Office for Demographic Change Bill [HL]

Lord Hodgson of Astley Abbotts Excerpts

2nd reading
Friday 4th March 2022 Lords Chamber

Moved by

[Lord Hodgson of Astley Abbotts]

That the Bill be now read a second time.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, it may seem inappropriate, perhaps even in bad taste, to be discussing 20 to 25-year projections of our population when on the other side of Europe, a country’s cities are being reduced to rubble. The situation in Ukraine is fast-moving and this country must play its part both in providing shelter for those who have fled and, no less importantly, in assisting those who wish to return home to help restore their homeland to peaceful prosperity. Nothing I say in the next few minutes should be seen as in any way reducing our duty to help the people of Ukraine.

One of the downsides of a five-year electoral system is that complex issues that have consequences stretching into the future—what the insurance companies call “long tail” issues—tend to be avoided. Keynes was undoubtedly right when he said:

“In the long run we are all dead”,


but political death can come every five years. However, the general public are not foolish. They know when complicated decisions are being avoided, and each time Governments dodge these decisions, trust and confidence is marginally further reduced. This cannot be good for our democratic way of life.

That takes me to the Bill, for in few areas have the long-term concerns of the general public been so consistently overlooked by successive Governments as that of demographic or population change. Let me give just a couple of numbers. The last 25 years saw our population grow by 9.1 million to 67.1 million, made up of a mixture of natural increase and net migration. The most recent ONS projections suggest that the population will grow by just under another 4 million by 2045, and that annual population growth will remain not far below historic levels at just under 285,000 per annum. It is important to remember what this figure means: 285,000 per annum means an average daily increase of 780, or 5,500 per week. It means we are putting a large village—a small town—on to the map of the UK every week, 52 weeks a year; and, 4 million people is roughly one and a half cities the size of Manchester.

Raising these uncomfortable truths is dangerous, because one can variously be called a narrow-minded little Englander, an economic illiterate, a closet racist, a eugenicist or sometimes all four. But my concern is not about people’s race, colour or creed. It is not about seeking to shut the door to all new arrivals—we all recognise the cultural and economic dynamic that new arrivals bring—but it is about the scale of population increase. It is about the impact that scale will have on the country we leave to our children and grandchildren. And it is about the fact that the Government have no strategic plan to address the multifaceted challenges that population change inevitably brings.

Am I alone in my concern? Most certainly I am not. In connection with this Bill, I commissioned some polling by Focaldata. This revealed that 71% of the population are concerned about the impact of the forecast further population increases. In case Members of your Lordships’ House think this is a concern to the white British community only, I asked the polling company to focus on ethnic minority communities. The answer there was that 60% were similarly concerned.

Everyone needs to recognise that any demographic change—up or down—results in trade-offs. Over the next couple of minutes, I shall identify a few of the most important. Most people look at population growth through an economic prism of increasing our total national GDP. Of equal relevance is how this increase has been shared out. The truth is that, measured by median wages per head, the rapid population growth of the past 25 years does not appear to have benefited a large number of our fellow citizens. Another reason is to redress the current imbalance in the structure of our population, especially as regards the social care sector. Today’s young people are inevitably tomorrow’s old people, requiring yet more people to look after them, resulting in what David Attenborough has memorably called a population Ponzi scheme.

Meanwhile, these new people require homes, schools and hospitals. We live on average as 2.3 people per dwelling. A population which is growing, as it is, by 780 per day requires 339 new dwellings every day, 14 every hour, or one every four minutes, night and day. As Danny Dorling, Professor of Geography at the University of Oxford, has pointed out, we are concreting over our country at a faster rate than at any time in our history. Of course, we also need to remember Robert Kennedy’s famous phrase that GDP measures almost everything except that which makes life worth living. The trade-offs of population growth in environmental, ecological and societal terms are considerable.

Therefore, I argue that there is an urgent need to address this formidable range of issues and, no less importantly, at the same time reassure the general public that they are being addressed. One way to achieve this would be to create a new independent body to provide transparent, evidence-based, strategic commentary on this country’s demographic future. I call this body the office for demographic change, or ODC. I have used the design of the existing Office for Budget Responsibility as a model.

How would it work? Clause 2 of my Bill would require the Government to prepare annually a statement setting out their policies in relation to anticipated changes in the demography of the United Kingdom. Clause 1 establishes the ODC and imposes a series of duties on it. Clause 1(2) proposes duties to collect evidence about the impact of population change, in particular in relation to the Government’s own stated demographic objectives. Clause 1(4) specifies a number of assessments that the ODC is required to make, in particular on the ability of the country to comply with its existing treaty obligations, such as those relating to climate change. Clause 1(3) requires the ODC to report at least annually, with the reports being laid before Parliament for debate by both Houses, which is an important aspect of restoring public trust and confidence in this policy area. Clause 1(5) gives the ODC complete discretion as to how to perform these duties, provided that it is objective, transparent and impartial. Importantly, the same clause ensures that the ODC cannot consider the impact of any alternative policies: it is an analyst of the Government’s demographic policies, not a creator of them.

Let me pull together the threads of my argument. The United Kingdom is already a relatively crowded island. For example, it is three times as densely populated as France, and England will soon overtake the Netherlands as the most densely populated country in Europe. Crucially, nearly 60% of the inhabitants of this country believe it is already overcrowded. The Government now need to take positive steps to respond to this continuing high level of public concern.

I have not been able to see my noble friend’s speaking notes for his reply to this debate, but I very much hope that he will not say that all these issues are being addressed by the Migration Advisory Committee—they are not. The MAC, which is a perfectly fine body, looks at one issue only: the impact of migration on employment prospects and the consequent general impact on the economy. The MAC could, and should, usefully be subsumed into the new ODC, but in no way does the MAC address the wider environmental, ecological and social issues.

Creating an ODC would provide a means of bringing together and balancing the views of economists and business leaders; ecologists and environmentalists; and social scientists and local communities. It would represent an entirely fresh way of looking at our demographic future and the trade-offs which inevitably will be required. I do not pretend that this will be easy.

