy in respect of Brexit. Both undermine the body politic and need reversing as a matter of urgency.

Constitutional Convention

Lord Adonis Excerpts

Thursday 13th December 2018 Lords Chamber

[Lord Adonis (Lab)]

My Lords, I strongly support the proposal of my noble friend Lord Foulkes for a constitutional convention. I am not instinctively in favour of royal commission-type arrangements. I tend to take the view of Harold Wilson that royal commissions take minutes and last years. However, on something as profound as major constitutional change—including the replacement of this House with a federal senate on the lines set out by the noble Lord, Lord Owen, of an equivalent to the Bundesrat, which I agree could be a model for the reform of this House and the wider reform of the United Kingdom—I do not think it will be possible to get to that kind of arrangement without a constitutional convention.

I pay tribute to my noble friend and the many others who made a success of the Scottish Constitutional Convention in the 1990s. This, without doubt, paved the way for the Scottish and Welsh devolution settlements and rescued us from the bitterly divisive and partisan state that the devolution debate had got into in the 1970s and 1980s. It created a consensus and, although it did not at the time include the Conservative Party, as my noble friend said, many Conservatives were sympathetic. Indeed, historically, the Conservative Party got to devolution in Scotland first with Alec Douglas-Home and his commission going back to the 1970s. It created a consensus which meant that the new Scottish Parliament arrangements bedded down quickly. So I am sympathetic to it.

I absolutely agree that the position of the Labour Party in opposition gives us a golden opportunity to take the lead while the Government obsess over Brexit. I believe that Brexit will no longer happen—that we will have a referendum and it will be ended. However, whether or not that is the case, we will have to move on to the reform of the constitution of the United Kingdom—not least because of the issues that Brexit has raised and which, to some extent, led to Brexit—because of the great sense of alienation in the Midlands and the north of England, which have not benefited from substantial devolution.

I wish to make two comments on the work of the convention and the form its proposals might take. My noble friend and others said that there has not been substantial devolution in England, but that is not true of London. The four great constitutional reforms affecting the United Kingdom which the Labour Government, of which we were proud to be members, carried through were the Northern Ireland Good Friday agreement, the National Assembly of Wales, the Parliament of Scotland and, crucially, the establishment of the Mayor and the Assembly for London. In their own way, all four of those reforms have been successful—not least the creation of the Mayor and the Assembly for London. The test of any institution is: if it did not exist, would you recreate it? If your Lordships’ House did not exist, I am not sure that anyone would recreate it, but I am absolutely sure that if there was not a Mayor of London, we would definitely seek to put one in place, together with accountability arrangements such as the Assembly. The other test of a machine is the work that it does. If one looks at what has been accomplished by the three Mayors of London since the office was established in 2000, it has been an outstanding success. I take a particular interest in infrastructure and I emphasise that the renovation of London’s transport infrastructure would not have taken place with anything like the degree of investment and efficiency if it were not for the Mayor of London.

Earlier at Question Time we debated the regrettable cost overruns of Crossrail. Crossrail will open and will represent a dramatic transformation of London’s public transport capacity, but it would not exist at all but for the Mayor of London. It is not just about the political authority of the mayor but also, crucially, the mayor’s tax-raising powers, including the ability to raise a supplementary business rate which two successive mayors, Ken Livingstone and Boris Johnson, persuaded the London business community to sign up to because they were so desperate to have a credible scheme for improving London’s public transport capacity. The mayor put forward a plan for which he managed to gain consent from the Labour Government and then the subsequent coalition Government. There was a strong belief on the part of the London business community that the project would be delivered that led to it being advanced. The same is true of the congestion charge in London, which would not conceivably have happened without a mayor, and the doubling of the rate of investment in London’s public transport.

I have always adopted the Chinese adage that R&D stands for “rob and duplicate”. We need to see that when you have institutions that work well, the job of effective policymakers is to rob and duplicate them. What we now need is arrangements such as those that apply in London with the mayor and the Assembly in all the major metropolitan parts of England. It is starting to happen with the metro mayors, but they have nothing like the power or the resources of the Mayor of London. The task I strongly encourage the Government to undertake, because they are sympathetic to business and have taken steps forward with mayoralties outside London, is to significantly enhance those mayors’ powers, including tax-raising powers, and their accountability arrangements. That can and should happen now. It should be a key part of what is happening in this thing called the northern powerhouse, which at the moment is largely vacuous. If that happened, it would provide the building blocks for the establishment of a federal second Chamber based in England on the major cities and city regions. You would then need to bring counties together with similar arrangements in those parts of England not covered.

