Lord Northbrook debates involving the Cabinet Office during the 2019 Parliament

Fri 9th Feb 2024
Succession to Peerages and Baronetcies Bill [HL]
Lords Chamber

2nd reading & 2nd reading: Minutes of Proceedings
Thu 28th Jan 2021
Financial Services Bill
Lords Chamber

2nd reading (Hansard) & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 2nd reading
Wed 18th Mar 2020

Succession to Peerages and Baronetcies Bill [HL]

Lord Northbrook Excerpts
Moved by
Lord Northbrook Portrait Lord Northbrook
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That the Bill be now read a second time.

Lord Northbrook Portrait Lord Northbrook (Con)
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My Lords, I preface my remarks by saying that the Bill has nothing to do with membership of your Lordships’ House. It concerns only the specialist topic of the arrangement for succession to hereditary peerages and baronetcies by making a small step towards modernity.

Noble Lords will be aware that in most cases, hereditary peerages can descend only through the male line. Thus, it follows that in some cases, where there is no male heir, the peerage dies out. I declare an interest as being in this situation: I have a very capable daughter who could inherit my title under this Bill. There are a few cases—mostly Scottish, like that of my noble friend Lord Lucas, or very ancient ones—where the Letters Patent specifically allow descent through a woman.

I know that some speakers, including my noble friend Lady Noakes, will ask why peerages should not now descend via the eldest child. I can only quote from a peerage expert, my noble friend Lord Fellowes of West Stafford, in his speech of 2015 on a similar Bill. He said that

“there have been several attempts to encourage some interest in the idea, but it never gets off the ground, and the reason is simple. An immediate change now to eldest child inheritance would mean that a great many men would be stripped of their courtesy titles and the names they have lived under for years, and so would their children. It would mean that the financial arrangements”,

especially trusts,

“that have been designed to protect a large number of families’ interests would be wrecked, and that those same families would be facing an intolerable position, dividing siblings and bringing real unhappiness”.

In 2015 my noble friend Lord Trefgarne, on the eldest child only being able to inherit the title, said

“the plain fact is that that proposition has been before Parliament on several occasions and has on each of those occasions failed to attract your Lordships’ support”.—[Official Report, 11/9/15; cols. 1618-21.]

If noble Lords feel that my noble friend Lord Fellowes’s sentiments are a bit melodramatic, I point out, more prosaically, that the stability of trust arrangements in particular have allowed great houses and estates to remain in the same hands. It gives the UK a huge advantage from a tourism viewpoint—unlike France, where the Napoleonic law means that equal division of assets on death has split family assets up, with the result that the privately owned stately home offerings for visitors are much more limited. Such a problem could occur if peerage descent went to the firstborn child only.

Turning to the subject of extinct peerages, I repeat the observation of my noble friend Lord Fellowes in the 2015 debate in relation to his wife’s family. He said that if the Bill were allowed to pass, the Kitchener title and others would be able to be revived, which I think is rather special for such a famous name. I am aware of Harriett Baldwin’s Bill on the matter in the other House, which will come to your Lordships in due course. While I will personally not seek to obstruct it, I believe a more gradual approach is required to get full approval in your Lordships’ House.

As I said in 2015, I understand that Section 14 of the Human Rights Act 1998 now makes it illegal to discriminate on the basis of sex where both sexes may perform the function required. This would apply to peerages. The noble Lord, Lord Pannick, mentioned to me at the time that if a legitimate female issue, where the peerage would otherwise become extinct, referred a case to the European Court of Human Rights, they could well have a chance of success. I would perfectly well understand if some heirs might wish to take this route.

In summary, while some noble Lords might believe that this Bill does not go far enough, peerage succession is a complex subject that needs to be tackled gradually, and I hope it will find favour with your Lordships. I beg to move.

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Lord Northbrook Portrait Lord Northbrook (Con)
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My Lords, I am grateful to all noble Lords who have taken part in this debate and to my noble friend the Minister for her detailed and interesting reply.

The general mood seemed to be not entirely in favour of the Bill, although my noble friend Lord Astor said it was a crucial step forward. My noble friend Lady Noakes fired away with two barrels, saying that it was “misogynistic” and that we should be focusing more on Private Members’ Bills on crime and immigration. I thought that is what the Government were meant to be doing. I see no harm in Private Members’ Bills as long as the Peer concerned declares an interest; the worst thing is when they bring forward a Bill and omit to declare that interest. I agree with my noble friend Lord Lucas, who said that Parliament is the only way in which the law can be changed.

I note the comments on Clause 3, which obviously needs to be considered carefully, and there were many criticisms of Clause 1(4), which I am happy to go away and consider. Otherwise, I beg to move.

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

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

Lord Northbrook Excerpts
Lord Northbrook Portrait Lord Northbrook (Con)
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My Lords, I acknowledge the tenacity of the noble Lord, Lord Grocott, in promoting this Bill, and for reaching the age of 80 since we last debated it. It is for another day to discuss whether, in normal times, Private Member’s Bills which do not pass your Lordships’ House should have the same priority in the next Session. I do not like the decision to remove equal chances of any Private Member’s Bill succeeding in the ballot, by instead cherry-picking a group on a rather unfair basis without consultation with the House.

As my noble friend Lord Trenchard has already said, the Bill is a breach of a promise given in 1999. On June 22 that year, Lord Denham asked the following question of the Lord Chancellor:

“Just suppose that that House goes on for a very long time and the party opposite get fed up with it. If it wanted to get rid of those 92 before stage two came, and it hit on the idea of getting rid of them by giving them all life peerages … I believe that it would be a breach of the Weatherill agreement. Does the noble and learned Lord agree?”


The Lord Chancellor replied:

“I say quite clearly that … the position of the excepted Peers shall be addressed in phase two reform legislation.”—[Official Report, 22/6/1999; cols. 798-800.]