In his book The New World Order, Henry Kissinger wrote:

“To undertake a journey on a road never before traveled requires character and courage: character because the choice is not obvious; courage because the road will be lonely at first.”


I hope that the Government, and indeed the opposition parties, will on this occasion show the necessary character and courage. I beg to move.

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[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, I thank my noble friend for initiating this debate. Of course, as with the noble Lord opposite, I understand fully that he is not making any statement about the terrible events in Ukraine, which we all condemn and regard with the utmost horror. I might add, as a student over many decades of the history of the Orthodox Christian world, that I find it tragic to see the humane, literary culture of the great Russian nation being traduced by a tyrant and its history and faith being distorted and abused to justify this foul and impious war and the massacre of innocents.

Perhaps I ought to add another personal reflection and declare an interest as a vice-president of the LGA, although I have been retired from local government for some time now. As a long-time council leader, I know the importance of accurate demographic information. That is certainly an objective that we all share and that the country requires.

I also agree with everybody who has spoken—my noble friend Lady Neville-Rolfe put it very well—that long-term planning is important. I do not think that Governments of all shapes and sizes have been very good at this. I had the privilege of chairing a Select Committee of your Lordships’ House on intergenerational fairness, with the noble Baroness, Lady Greengross, as a colleague. I think it true to say that we found that things could be done better by all Governments, and in Whitehall, when it comes to looking forward.

I thank all noble Lords who have spoken today for their thoughtful contributions. As my noble friend’s Bill points out, in a sense, at the heart of good policy-making are the proper use of data and the production of statistics. Understanding the growth, change and distribution of the UK population and its impact is certainly important for immediate policy concerns, as in local government, and for planning for the future.

But—here I ask a similar question to the noble Lord, Lord Bassam—in our judgment the Office for National Statistics serves as a model the world over in its production of statistics. First and foremost, this includes the census programme, with data collected last year and due to be published later this year for Northern Ireland, England and Wales. Alongside this excellent piece of work, the ONS works to produce regular updates on population statistics and makes regular forecasts for demographic change alongside its annual population estimates. I know this to be an area of great focus for the current National Statistician and everyone working at the ONS.

Much of the work my noble friend is suggesting that this new office of demographic statistics might conduct is already catered for by the Office for National Statistics. I do not know whether he is suggesting taking this work away from its current home and putting it into a new body. If so, that would be needlessly disruptive, could be a source of duplication and is likely to incur unnecessary costs for the taxpayer.

As I acknowledged at the outset, we can always improve on how this data is used in decision-making. The Office for National Statistics is planning on running a master class on how using data can better inform decision-making for policymakers. I understand that it is also developing a session specifically on improving understanding of demographic data and its impact on policy-making. I hope it will make information on that available to your Lordships in due course.

On what the Government are already doing in this area, the Green Book commits policymakers to

“consider whether longer term structural changes may occur in the economy or society”,

which include demographic changes. As part of this, the OBR uses demographic statistics as part of its economic and fiscal forecasting, and both national and local government regularly use ONS population and household projections in long-term planning for health, social care, education and pensions.

On the broader point about how to think about demographic change, I submit to my noble friend that while most of the issues he raises are clearly of great significance, demographic change is only one factor in our policy responses. We certainly face challenges as a growing nation—most of those who spoke addressed this—but the idea that the only solution to this is to somehow fix our population to some concept of a manageable level is too pessimistic about what we can achieve through advances in technology and considered policy-making.

Like most of us, I was born into a nation much smaller in population than it is today. There have been challenges, about which many have spoken, but we have also seen great improvements and advancements in our way of life in our lifetime, and that is true for all parts of the nation and all sections of the population, despite the poverty and problems that existed and still exist in our nation today. The Government can always do more in terms of measuring the impact we have on the environment—I agree with those who have made this point—and how we best deliver for a changing country, but to view all this through the lens of demographic change is too simplistic and not what best serves the country.

However, in relation to immigration, the Government have clear commitments, not always recognised in your Lordships’ House. We have moved, as we promised in 2019, to overhaul our immigration system by ending the free movement of people into the United Kingdom, taking back control of our borders, introducing a points-based immigration system, welcoming in-demand workers and offering a range of new and bespoke visas, making it easier to attract and retain the best and brightest talent. But the question runs slightly wider than that.

The Office for Budget Responsibility, which my noble friend has aimed to emulate with this proposed office, has a clearly defined remit as to what it makes its forecasts on, and its oversight of policy areas is largely restricted to the fiscal domain. This office for demographic change would, however, reach far and wide across government policy, and while its assessments and forecasts might be of interest to policymakers, this type of analysis rightly belongs in various policy departments. It is important that they do that analysis—there I agree with my noble friend—but to have such a swathe of policies constantly under review by a government body that is charged with assessing policy through this one lens is not necessarily the most conducive to good policy-making. So while the Government of course welcome scrutiny of our policies and their impacts, we believe this is generally best done by Parliament and third-sector organisations, except in a limited number of cases.

I am sure my noble friend will continue to advise and reflect on these important policy issues and we will continue to listen keenly to what he and all other noble Lords who have spoken have to say on how we best go about addressing the important challenges that he raises, but it is not the Government’s preferred approach to set up new public bodies, nor do we think it is necessary in this case, so we cannot support setting up the organisation he proposes in the Bill. Despite a productive discussion today, to which I have listened carefully, the Government have reservations about the specific proposals put before us. Therefore I must ask that, as the Bill goes forward, everyone across this House carefully considers the specific implications of these proposals.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I am very grateful to all those who have participated in this debate. I absolutely recognise that this is a very delicate and difficult subject in which almost anything one says is capable of being misinterpreted, and frequently is. Therefore, I do not so much want people to agree with me—although I would like them to—as for this to become a respectable matter to discuss, which it has not been. Out there, a lot of people feel they cannot talk about it because they will be attacked for that.