I strongly welcome what my noble friend said. I note that there is a broad consensus across the House in support of his recommendations. It is not total because we have constitutional conservatives who essentially do not like any change and provide elegant reasons for why no change should happen, but the consensus seems to extend to most parts of the House and we need to build on that.

In conclusion, the noble Lord, Lord Owen, cited Churchill’s once radical views on reform of the House of Lords, which he described as,

“one-sided, hereditary, unpurged, unrepresentative, irresponsible, absentee”—

he was never given to understatement. He also said that to abuse the Government was,

“an inalienable right of every British citizen”.

That is certainly true, but we hold the Minister in very great esteem and we do not abuse him. We look forward to his constructive response to my noble friend’s proposal.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I congratulate the noble Lord, Lord Foulkes, on bringing forward this debate. It is obviously very timely and we all have strong opinions about it. It feels slightly odd to be following the noble Lord, Lord Adonis. I have a slight grudge against him because he is one of only two politicians to have blocked me on Twitter, the other being Donald Trump, the President of the United States.

[Lord Adonis]

My Lords, I would willingly unblock the noble Baroness. It must have been some particularly insulting remark she made in respect of me, but I am sure she regrets it and I regret blocking her.

[Baroness Jones of Moulsecoomb]

I am afraid that I cannot promise not to be insulting again; that is how Twitter works.

The noble Lord, Lord Higgins, was absolutely fascinating about all the issues that he has worked on. It means that I now know where to go with any complaints on those matters, so I hope that he will not be leaving us too soon.

At the moment we are in the awful throes of what to do about Brexit. Whether or not we leave the European Union, we have to grapple with something that other noble Lords have touched on: how to heal the divisions within our deeply divided country. Anger, frustration and mistrust is endemic in parts of society. We need a complete overhaul of the so-called British constitution, which could begin with a constitutional convention.

Many people were surprised and confused when proceedings in the other place on Monday night came to a halt because someone had picked up the Mace. A lot of foreigners were expressing their confusion on Twitter and wanted to know why it mattered. The explanation illustrates an incredibly important point, which is that the Mace represents the authority of the monarch. Parliament sits only under the authority of the monarch and when the Mace is removed, Parliament has no authority. I was deeply saddened to disagree so strongly with my friend the noble Lord, Lord Howarth of Newport. He, I and the noble Lord, Lord Grocott, have a little leaver block-sympathy going on on this side of the House, so I was sad to disagree with him. I do so because the British constitution is not a democracy in any sense of the word. We have a feudal monarchy with a few bits of democracy bolted on to it. It is difficult to identify a single development in the British constitution which has not been the result of a compromise between the ruling elite and some sort of opposing force that threatened its power. A little bit of power is ceded by the most powerful people in order to keep the greater amount of their power intact. Most of the rights and freedoms that exist in our country have come about through these little compromises. It has never been about doing the right thing for its own sake.

For example, we celebrate the Magna Carta as the “Great Charter of the Liberties”, but it was actually a very small step in reducing the power of the king. The English Bill of Rights was another deal where the rich men in Parliament obtained a guarantee of their rights and freedoms in exchange for granting the throne to William and Mary. The Representation of the People Act and the Parliament Acts have all been compromises that have allowed us to call ourselves a democracy when in truth we are not. Each of these developments has its unique historical and factual quirks, but the overall narrative is one of a power struggle resulting in a compromise to maintain as far as possible the status quo.

As another noble Lord has mentioned, almost every other country in the world has a written constitution. These have normally come about after some massive historical event such as a civil war or a revolution. We have never got to that stage. It means that we have something which is wholly unfit for a country that wants to call itself a 21st-century democracy.

Now we have Brexit. As has been said, in a sense it is a symptom of people feeling excluded and alienated by a system that was only ever devised to protect the rich—the ruling elite. The intense frustration directed at Brussels is made up of a sense that politics is something done to us, rather than something we are active participants in. This is just as true of our local, regional and national politics as it is at the EU level. The Green Party policy is very much about devolving power down to the most appropriate level. An example of that failing utterly is up in Lancashire, when the Government overruled every level of local government and imposed fracking on a community that did not want it. Democracy has failed utterly in that case because the Government were not the best part of our system to decide what to do.

Leaving the EU will not resolve that intense frustration and anger. People will feel just as disfranchised by our electoral system and our politicians. Equally, if the tide turns and we end up remaining in the EU, people will be just as frustrated because neither option on its own provides a viable way forward. I would therefore argue that a constitutional overhaul is the only solution. I have a lot of questions that I would like to put privately to the noble Lord, Lord Foulkes, about how he sees this going forward, and perhaps I will contribute in various ways. Organic change, as has been suggested, is simply not enough. There has to be an overhaul.

We in this House have tried to discuss changes that will make us more relevant. I brought forward a Bill on reforming the House of Lords to the point where it would be abolished completely. I almost did not get it through its First Reading because of the grumbles from all around the House. It did in fact get a Second Reading, and I will be tabling it again. I look forward to hearing from noble Lords who have said in this debate that they would like to see reform. Reform of this place is inevitable, and I look forward to their supporting the Bill when I bring it back.

I would also argue that first past the post has absolutely failed to supply strong and stable government in the way we have always supposed it would, so it is time to consider proportional representation. I have been elected under first past the post and under proportional representation. They are both perfectly valid ways of being a voice for people who would otherwise go unheard. I spent four years on Southwark Council as one of 63 councillors, which was very hard, and then I served for some years on the London Assembly combating Boris Johnson, which was much worse. The only way forward now is to rethink our democracy, and this convention would be a good way forward.

HS2

Lord Adonis Excerpts

Thursday 13th December 2018 Lords Chamber

[Lord Young of Cookham]

To answer the first part of the noble Baroness’s question: as I said in my original reply, we will publish updated cost estimates as part of the full business case in 2019. In the second part, she reinforced the bid for more resources to go into public transport in the north; that has been noted and will be taken up in the spending review.

[Lord Adonis (Lab)]

My Lords, on behalf of the whole House, I am sure, I say that we would welcome the Minister’s appointment as Secretary of State for Transport so that he can take some responsibility for these issues. He might be a great improvement on the current regime. In respect of HS2 and HS3, it is vital that we improve intercity connectivity between London, the Midlands and the north. It is also vital that we improve connectivity between the northern cities. We should not have to choose between them. Does the Minister agree that the right thing to do is to proceed with HS2 and HS3, and that if we were not having to spend £39 billion on Brexit we could do both very comfortably?

[Lord Young of Cookham]

My Lords, you do not see one Transport Secretary for a long time and then two come along at once. The noble Lord is right: HS2 will directly connect eight of the 10 largest cities in the country; it is about connectivity and capacity as much as about speed. He has reinforced the strong bid I have already heard for more resources to HS3 and other connectivity within the cities of the north. That bid will be taken forward as part of the spending review. The added weight that he has just given to it will, I am sure, cut a lot of ice in the Treasury.

Duchy of Cornwall Bill [HL]

Lord Adonis Excerpts

2nd reading (Hansard): House of Lords
Friday 26th October 2018 Lords Chamber

[Lord Berkeley (Lab)]

My Lords, I declare an interest: I live with my wife in the Isles of Scilly; she has lived there for over 40 years. I have been following royal transport costs for many years and make no secret of my opinion that some of the Royal Family’s transport costs have been justified and are seen to be frugal, but some are excessive, including a charter flight to Saudi Arabia for a funeral.

The point of the Duchy of Cornwall is clearly to provide an income for the heir to the throne. We can dispute how much is needed and whether the confused and non-transparent operation of the Duchy is justified to achieve this. As the Duchy has been telling us for many years, it is a private estate and private estates often provide income for their owners in a transparent and non-discriminatory manner. I note that this Bill requires the consent of both the Queen and the Duke of Cornwall. I question why the Duke of Cornwall: is there not a conflict of interest? I do not think we will get that far, but it is an interesting question to debate.

I think this is the fourth time I have put down this or a similar Bill. This is simpler than previous ones and seeks to concentrate on what I think are the most important issues to be addressed. I argue that because the Duchy now firmly says that it is in the private sector, it should be treated as such. I am also very grateful to Dr John Kirkhope, an eminent scholar and notary public who has spent years examining the Duchy issues and helped with the Bill and what I am going to say.

The trouble is, the Duchy sometimes chooses to be treated as a private estate and sometimes as a Crown body, which receives privileges and is largely unaccountable and silent on many issues. It is wrong that the Duchy should be able to choose its own status based on what is apparently the most financially advantageous option. It should be one or the other—and it has chosen the private option. My Bill is designed to put that option into effect, making it a private estate with no special privileges. I emphasise that the Bill is not about the Duke of Cornwall per se, apart from the first clause. I should also tell the House that a year or two ago, when I previously put forward a Bill, I had a meeting with Duchy officials. We went through all the clauses in that Bill, which was very similar to the Bill today, and, at the end, I asked if they agreed with what I had said and they replied “Yes, largely”. Then when I asked if they would say so in public they said, “No”. I wrote to them again before today asking if they would like to discuss this Bill and I did not get a reply. So there we are. We ought to compare what the Duchy of Cornwall does with what the Duchy of Lancaster and the Crown estates do, which are much more transparent and open.