Briefly, I thank the noble Viscount, Lord Craigavon, who talked about the disjointed approach to this whole policy. He said that I had drawn the ODC too tightly, but my noble friend on the Front Bench said I had drawn it too broadly, so I think I am pretty much in the right place, in that case. I thank my noble friend Lady Neville-Rolfe for her support. She asked about costs. The MAC costs £900,000 a year—that is the MAC’s budget. I think the MAC should be subsumed into this body, so when my noble friend the Minister says we are going to create a new body, we are not, we are going to get rid of one. I know that “one in, one out” is part of the Government’s policy, therefore I think that probably 1.5 million to 2 million quid would cover the enlarged body. I thank the noble Baroness, Lady Greengross, with her knowledge about the impact of demographic change on older people, and my noble friend the Earl of Shrewsbury with his knowledge about reskilling and the impact of new arrivals on that.

The noble Lord, Lord Green of Deddington, has faced, and put up, uncomfortable truths for many years. From time to time, I have been ashamed by how he has been treated by the House. Every Member of your Lordships’ House is entitled to be treated with respect. His style may be a trifle uncompromising sometimes—I accept that. Nevertheless, his facts and figures are accurate, even if some noble Lords find uncomfortable some of the conclusions which may have to be drawn from them.

I thank my noble friend Lord Horam for his comments on long-term thinking going wider than just the economy and being crowded. I think the only state in the US which is as crowded as the UK is New Jersey.

The noble Lord, Lord Bassam, and I have had common cause on many occasions in the past—and no doubt will again in the future. He is, as one would say at the pub, “a decent bloke”. However, I must say that this was a very, very sorry performance. Overcrowded Islands? had a question mark after it. What is wrong with the current data? What is wrong with the Migration Advisory Committee? We have heard several noble Lords talk about this. I will not detain the House by discussing how we would deal with the situation in Ukraine, but I could.

I say to the noble Lord that he is faced with a problem—namely, he is talking to two audiences. The first is the elite in the big cities and university towns. They regard this subject as insufferably vulgar, prejudiced and populist. The latter is the insult of the chattering classes. They believe that it will be all right on the night and that, if we stop talking about it everything will be fine. The rest of the country, however—if you go back to my old seat in Walsall North, the West Midlands, or elsewhere—is a completely different world. Do they think that there is an issue here? You bet they do. I must say to the noble Lord that, before we get to the next election, the Labour Party must decide where this fits. The red wall seats ain’t going to come back if what the noble Lord has espoused today is the Labour Party’s policy at the next election. This was one of the major reasons for them coming to us in the first place.

[Lord Bassam of Brighton (Lab)]

To correct the noble Lord, I say briefly that my party and I recognise the importance of these issues, but this is not the right way to set about having that debate. That is the difference between the noble Lord and me.

[Lord Hodgson of Astley Abbotts (Con)]

I am very happy to accept that rejoinder.

I say to the Minister: am I surprised? No. Am I disappointed? Yes. Are the ONS and MAC providing enough? We know that they are not; they are not joining up the dots. He had to read out the cost to the taxpayer of from £1.5 million to £2 million. Frankly, demographic change is an important part of any levelling-up policy—the flagship policy of this Government. What demography does will have an impact on our ability to deliver this. After giving a challenge to the noble Lord, Lord Bassam, I give one to my noble friend. We lost the Chesham and Amersham by-election because of building in the green belt. Now, we are proposing to build all across the green belts in our shire counties in the south-east of England and in other parts of the country. It is intensely unpopular and, unless we show people that we are doing something about it, we shall rue the day. I had hoped that when my noble friend came to the Dispatch Box that we would get the noble Lord, Lord Botham. In fact, we got Geoffrey Boycott.

I will end with two very brief quotations. The first is from David Aaronovitch, a writer from the Times I often quote, who said:

“I have a regular correspondent—let us call him Igor—who writes to me from Offa’s Dyke … Running through Igor’s protestations is a sense of bewilderment. And in this he captures what I now feel. What many of us are feeling and expressing. How could they? Why would they? Why didn’t we know? What is it about them that we just don’t get?”


Secondly, Octavia Hill, co-founder of the National Trust, wrote:

“We all want quiet. We all want beauty ... We all need space. Unless we have it, we cannot reach that sense of quiet in which whispers of better things come to us gently.”


The underlying purpose of the ODC is to provide for Igor, and millions like him all across the country,

“that sense of quiet which whispers of betting things will come to him gently.”

I commend the Bill to the House.

Bill read a second time and committed to a Committee of the Whole House.

House adjourned at 2.05 pm.

Elections Bill

Lord Hodgson of Astley Abbotts Excerpts

2nd reading
Wednesday 23rd February 2022 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I begin by associating myself with two themes that have been part of almost every other speech: first, the importance of a well-organised electoral system in which the public have trust and confidence, which is a critical part of our democracy; and, secondly, I add my congratulations to the noble Lord, Lord Moore, on his witty and informative speech.

We have before us a very big Bill—my noble friend Lord Naseby had a point when he said that it might have benefited from pre-legislative scrutiny—but, in six minutes, one has to focus one’s comments. I will focus my remarks on an area that has not had much attention so far: third-party campaigning. My interest in this is because I was appointed by the Government to review Part 2 of the rather inelegantly named Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act, hereinafter called the 2014 Act. I argued that, if a properly funded and properly organised electoral system is critical, a vibrant civil society is also a critical part of a well-functioning democracy. It is through the hundreds and thousands of charities, voluntary organisations and pressure groups, which are spread the length and breadth of the land, that our fellow citizens find ways to give power to their voice and opinions.

From time to time, of course, they will seek to speak truth to power, and sometimes power finds that uncomfortable. However, on the other hand, civil society is clearly not staffed entirely by angels, so there will be groups that seek to push the envelope in ways that are to the detriment of the system overall. That is why it became clear to me that, while some groups argued for the complete repeal of this part of the 2014 Act, they were wrong. If we are to avoid some of the unpleasantnesses that have emerged in the American electoral system and which have featured in other noble Lords’ speeches this evening, we need to have a proper regulatory system that balances these two difficult things. Indeed, I entitled my report, Command Paper 9205, Getting the Balance Right.