Clause 1 is on the succession to the title “Duke of Cornwall”. We have debated this in the past and I could go on about it for a long time. The key thing is that it should be open to women as well as men; I am not quite sure whether they would be called the Duchess of Cornwall, but it does not matter that much. The point is that they should have the same privileges and rights as the Duke of Cornwall. After all, the Duke of Lancaster is always the sovereign, regardless of gender, so why should that not apply to the Duke of Cornwall? We can debate that, and I am sure that when the Minister replies he will go back to the royal charter of 1842, although it probably goes back to long before that. But I will not get into that now, because there are many important things that I need to put to the House.

Probably the most important issue is Crown immunity, which is addressed in Clause 2. To illustrate the lack of transparency, a friend of mine who has been trying to buy his house in the Isles of Scilly under the right to buy, and other colleagues, put in 64 freedom of information requests about the Duchy and the Crown immunity issue. I will give only one example. In August 2011, they asked the Ministry of Justice:

“Please provide any papers which explain the basis on which the Duchy of Cornwall enjoys Crown Immunity”.


At least the ministry answered it, but its answer was: “We do not hold any material which you request”. So how can they do it?

There are other examples in various Acts of Parliament which need to be considered. One is the Marine and Coastal Access Act 2009. It states that the provisions of the relevant part of the Act “bind the Crown”, which includes the Duchy of Cornwall, and that:

“No contravention by the Crown of any provision of this Part is to make the Crown criminally liable”.


The Data Protection Act gives the same information, and Section 14 of the Nuclear Explosions (Prohibition and Inspections) Act 1998, the Transport Act 2000, the Licensing Act 2003, the Planning and Compulsory Purchase Act 2004—I have nearly finished—and the Planning Act 2008 all contain the same exemptions.

Most people would find it odd that if the Duchy of Cornwall caused a nuclear explosion—which is highly unlikely—it would not be subject to criminal sanctions. Surely, it is a pretty remarkable state of affairs that an estate that asserts it is private is given exemptions from criminal sanctions under numerous Acts of Parliament, should it act in breach. I can go on about Crown immunity but I will not, because I would like to move on to tax.

We have debated in your Lordships’ House many times the issue of tax and the Duchy of Cornwall. The Duchy pays tax on a voluntary basis, but no other estate that I know of in this country does so. I do not know how many other noble Lords pay tax voluntarily—we would probably all like to—but the fact remains that the Duchy should be assessed and treated in the same way as any other estate or private individual.

Clause 4 addresses exemptions under the Leasehold Reform Act. As noble Lords will know, there is a consultation out on this at the moment. I have a friend who has been trying for many years to buy a property in St Mary’s on the Isles of Scilly, and he has completely failed. He has responded to the consultation and I hope he will be successful. This goes back to the issue that the Duchy of Cornwall is not bound by the Leasehold Reform Act because it has an exemption. You can understand the need for an exemption for London’s Royal Parks and other national parks and buildings, but some not very special houses on the Isles of Scilly—I am sure my friend would agree with that assessment—have this exemption and my friend is not allowed to buy his house. Whatever we think of the Leasehold Reform Act, the fact remains that everybody should be treated the same, but in this case they are not.

I think the Duchy will like Clause 5, as it would enable it to purchase land in the UK outside England. Why is there a restriction? I am told that it is a hangover from Victorian times, because of very different land and inheritance laws in Scotland at the time. Apparently, Balmoral was purchased in the name of Prince Albert because, despite the fact that Victoria was Queen, as a female she could not own land in Scotland. I am sure that many noble Lords will know more about this than I do, but that is what I am told. After the death of Prince Albert, the Crown Private Estates Act 1873 was passed to rectify the situation.

Clause 6, on the Stannaries Act, is a bit of a Cornish situation; not many people know about Cornwall’s stannaries. It is time to remove this Act because under it, the Duchy can appoint anyone to be a Duchy solicitor or barrister; they do not have to be legally qualified. That seems unnecessary. The Law Commission recommended that this provision be repealed, and I am told that the Crown lawyers, Farrer & Co, objected. They would, wouldn’t they? They would probably lose revenue if the cases ever came forward. That is another classic conflict of interest, but it is time to move that one on. The same applies to the Solicitors Act 1974.

The issue of the Treasury Solicitor is a serious one. The Duchy is a private estate. Which other private estate gets free legal advice of unlimited quantity—and, presumably, quite good quality—from the Government’s lawyers? I know several people who have had disputes with the Duchy. There was a case concerning the Helford river, which I think we have discussed before. A friend of mine won his case against the Duchy, probably because the Duchy’s representative said, “We believe we are above the law”, or something like that; but of course, when the Treasury Solicitor got involved he lost on appeal, which is no great surprise.

[Lord Adonis (Lab)]

My noble friend referred earlier to the tax position of the Duchy of Cornwall and the fact that it pays tax on a voluntary basis. My understanding is that the revenue surplus of the Duchy of Cornwall has increased by 50% in the last seven years and that its property asset base has increased from £630 million in 2011 to £940 million in 2018, which is a huge increase. Does my noble friend have the figures for what the increase in the voluntary tax paid by the Duchy of Cornwall has been in that seven years? I cannot find them. Has there been a 50% increase in the tax paid by the Duchy of Cornwall to the Treasury over that period? If my noble friend does not have the figures, it may be that the Minister, who is in full command of all the figures to do with the Duchy of Cornwall, could tell us.

[Lord Berkeley]

I am most grateful to my noble friend for that question. He will not be surprised that I do not have the answer to it. Of course, we are not talking only about income tax—it is about capital gains tax and everything else as well. We can do an FoI on it, but I suspect that it will take a long time, and that is part of the lack of transparency. I very much doubt that similar estates are subject to the same exemptions, so it is a very good question.

I think it is time that the apparent right to Crown immunity for this private estate, with the privileges that it seems to enjoy without any clear basis, came to an end, and my noble friend’s question is very germane to that. The Duchy asserts, as it is entitled to do, that it is a private estate, yet to avoid a suite of laws and because it would not be seemly for the Duchy to be seen in court, it has been granted taxation privileges and property rights and—a procedure that continues today, I think to the detriment of other taxpayers and also to some of the residents—has no parliamentary approval or judicial oversight. It is also free from criminal sanctions should it break the law—something that I think is just crazy.

Let us be quite clear: this is not the Duke but the Duchy of Cornwall. The Duke of Cornwall is completely different. Various Acts of Parliament relating to tax and many other matters in relation to this private estate have been “suspended”, as it has been called. I recall that the last time I managed to question the Chief Whip, he kindly said—I think it was before the Third Reading of a Bill—that the Queen and the Duke of Cornwall had kindly put their interests at the disposal of Parliament. When I asked why, it took about six weeks to get an answer. That was not the Chief Whip’s fault; the answer probably came from the palace, but it was completely meaningless. Therefore, we really need to bring all this into the 20th century and put the situation on to a clear and transparent footing.

Noble Lords ask me: what next? That is a fair question because I am sure that this Bill will not find its way on to the statute book in this Parliament. However, the Duke of Cornwall could decide to do much of what it seeks to do on a voluntary basis. I hope that he will read today’s debate and perhaps consider what he and his successors can do in the short term to put this matter on to a more transparent footing. I beg to move.

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[Lord Adonis]

My Lords, because of the great respect and loyalty that we have for Her Majesty the Queen and the Prince of Wales, we pay little attention to the royal finances and royal income, but I think it is time that we started to do so because the situation is very unsatisfactory and is becoming more so. I wish to make a few observations on my noble friend’s Bill, which, although it clearly will not pass, performs a great public service in bringing the issue of the Duchy of Cornwall and the wider royal finances to the attention of the House and giving us the opportunity to debate them.

The first point to make is that the position of both the Duchy of Cornwall and the Duchy of Lancaster is highly anomalous. The deal done in 1760, when George III came to the Throne, was that the Crown would surrender the Crown Estate, from which of course prior to that the monarchy had enjoyed the full income, in return for a settlement with Parliament on the royal finances. That situation continued until 2011 and the passing of the Sovereign Grant Act, to which I shall return in a moment, as it is crucial to understanding what has gone wrong with the royal finances in the last seven years. However, an equivalent deal was not done in respect of the Duchy of Cornwall and the Duchy of Lancaster, which clearly should have happened. There is no reason why a set of historical estates, which just happen to be a function of long history, should rest in the Crown, totally unrelated to the income requirements of the monarchy, and of course the heir to the Throne is part of the monarchy.