I will pick up on one general point. Here, I pick up the point made by the noble Baroness, Lady Hayman, and later on by my noble friend Lord Hayward. Many people thought that the 2014 Act was an entirely new Act. It was not. It made amendments to Part 6 of the PPER Act 2000 and now, in Clauses 24 and 27, we are making yet more changes to Part 6 of PPERA. It becomes increasingly difficult and hard to understand the implications of what is being proposed. It seems a pity that a person inevitably has to reach for a lawyer to guide him or her through these statutory layers. It could be argued that the statutory framework that underpins our electoral system ought to be, wherever possible, comprehensible to the reasonably informed reader. Can my noble friend the Minister say when he comes to wind up whether the Government have any plans not just to consolidate the 2000 and 2014 Acts but to take in the Representation of the People Acts, particularly that of 1983, so that we have in one place a statute that covers the conduct of both local and national elections and associated matters?

On the implications of the Bill for third-party campaigning, there are some areas that we might wish to probe in Committee. First, the regulatory period before elections take place, which is set at 12 months, is arguably too long. The rules governing joint campaigning are arguably too complex. The rules defining membership of an organisation are arguably too lax. However, I want to spend my last minute and a half on the other major area of concern: what is known as the intent test.

The 2014 Act broadened the range of activities caught by third-party campaigners to those that

“can reasonably be regarded as intended to promote or procure electoral success”.

This, it was argued, had what was called a chilling effect on all third-party campaigning. It is the Electoral Commission that decides what can be “reasonably be regarded”, and it is no criticism of the commission to point out that it is not under direct democratic control. We come to the point made by the noble and learned Lord, Lord Judge, earlier; he and I are on the same side as regards making sure that the power of Parliament against the Executive is properly maintained.

This is not even secondary legislation; it is tertiary legislation. It follows the point identified in the democratic deficit report produced by the Delegated Powers and Regulatory Reform Committee of your Lordships’ House in November 2021.

One way around this is for the Electoral Commission to produce a code of practice which would be debated and passed by your Lordships’ House and by the other place. Compliance with it by a third-party campaigner would then have a statutory defence. We might look at this as a way of lancing this boil of suspicion and mistrust.

In conclusion, I absolutely support a proper, organised electoral system. It is important not just to politicians and political parties but to ensure that every one of us has a chance to express our views directly or through organisations which we support. This is why we need to get the balance right.

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[Lord Taylor of Holbeach (Con)]

My Lords, much has already been said, but I wanted to speak on Second Reading—not least because it is the tradition of this House that if noble Lords wish to speak at further stages of a Bill, one should speak at Second Reading.

This is an important Bill. I judge it by a simple test, and a very personal one, for I am a believer in active participatory democracy and that active political parties at the grass roots are the custodians of that tradition. I want to know how the Bill strengthens that tradition.

I believe that our democracy and our parties are not just for election day. They should provide a corpus of political opinion to shape policies and political ideas within communities. I join the welcome and tributes to the noble Lord, Lord Moore of Etchingham. He pointed out the way in which there has been a considerable decline in the membership of local political parties. I am a strong believer in participatory democracy. Some will analyse that mass voluntary political parties were a response to the enfranchisement of the last century. Some will say that, in modern times, they are largely irrelevant. If that is so, I regret it. I find that it is not sufficient for parties to rely on a world of opinion polling and modern communication.

Many of us on these Benches go back a long way in our commitment to voluntary party activism. You can hear my noble friend Lord Cormack talk of these times, including when I succeeded him as the chairman of Lincolnshire Young Conservatives—we all have to start somewhere. My noble friend Lord Hodgson and I went on a tour as senior volunteers in the general election of 1997. We went to 63 key seats, and we lost them all. Given this background, it is not surprising that I will be judging the Bill by the contribution it makes to preserving community focus in politics—

[Lord Hodgson of Astley Abbotts (Con)]

No more, no more.

[Lord Taylor of Holbeach (Con)]

Oh, I have a few more minutes.

It is essential that we have grass-roots activism, grass-roots fundraising and grass-roots presence as a political party on policy-making. I do not believe that this House would wish to see pop-up party machines dominated by centralised political structures.

In his opening remarks, the Minister mentioned the large number of speakers—this reflects the importance of the Bill to our participating democracy. Regardless of party, we all have an interest to ensure that our methods of elections are honest, fair and seen to be fair. That is what this Bill seeks to achieve.

Legislation: Skeleton Bills and Delegated Powers

Lord Hodgson of Astley Abbotts Excerpts

Thursday 6th January 2022 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I add my thanks to the noble Baroness for introducing this important debate. When I wrote to her, I said that this was not an issue that would have them dancing in the saloon bar of the Dog and Duck but that, nevertheless, it would affect their lives even if they did not know about it.

I have the privilege—it is a privilege—to chair the Secondary Legislation Scrutiny Committee of your Lordships’ House. As my noble friend Lord Blencathra has explained, we have been working together to introduce these two reports. I will not repeat what we said in our SLSC report, which is entitled Government by Diktat, except to thank my noble friend Lord Sherbourne, who we will hear from in a minute, as the progenitor or author of the word “diktat”, which has resonated so well in the House and in the country. However, I will quickly remind the House about one thing. Last year, the SLSC looked at 901 pieces of legislation—every law binding on every citizen—passed with, I think we can all agree, a very inadequate level of scrutiny.