My noble friend referred to a lack of transparency. I agree that that is an issue, but a big issue also is the fact that there seems to be no relationship whatever between the income enjoyed by the Duke of Cornwall and the requirements of the office of the Duke of Cornwall for the income.

The noble Lord, Lord Wakeham, said that I was confusing capital and revenue. I was not. My analysis of the accounts of the Duchy of Cornwall found that both the capital and the revenue have increased substantially in recent years. The figures I gave in my intervention are striking. The capital base of the Duchy of Cornwall has increased from £630 million to £940 million in just the last seven years, and the revenue enjoyed by the Duke of Cornwall has increased by a similar proportion. My questions for the Minister are these. First, how does he justify this? Secondly, what contribution is being made in voluntary tax—and in my view it should not be voluntary; I see no reason at all why the Duchy of Cornwall should pay tax on a different basis from any other estate in the country—and what has happened to that tax revenue?

The other substantial income of the monarchy is the sovereign grant, which used to be called the Civil List. That situation appears to have become seriously out of sorts in the last seven years. In 2011, a peculiar deal was done between George Osborne, who was then Chancellor of the Exchequer, and the Keeper of the Privy Purse to end the previous system of the Civil List, which as I said went back to the 18th century, and to replace it instead with a formula whereby the monarchy would be funded by 15% of the net revenues from the Crown Estate. There was no basis for this formula, because of course the Crown Estate was no longer the Crown Estate in anything other than name—it is part of the ordinary income of the Treasury. It was done for effect more than anything, I think, to try to establish some connection and to put the royal finances substantially beyond the process of annual negotiation with the Treasury and with Parliament. These was no other basis at all for doing it. Indeed, when the Sovereign Grant Bill was debated in your Lordships’ House on 3 October 2011, the noble Lord, Lord Turnbull, who is deeply familiar with the royal finances, said that,

“the link with the Crown Estate … is pretty artificial as there is no relationship between the net income of the Crown Estate and the funding of the monarchy, and there has not been since 1760, when the hereditary revenues of the Crown Estate were first surrendered”.—[Official Report, 3/10/11; cols. 966-67.]

Leaving aside the formula, it is its impact that ought to be of concern to the House. When setting out the formula in 2011, George Osborne said that the effect would be to keep the income of the monarchy roughly stable. On 14 July 2011, he said in the House of Commons that,

“the important thing, is that the amount of money going from the public purse to the royal family will be broadly the same … We can have a debate about the mechanism”—

that is, the new sovereign grant mechanism—

“but the effect will be pretty much to continue through this Parliament with the sums that they were getting during the last one”.—[Official Report, Commons, 14/7/11; cols. 541-42.]

He went on to say that, because of efficiencies, there would be a 9% net reduction over the course of the last Parliament. That did not happen. On the contrary, the reverse happened: the baseline income that the Royal Family received in respect of the Civil List, which was £30 million in 2011, went up to £36 million in 2013, £39 million in 2014, £40 million in 2015, £42.8 million in 2016, and last year it was £76 million. The £42.8 million figure was a 38% increase in a settlement that was presented to Parliament as a steady-state settlement in a period which, I need hardly remind the House, was one of great austerity in the funding of other parts of the public service.

Far from improving, the situation got worse last year, because of the suddenly announced decision—which was not debated in your Lordships’ House at all—whereby the formula for the allocation of the Crown Estate to the funding of the monarchy was, overnight, increased from 15% to 25% to accommodate the refurbishment costs of Buckingham Palace. I could make a whole speech on the cost estimates and the refurbishment of Buckingham Palace, which have been subject to no parliamentary oversight whatever. The initial projection made to Parliament in a Select Committee appearance by the Keeper of the Privy Purse was that the refurbishment would cost about £150 million. The last figure on which the calculation of the increase from 15% to 25% took place was £368 million—a more than doubling in the cost. We think that the renewal and refurbishment—or whatever it is called—of the Palace of Westminster is out of control, but proportionately, what is going on in Buckingham Palace is far worse. But because we do not debate these issues and there is no relevant parliamentary committee or any oversight process whatever in respect of the royal finances, it is entirely shielded from public view.

The 25% figure is entirely arbitrary—it looks to me as if it was done on the back of an envelope, because it is a round figure. That 25% has already taken the allocation from the Crown Estate to the Royal Family from £30 million in 2011 to £76 million in 2018. The projection is that it could go up by £10 million, £20 million or £30 million in the next five to 10 years. It depends entirely on what happens to London property prices, which is where the bulk of the Crown Estate is. Although Brexit is having some effect on London property prices, noble Lords will be aware that they are pretty resilient.

The arrangement that was made in 2011 has become a one-way ratchet for a significant and extra-parliamentary increase in the revenues of the Crown. As if that is not enough, the arrangement under which this formula is calculated provides that there can be no diminution in the income going to the Crown. If that happens, under the Sovereign Grant Act the Exchequer will simply make up the difference. It provides also that the formula that set the 15% and then revised it to 25% is set by a committee of commissioners of the Crown: the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse. They are three very worthy people, and I admire them all, but no one can pretend that this is an open and accountable process subject to parliamentary control.

The Minister is always immensely well briefed when he appears before the House, and I hope he will be able to comment on what I have said, and provide us with the justification for the 15%, the 25% and what is happening to the tax paid in respect of the Duke of Cornwall.

My final comment is simply to quote the noble Lord, Lord Luce, who enjoys great confidence in the House as a former Lord Chamberlain, and who has performed great service to the state while in government and to the Royal Family. When the Sovereign Grant Bill was presented to the House on 3 October 2011, he said that,

“the monarchy must set an example of restraint and prudence in expenditure, especially in tough times”.—[Official Report, 3/10/11; col. 971.]

I completely agree. However, the exact reverse has happened and the situation is very unsatisfactory.

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[Lord Young of Cookham (Con)]

My Lords, I am grateful to the noble Lord, Lord Berkeley, for raising once again this important issue. He has brought these measures forward in a number of guises and is a true crusader for reform in this area. I thank all noble Lords for their valuable contributions to the debate, in particular my noble friend Lord Wakeham for putting the issue in a broader historical context and for explaining the basis of the current settlement. He also stressed the importance, a point underlined by the noble Baroness, Lady Hayter, of trying to seek a consensus before we make changes in this area.

Every day we say a prayer for the Prince of Wales, prospering him with all happiness. I am sure that nothing which has been said in this debate will go against the daily injunction we are given by the right reverend Prelates. The Duchy of Cornwall is an important institution. Since it was established in the 14th century, the Duchy’s main purpose has been to provide an income that is independent of the monarch for the heir apparent. The land, property and other assets of the Duchy and the proceeds of any disposal of assets are subject to the terms of a number of Acts, including the Duchy of Cornwall Management Acts 1863 to 1982, the combined effect of which is to place the Duchy’s assets in trust for the benefit of the present and future Dukes of Cornwall and to govern the use of the assets.

The current Prince of Wales chooses to use a substantial proportion of his income from the Duchy to meet the cost of his public and charitable work. The Duchy funds the public and private lives of five other adult members of the Royal Family—the Duchess of Cornwall, the Duke and Duchess of Cambridge and the Duke and Duchess of Sussex.

Turning to Clause 1, the noble Lord, Lord Berkeley, and others have raised the matter of the inheritance of the Duchy of Cornwall. The issue of gender equality is a priority for this Government and quite rightly the matter has been raised again today. Noble Lords are correct to say that at present the title can pass only to the eldest son and heir of the monarch. Thus, when the Queen was heir presumptive to the throne, she did not hold the title of Duke of Cornwall and the Duchy lands were vested in her father, the sovereign. The mode of descent specified by the Charter of 1337 is unusual and differs from that which commonly occurs in respect of hereditary titles. The monarch’s eldest son is automatically the Duke of Cornwall immediately he becomes the heir apparent. However, the manner of descent of the Duchy would preclude a grandson who is heir apparent from gaining the title of the Duke of Cornwall if he were heir to the sovereign because he is not the son of the monarch. With the Duchy of Cornwall we have a very unusual piece of English history that does not conform to the standard rules of descent for hereditary titles.

If we look back over recent years, there have been long stretches when there has been no eldest son to be the Duke of Cornwall, in which case the Duchy estate vests in the sovereign who oversees the affairs of the estate in lieu of a Duke. Viewed from today’s perspective, as opposed to that of the 14th century, I can understand why noble Lords have raised concerns about the descent of the Duchy of Cornwall, and indeed the Government have some sympathy with those concerns against the background of the changes made to the Succession to the Crown Act 2013 and other moves to increase equality. However, parliamentary time is currently scarce and noble Lords will agree that there are other more pressing priorities. Furthermore, given that currently there are three male heirs to the sovereign—Prince Charles, Prince William and Prince George—I do not believe that the time is right to dedicate parliamentary time to this matter when it is badly needed elsewhere. Indeed, the issue raised by the noble Baroness may not arise until the next century.