The reaction to our two reports was positive; indeed, the number of noble Lords who wish to speak this afternoon shows that we have struck a chord. In the last couple of minutes that I have I will turn the guns forward and decide what we could do to remedy and improve the situation. I have two suggestions. First, to pick up on the point the noble Baroness made, we have to discuss and make common cause with the Commons about how we might improve the situation. Any change will inevitably restrict the power of the Government, and no Government will like that. Many reasons will be given why these proposals are worthy but not necessary, and I am sure we will hear a great many of them from my noble friend when he winds up shortly. Without being unduly cynical, I hope that the House will forgive me if I say that I think the enthusiasm from Her Majesty’s loyal Opposition, always with an eye on the future, may be only limited, and that tears may be shed but they will be crocodile tears. The killer blow is the allegation—the accusation—that this is an attempt by the unelected Lords to tell the elected Commons how to do their job better. It is not a fair accusation or allegation; this is about the balance of power between the legislature and the Executive—between the two Houses of Parliament and the Government.

My second suggestion is perhaps slightly more radical. We in Parliament might be able to agree that the pace of change in our modern society is so fast that the more stately rate of change and passage of primary legislation is possibly too slow to keep up with events. We may have to accept that, in future, more fundamental changes will have to be contained in regulation. If we were to accept that, the Executive, the Government, might in return accept that new and better methods of scrutinising these fundamental changes could be introduced. This would not need wholesale reform but could be focused on improving methods of scrutiny of regulations that are of high statutory significance. If the Government could bring themselves to accept that as a first step, we would be on the way to improving a situation that, as I think every Member of the House agrees, is unsatisfactory.

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[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, I do not agree with my noble friend Lord Hodgson of Astley Abbotts that this debate would not interest people in the Dog and Duck—though it has to be said I have not felt like either a dog or a duck in this debate but rather like one of those creatures in a shooting gallery at the circus, as each one of your Lordships has risen to take aim. This subject should interest people in the Dog and Duck, and it rightly interests your Lordships. The subject matter and the quality of the debate justifies, amply and fully, the decision of the noble Baroness, Lady Cavendish of Little Venice, to bring this important matter before the House. I thank her for the measured and balanced way in which she set out her arguments, and I pay that tribute to other noble Lords who have spoken.

Good, clear, well-scrutinised legislation should be the objective of us all. I am quite happy with the idea expressed—one might not agree with this but I do—that the quality of government is improved by scrutiny. Here I agree with my noble friend Lord Norton of Louth that it is the constitutional right and duty of this House to ensure that the laws that any Government bring forward are of a high standard in both their policy intent and their drafting.

Many noble Lords made points addressing the ability of each House of Parliament to reject but not amend legislation. That is a matter not for the Executive only but for Parliament. As my noble friend Lord Sherbourne acknowledged, there is an issue that relates to your Lordships’ House in that regard. This House maintains the power and right to examine statutory instruments laid before it. The Government support the declaration made in 1994:

“That this House affirms its unfettered freedom to vote on any subordinate legislation submitted for its consideration.”—[Official Report, 20/10/1994; col. 356.]


Between 1950 and 2015, this House withheld consent to seven statutory instruments.

The Government agree with my noble friend Lord Strathclyde in his review after the House withheld agreement to the tax credits regulations in 2015 that in respect of these matters the will of the elected Chamber should prevail. There is no mechanism for the elected Chamber to overturn a decision by this House on a statutory instrument, and the Government said at the time that this could not remain unchanged. As we go forward, we will keep that situation under review, and we remain prepared to act if the primacy of the Commons is threatened.

I am sorry to have started on what might seem to be a minatory note, because I am actually profoundly interested in the many varied and interesting contributions made by noble Lords. As several—indeed, all—of them have justifiably noted, we have the benefit of a pair of carefully considered reports on the process of legislation from your Lordships’ Delegated Powers and Regulatory Reform Committee and the Secondary Legislation Scrutiny Committee. These are both thorough and learned reports, as one would expect of the committees in question. I congratulate my noble friends Lord Blencathra and Lord Hodgson, as well as all those noble Lords who served, on the quality of the reports. They deserve a full and proper response from the Government. I cannot pre-empt that response at the Dispatch Box today; it will be published in the usual way and, I trust, in the not-too-distant future. I say to the noble Lord, Lord Wallace of Saltaire—I nearly said, “my noble friend”, as we were noble friends for years—that this debate will certainly be taken into account as we consider the response.

Noble Lords will not be surprised to know that I did not particularly care for the soundbite titles—that democracy has been denied or this Government operate by diktat. I have never got out of bed wanting to diktat and I do not intend to start doing so at this advanced age.

The Government consider that this House’s role as a revising Chamber is of the utmost importance. In this House, we have the privilege of hearing from highly informed and experienced experts and practitioners from every walk of life, if occasionally with a soupçon of political spin. The Government take that expertise seriously and listen carefully to the concerns raised by noble Lords on all sides of the House. I share the opinion expressed by all, including in the conclusion of the noble Baroness opposite, that Bills often leave this House better than when they arrived. We should facilitate that process, which is of course down to the hard work, skill and knowledge of many noble Lords here today and the two committees that submitted these reports.

As my noble friend Lord Blencathra underlined, the issues raised here today are not new. For hundreds of years, Parliament has aimed to strike the right balance between allowing the Government to act and ensuring that Parliament’s voice is heard. The noble and learned Lord, Lord Judge, reminded us that this dilemma goes back to Tudor times. Parliament must consent to changes in the law. I understand some of the concerns expressed, and we will consider carefully what has been said. Skeleton Bills attract attention but, as the noble Baroness, Lady Smith, acknowledged, they may have their place and are not unknown; indeed, the noble Baroness, Lady Cavendish, will remember from her time in No. 10 that the Cities and Local Government Devolution Act 2016 and the Childcare Act 2016, referred to by the noble Baroness, Lady Smith, were examples of this.

The procedures for the delegation of powers are now well established. They almost invariably have parliamentary oversight through the negative or affirmative procedure or other procedures that Parliament has decided are appropriate. I remind noble Lords that delegated powers are granted only by Acts of Parliament, each of which will have been thoroughly scrutinised in this House and the other place.