The noble Lord, Lord Marks, raised the more general issue of the succession of hereditary titles, on which I am sure a number of noble Lords have different views. However, they are not the subject of this particular legislation. Perhaps I may reassure the House that a female heir apparent will not find herself at a financial disadvantage because the Sovereign Grant Act 2011 broadly ensures that financial provision equal to the income from the Duchy is made for the heir apparent.

I turn now to the amendments on enfranchisement which are of particular interest to many in this House and to myself as a former housing Minister. The Leasehold Reform Act 1967 gives leaseholders the right to purchase a property from the landlord if certain circumstances are met. The Leasehold Reform, Housing and Urban Development Act 1993, which I put on the statute book, gives the tenants of flats in a building the right to collectively acquire the freehold of that building, again if certain conditions are met. The Act also provides the right for a tenant to extend the lease if certain conditions are met. Both Acts exempt the Duchy of Cornwall and other Crown lands from these provisions. This is because the capital raised from the Duchy cannot be distributed and is reinvested in the Duchy; the Duke of Cornwall receives funds only from the surplus. The general exemptions are important to protect land and property associated with the Crown and to ensure that the Duchy continues to perform its role for future Dukes.

However, I shall turn to what I think is the crucial point: Crown authorities have voluntarily committed, most recently in 2001, to abide by the same terms as private landlords in most circumstances. The Duchy has more than 600 residences, around 20% of which would be subject to these Acts had the Duchy not been exempted. The number of tenancies which the Duchy has sold or granted a lease extension to tenants under the terms of the enfranchisement Acts is around 120. There are some exceptions, as the noble Lord, Lord Berkeley, implied, including the historic Royal parks and palaces, property or areas which have a historic association with the Crown or where there are security considerations.

The Bill would represent a significant change to the legal status of the Duchy of Cornwall. There is a presumption that legislation does not bind Crown lands, including the Duchy of Cornwall. Removing Crown immunity for the Duchy of Cornwall could be problematic in the future. As the Duchy of Cornwall vests in the sovereign when there is no Duke of Cornwall, the sovereign has a residual personal interest in matters affecting the property of the Duchy of Cornwall. When vested in the sovereign, the Duchy of Cornwall would have a different legal status from other lands belonging to the Crown.

I turn to the tax status, again raised by a number of noble Lords. The Bill proposes that the Duchy of Cornwall will be liable to income tax and capital gains tax. Let me start by confirming the current arrangements. The Duchy enjoys Crown exemption and is not in any case a corporation within the charge to corporation tax. The Duke of Cornwall is not entitled to the proceeds or profits from the sales of the Duchy’s capital assets, which are retained in the Duchy to provide income for the Duke and future beneficiaries.

The Prince is liable to pay income tax and capital gains tax on any income and capital gains he may receive from other non-Duchy sources. In line with the Memorandum of Understanding on royal taxation, he pays income tax voluntarily on the surplus of the Duchy of Cornwall after deducting official expenditure, applying normal income tax rules and at the 45% rate. In his annual review, the Prince of Wales stated that he paid £4.85 million in the 2017-18 financial year, although this figure includes VAT, income tax and capital gains tax from non-Duchy sources. If employer’s national insurance contributions and council tax are included, the total tax paid increases to £5.3 million. Of course, the expenditure varies from year to year, as does the value of the surplus.

The tax status of the Duchy of Cornwall reflects that of the sovereign, who is also not legally liable to pay income tax, capital gains tax or inheritance tax because the relevant enactments do not apply to the Crown. The Queen also pays income tax and capital gains tax on a voluntary basis in line with the Memorandum of Understanding. Moreover, the unique nature of the Duchy of Cornwall means that, in order to produce a workable income tax and capital gains tax regime, deeming the Duchy as a settlement would not be sufficient. Further provisions would be necessary to ensure that the legislation would work effectively without unintended consequences.

In his speech, the noble Lord, Lord Adonis, focused mainly on the Sovereign Grant Act rather than the Bill before us. I will write to him in answer to some of the issues that he raised. In summing up, I again pay tribute to the noble Lord, Lord Berkeley, for pursuing this important matter.

[Lord Adonis]

What has happened to the tax paid by the Duchy of Cornwall in recent years? The Minister gave last year’s figure. Can he say how that figure has changed?

[Lord Young of Cookham]

I have the figures for only the past three years in my brief. I think that the noble Lord’s queries went further back than that, so I will write to him. I would just say that the Labour Party voted for the Sovereign Grant Act.