Although it is true that there has been a general trend over the years—indeed, over many years, and not solely under this Government—of increasing numbers of statutory instruments being made, this is not a straightforward issue. As society evolves and becomes more complex, so do our laws. Government does more than it did 50 or 100 years ago. Your Lordships will have differing views on the desirability of that, although I rarely come to this Chamber without being asked for the Government to do more. Be that as it may, the world is more complex. Public expectations of the state are higher, and technological change is accelerating. As my noble friend Lord Hodgson of Astley Abbotts said, in order for the Government and our laws to adapt to this fast-changing world, they need to have delegated powers to give them the flexibility and speed to act and react; indeed, I think that every noble Lord who has spoken has acknowledged the necessity of delegated power.

Over the last few years in particular, the Government have needed to respond to a changing and complex landscape; first, following the referendum and general election decisions that the UK should leave the EU, and then, of course, with the response to the Covid-19 pandemic, to which many noble Lords have referred. It was right that the Government responded in the face of the pandemic to protect lives and livelihoods, while reducing the spread of Covid-19, including variants.

The alternative to delegated powers is to continually return to Parliament for every minor or technical change. I venture to suggest that this would not be the most practical use of noble Lords’ time or expertise— I do not think that anyone has suggested in the debate that that should be the case. The Government share the view of their predecessors that delegated powers are necessary. We believe that the processes around their creation and implementation are robust and have sought to improve them.

[Lord Hodgson of Astley Abbotts (Con)]

I am grateful to my noble friend for giving way. He was kind enough to quote me, but he quoted only half of what I said. I said that life is more complicated and therefore we would need more delegated legislation on important issues, but the Government had to give more and better methods of scrutiny. He quoted half of what I said about the concessions by the legislature, but he did not give the concession that the Government must make in response to that.

[Lord True (Con)]

My Lords, I am sad; I was seeking courteously to acknowledge the contribution made by my noble friend. I am grateful that he has reiterated what he said. I have said, and will say again, that the Government will carefully consider the points made by his committee and others, which embrace much of the second part of what he said.

I was referring to the efforts made by the Government to improve implementation. In the last few years, all departments have been asked to appoint a Minister and senior official to be responsible specifically for secondary legislation. Departments are responsible for the quality of their own secondary legislation, and Ministers can be asked to account for their department’s performance to the Parliamentary Business and Legislation Cabinet Committee. All statutory instruments laid by Ministers must now go through the PBL Committee triage process. This is relatively new. Departments are given laying dates to limit the number of statutory instruments being considered at any one time by Parliament. This process ensures that there is a steady flow of statutory instruments being laid before Parliament and therefore, I hope, facilitates better scrutiny. These changes have strengthened the Government’s approach to secondary legislation and created a clearer structure for accountability.

Before a Bill is introduced by the Government, we take steps to ensure that any and all powers contained within it are justified. Ministers are brought before the Parliamentary Business and Legislation Cabinet Committee, where the Bills are examined in detail. The Lord President of the Council, who chairs that committee, told the Delegated Powers and Regulatory Reform Committee earlier this year that he will

“invariably ask for the powers to be justified”

and that

“it is in the interests of the Government to be as specific as possible in the Bills that have been brought forward.”

I have the privilege of being a member of that committee and can assure noble Lords that the Lord President is as good as his word.

Ministers must seek the agreement of the PBL Committee prior to introduction of a Bill. They must provide the committee with a delegated powers memorandum and the committee will examine each power and the justification for it. The Lord President wrote to the chairs of the DPRRC, SLSC and Constitution Committee setting out that—and I profoundly agree with this sentiment—

“Bills with substantial powers, though sometimes essential, should not be a tool to cover imperfect policy development.”

I agree with what the noble Baroness opposite said about that. The PBL Committee is one mechanism through which this is safeguarded as the committee must be satisfied that the powers are necessary and essential before agreeing a Bill’s introduction. The committee, as the Lord President went on to say,

“discusses every single power and every single Henry VIII power that comes forward. It has a note provided to it on the use of powers and the legal consequences of those powers. The law officers sit in and we have to be convinced that those powers are needed and are proportionate. The law officers are very important in this, particularly in relation to Henry VIII powers.”

The noble Viscount, Lord Stansgate, asked about the control mechanism. PBL is the check and the pressure to ensure that Bills are fleshed out at the first stage. Noble Lords can be assured that any Bills with delegated powers have been interrogated internally before being brought to this House and the other place. In every meeting on delegated legislation, consideration is of course given to the likely challenges to be presented in your Lordships’ House. As this debate demonstrates, your Lordships have a great interest in delegated powers, and I repeat that it is in every Government’s interest to ensure that before a Bill arrives here, each and every power is justified and subject to the appropriate parliamentary procedure.

Of course, this is a matter of judgment. Sometimes the DPRRC will make a different judgment. I and all Ministers fully respect that. The Government examine any report and concerns about these powers in a Bill seriously and bring amendments when necessary. There is, of course, further scrutiny of such powers when a Minister decides to use them. Your Lordships will be well aware of the differences between these procedures, and the Government greatly appreciate the work of the Secondary Legislation Scrutiny Committee and others in holding us accountable through their examination of instruments.

I am aware of the amendment tabled by my noble friend Lord Blencathra, and that of my noble friend Lady Williams, on the code of practice for non-crime hate incidents. I look forward to hearing speeches, but it is not right to begin the debate on the police Bill here or to discuss the amendments tabled to it. That is for another day, and other noble Lords will wish to take part. The House will have its chance to consider whether that is an appropriate delegation of power, as is right and proper.

I am also aware that the noble Lord’s committee has made recommendations in its report relating to guidance, and that a number of noble Lords, including my noble friend Lord Blencathra, the noble Baroness, Lady Andrews, and the noble Lord, Lord Davies of Brixton, have spoken on this. I agree that guidance is not law, as the Leader of the House of Commons said in evidence to the noble Lord’s committee when he stated:

“I very strongly agree … that guidance is guidance, and the law is the law.”


That is right, but I have heard what has been said in this debate and we will carefully consider the recommendations of the report. We will carefully consider the reports of both your Lordships’ committees and will publish the responses shortly.

I am tempted to respond to many suggestions made in the debate. The noble Lord, Lord Janvrin and my noble friend Lord Bridges of Headley cast particularly fruity-looking flies. Your Lordships will appreciate that I will not respond specifically at this stage, but I can assure you that we are carefully considering those recommendations, including those that suggest amending the language of the Cabinet Office’s guide to making legislation. I do not wish to pre-empt the Government’s response today. I hope that we will have a further opportunity to consider that, but I cannot speak for the usual channels.

In a changing and complex world, delegated powers are necessary for the proper functioning of government. I acknowledge that the particular circumstances of the last few years have at times meant legislating at pace and taking a greater number of powers that at one time would have been inconceivable to many of us, to ensure flexibility as the situation evolves, especially in responding to the pandemic. As the pandemic abates, I am hopeful that we will find ourselves returning to a more predictable rhythm of producing and passing legislation. The noble Lord, Lord Wallace, referred to this. He will forgive me if I refer to his specific points on the Elections Bill separately.

The Government have confidence in their processes, and the processes in Parliament, to ensure that laws are necessary, clear and effective. I repeat: we will take on board the reports of the two committees and your Lordships’ comments, in what has been an outstanding debate. Where the Government feel that processes can be improved, we will endeavour to do so.

It is the Government’s constitutional role, and indeed their right, to put before your Lordships proposals for legislation they judge to be expedient to deliver on their manifesto commitments and to address the issues of the day. It is Parliament’s role to ensure that this legislation is effective, necessary and balanced. Your Lordships have a fundamental place in that.

Your Lordships’ views have been heard. I have listened to the debate with very great care. The debate is timely. I am confident that this balance between government and Parliament will continue to evolve for the better. I repeat that I hope the Government will, before too long, be able to respond to the reports recently published by your Lordships’ committees.

Financial Services Bill

Lord Hodgson of Astley Abbotts Excerpts

Committee stage & Lords Hansard
Wednesday 3rd March 2021 Grand Committee

[Baroness Noakes (Con)]

My Lords, this is a large group of amendments and I shall not comment on all of them. I had not intended to speak about Amendment 51A, to which the noble Lord, Lord Sikka, spoke a while ago, but the way in which he framed his comments has prompted me to do so. The noble Lord persistently used the term “trade associations” to describe the professional bodies that are involved in supervisory activities in relation to money laundering. I declare an interest as a member, and former president, of the largest of the professional bodies to which he referred, namely the Institute of Chartered Accountants in England and Wales.

The ICAEW does act as a regulatory body for its members in relation to money laundering, as it does in relation to other activities, but its members carry out as professionals. This activity is overseen by an independent regulatory board, which is chaired by a QC and has lay members on it. I fear that the noble Lord, Lord Sikka, has not presented the whole story on this—perhaps he did not know it; those who listened to his contribution ought to be aware that it is not the whole picture by any means.

My noble and learned friend Lord Garnier made a strong case for his new offence of failing to prevent an economic crime. He will know that there is considerable concern about the practical impacts of such an offence on the commercial world and that there was only a small majority in favour of a new offence when the Government consulted on it. I have no idea what is in the Economic Secretary’s letter, to which he referred, but I believe that the Government made a wise decision last year in referring the matter to the Law Commission for further study. We should await its findings. I understand that it is due to report by the end of this year; that is not a huge delay for something that could have significant consequences for a large part of the commercial world.

I support the idea behind Amendment 51 in the name of my noble friend Lord Holmes of Richmond, namely a review of the “know your customer” regulations. All noble Lords taking part in this Committee are PEPs—politically exposed persons—and I am sure that we have all bumped up against the ludicrous way in which some banks and other financial institutions act under the guise of their customer due diligence obligations. Looking again at this whole territory is definitely worth while.

Further, the UK’s money laundering rules were made in the EU. Now that we have left it, we have the opportunity to see whether the money laundering directives and regulations now embedded in our law are fit for purpose. The UK must remain committed to high standards in the fight against financial crime, but looking at the efficiency and effectiveness of the rules is entirely consistent with maintaining high standards.

The KYC rules are just one part of the money laundering rule set, and I would urge any review to go beyond KYC and look at the whole range of rules. For example, the SARs regime for suspicious activity reports is very burdensome for all involved, both the firms that make the reports and the regulators that receive them. In addition, there are restrictions on banks’ ability to communicate with each other about customers or potential customers, which increases costs and certainly reduces effectiveness. So, I urge my noble friend Lord Holmes to be even more ambitious in the review that he seeks.

Lastly, Amendment 96 in the name of the noble Baroness, Lady Kramer, seeks the establishment of a financial services whistleblower office. I wonder whether she has taken account of the changes made by the regulators to whistleblowing arrangements in regulated firms. Since early 2016, firms have had to have a nominated non-executive director as a whistleblowers champion—not responsible for whistleblowing but, effectively, for its oversight. Most firms align that specific required responsibility with the responsibilities of the audit committee chairman. In addition, the whistleblowing rules themselves were overhauled at the same time. I have not yet heard the noble Baroness speak to her amendment but I wonder whether the evidence base that she relied on as a background to her amendments pre-dates those new arrangements, and whether it would be wise to review how well the new arrangements are working in practice before creating yet another quango.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have put my name to Amendment 84, in the name of the noble Baroness, Lady Bowles, so I am afraid I am going to disappoint my noble friend Lady Noakes. We are normally on the same side but I am afraid that, on this issue, we are not. Perhaps I can turn away her wrath somewhat by saying that I much supported her views on Amendment 51A, which is a worthy amendment but does not go nearly far enough. We need to look at the whole regime; looking at one part of it is not sufficient, a point I was trying to make on an amendment we debated on the first day in Committee.

Like my noble and learned friend Lord Garnier, I am grateful to the noble Baroness, Lady Penn, and to the Economic Secretary to the Treasury for their briefing and correspondence. I apologise that the briefing was cut short for me because I had a power cut. My computer therefore went down, but I am grateful for the letter that was received earlier today.

The issue of failure to prevent has been pretty widely forked over in the speeches on this group, so I want to make two pretty quick points. The first flows from my membership of the Committee in your Lordships’ House which undertook the post-legislative scrutiny of the Bribery Act. We reported in March 2019 and our report found that the Act was:

“an excellent piece of legislation which creates offences which are clear and all-embracing.”

We went on to say that

“the new offence of corporate failure to prevent bribery is regarded as particularly effective, enabling those in a position to influence a company’s manner of conducting business to ensure that it is ethical, and to take steps to remedy matters where it is not.”

In our report, we noted, as did the noble Lord, Lord Rooker, that it was as long ago as May 2016 that the then Prime Minister, David Cameron, called for a consultation on a new offence of failure to prevent economic crime. We also noted that when Ministers gave evidence to the bribery committee on 4 December 2018, now over two years ago,

“Mr Argar said: ‘We intend to publish our response to it [the consultation] next year,’ and Ben Wallace MP added: ‘The Solicitor-General and I are pretty keen that we explore further the failure to prevent in broader economic crime … We raised it at the last inter-ministerial government meeting’”.

He added that John Penrose, the Government’s anticorruption champion,

“and I are keen to see this.”

The responses to the government consultation, although unpublished, and those suggested by Mr Glen to be inconclusive, are not as inconclusive as all that. The staff of our committee were able to find a lot of the submissions, which were available on the websites of the respondents, and none that we could find opposed the extension of the failure to prevent offence. Indeed, many supported it.

That takes me to my second point: the road to hell is paved with good intentions. The Government said in May 2019 that the call for evidence had closed in March 2017 and a response “will be issued shortly”. So, what are we waiting for? The Government have been standing on the edge of the pool for over two years. Each time they seem ready to jump in, inertia overcomes them and another round of consultation begins—now with the Law Commission, for which I have the highest regard. When my noble friend comes to reply, it would be helpful if she could let the Committee know what angles the Law Commission is supposed to focus on in this latest review and, in particular, what angles it will examine that have not been extensively looked over during the past four years.

Financial Services Bill

Lord Hodgson of Astley Abbotts Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Thursday 28th January 2021 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con) [V]]

My Lords, I am afraid the wonders of modern technology are such that I am confined to a landline today, but that has not prevented me hearing two distinguished maiden speeches from my noble friend Lord Hammond of Runnymede and the noble Baroness, Lady Shafik, and I congratulate both of them. I also add my congratulations to the Minister on his explanation that this Bill was the first step in creating a regulatory framework designed to reinforce the UK’s position as a leading world financial centre and enable the UK to take advantage of our post-Brexit freedom of action.

In addition, as the Association of British Insurers pointed out in its briefing on the Bill, it also provides a good foundation for positive future co-operation with our European neighbours. As such, it has my enthusiastic support, but as the noble Lord, Lord Reid of Cardowan, pointed out in his speech, it is a Christmas tree Bill, and there are, inevitably, some decorations about which I am less enthusiastic, and there is at least one decoration that seems to be missing from the tree altogether.

Before I go any further, I draw the House’s attention to my entry in the register of interests, in particular that I chair a company that is regulated by the FCA. My foremost point concerns the culture we are trying to create with this Bill. What do I mean by culture? When the regulators, the FCA and others come to see you in the firm, they are very interested in what the culture of the firm is and what the prevailing attitudes of the senior management are; for example, the balance being struck between innovation and conservatism, the level of acceptance of financial and operational risk, the treatment of staff and so on. Up to now, a large measure of this culture has been dictated by the institutions of the EU. This, of course, will no longer be the case. I ask my noble friend: who is going to be responsible for establishing this future culture? How do the Government plan to assess the culture? How, if at all, would they plan to achieve changes to that culture? Last, but by no means least, as many other noble Lords have remarked, what role will Parliament have in that process? At first glance, there seems to be a considerable democratic deficit, as many noble Lords have said.

A good part of the Bill is devoted to improvements in the tightening up of the regulatory regime. Having participated in the proceedings on the Sanctions and Anti-Money Laundering Act 2018, I understand and support such changes, particularly where they reflect changes in business practice and business behaviour. However, all these measures come with a cost. That cost is borne not by the Government or by financial institutions but by the consumers, clients and investors. There is a need, as we introduce new regulations to deal with new circumstances, to step back and see what old regulations can be amended, or be dispensed with completely as being no longer effective.

As we sail into this brave new world, an important issue will be the extent to which the Government are able to obtain reciprocity or equivalence from the EU. It will be a matter of great interest to Parliament, this House, and indeed the country as a whole. I chair the Secondary Legislation Scrutiny Committee. When the committee considered the various interim regulations for the financial services sector, it was far from clear what, if any, reciprocity had been achieved. I was asked by the committee to write to the Minister John Glen about this, and I am afraid that his response, dated 7 January, which I invite my noble friend to read, was hardly a model of clarity. The Government declined to accept new Clause 8 in the other place, which required the Government to report on equivalence. If this is still the Government’s considered position, they will need to do better than Mr Glen’s letter.

I turn finally to a decoration that I think is missing from the tree altogether. I served as a member of the post-legislative scrutiny committee on the Bribery Act. Our investigation revealed a number of concerns. The first was the difference in treatment of smaller companies as opposed to larger companies as a consequence of the application of the directing mind principle—this was referred to by the noble Lord, Lord Hendy, and my noble and learned friend Lord Garnier. The second concern was the often inordinate time taken over investigations, and, finally, the strange position that the failure to prevent offences applied only to bribery and tax cases and not to corporate crime generally.

I am aware that, in the other place, the Government declined to accept a widening amendment, but I think that the noble Lord, Lord Rooker, the noble Baroness, Lady Bowles, my noble and learned friend Lord Garnier and I will wish to explore this anomaly and return to this question in Committee.

To conclude, this is an exciting time for this country and for our financial services sector. Getting the right foundations in place quickly will be of critical importance, which is why this Bill has my support in principle.