I also remind the House of the importance of the then Labour Lord Chancellor’s words on 30 March 1999:

“The amendment reflects a compromise negotiated between Privy Councillors on Privy Council terms and binding in honour on all those who have come to give it their assent.”—[Official Report, 30/3/1999; col. 207.]


For the hereditary Members of the House at that time, of which I was one, it was a vital part of the 1999 Act and a key condition for letting it make satisfactory progress through the House. Nothing could be clearer than a former Lord Chancellor’s words: that is why I believe that the Bill indeed breaches the Weatherill agreement and the House of Lords Act 1999, as does a current hereditary Labour Peer. I also believe that, as a matter of principle, such major constitutional reform should be implemented by government legislation rather than by a Private Member’s Bill.

Lord Anderson of Swansea Portrait Lord Anderson of Swansea (Lab)
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Does the noble Lord agree with Lord Salisbury that that agreement was brought about by undue pressure and substantial threats at the time?

Lord Northbrook Portrait Lord Northbrook (Con)
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No, I do not agree with that.

The current system for the election of the 92 can be fine-tuned. The change I would like to see is that all replacements should be elected by the whole House, which would give more logic to the Labour and Liberal by-elections in particular. Overall, the system controls the number of hereditary Peers to a fixed number and has produced good-quality replacements. The hereditary Peers are a strong link with the past, a golden thread that goes back to the first separate sitting of the House in 1544. Until relatively recently, in House of Lords terms, the House was entirely hereditary. By-elections provide a way into this House that is not dependent on prime ministerial patronage.

Since we last considered such a Bill from the noble Lord, Lord Grocott, the problem has been in controlling the number of life Peers—there have been no fewer than 62 new creations since the previous time we debated the Bill—and getting equal quality. I suggest that there should be elections among their numbers at each election to keep the total size of the House to, say, 500. To monitor quality, there should also be a statutory appointments commission whose verdict cannot not be overruled by the Government.

The Government’s response to the Burns committee report, which recommended limiting the size of the House by a different method, was not encouraging. It said:

“The Government does not … accept the Committee’s recommendation that the Prime Minister must now commit to a specific cap on numbers, and absolutely limiting appointments in line with the formula proposed”;


hence it appears there will be no limit on the size of the House. If and when the Labour Party gets back into power, as the noble Lord, Lord Anderson of Swansea, so rightly said, it will also have to appoint a considerable number of new Peers to get its legislation through, so the size of the House will keep increasing.

With regard to further reform, we have also been promised a constitutional rights and democracy commission. I believe that we should wait for what this produces before acting on any constitutional Private Member’s Bill. In summary, though, significant legislation to implement phase 2 Lords reform should be brought forward by the Government rather than by a Private Member’s Bill.

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Lord Northbrook Portrait Lord Northbrook (Con)
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I am very grateful to the noble Lord, Lord Grocott. Does he recall the passage in Alastair Campbell’s memoirs when he said that he could not believe that Viscount Cranborne was going to go along with this deal, as it was only going to end in tears for him?

Lord Grocott Portrait Lord Grocott (Lab)
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I am not sure that I understood that intervention. I have read most of Alastair Campbell’s memoirs—but I can tell the noble Lord what was going on in Downing Street in 1999, because I was working there. We were certainly worried to death about the whole of that legislative programme. Our clear manifesto commitment was to remove all the hereditaries, and we were prevented from doing that because we were told that the rest of the programme would be wrecked. If there are any noble Lords who have not picked up on that and understood it, will they please read it again in Hansard, or read the comments that the Marquess of Salisbury has made? Do us all a favour, please, and when or if we have this debate next year—if it fails this year, I shall bring it back, and that is not a threat but a promise—let us end the discussion about that. It is simply false, incorrect, wrong and absurd. I hope that I have made myself clear.

The other point that needs repeating, even though several—

Financial Services Bill

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

(3 years, 2 months ago)

Lords Chamber
Read Full debate Financial Services Bill 2019-21 View all Financial Services Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 13 January 2021 - (13 Jan 2021)
Lord Northbrook Portrait Lord Northbrook (Con) [V]
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My Lords, putting the contribution of the UK’s financial services in context, according to a City/PwC paper in January 2020 they contributed £75.5 billion in tax revenue in 2019, employing about 1.1 million people. Overall, I support the Bill’s measures, which bolster the consistent use of international standards. This is crucial to reducing the unnecessary fragmentation of markets that impacts on consumers. I agree with the delegation of responsibility for financial firm requirements to the regulators, subject to an enhanced accountability framework and necessary parliamentary scrutiny.

The three main objectives stated in the Bill are entirely sensible. The Bill also amends existing laws on financial services in the 17 separate areas grouped by these three stated objectives.

My only criticism of the second objective is that, while it promotes openness to EU and overseas financial firms that come here, no attempt was made in the Brexit negotiations to obtain passporting rights from the EU as a quid pro quo. The Government seem to have believed that these should only now be negotiated—alas, when we have no bargaining tools left in other areas. The EU seems in no hurry to assist us. Can the Minister explain the logic in this?

I welcome the new regulatory regime proposed for non-systematically important investment firms. The Government rightly state that the existing regime for these institutions can be disproportionate, inappropriate and impose unnecessary burdens. The Bill would rightly allow the Financial Conduct Authority to introduce a tailored regime for such companies. The Government say that the UK regime will be flexible and is intended to achieve similar outcomes to the reform in the EU in 2021 but

“tailored to the specificities of the UK market.”—[Official Report, Commons, Financial Services Bill Committee, 17/11/20; col. 59.]

I welcome the Bill’s implementation of Basel III standards on banking supervision. Some member firms will have been working towards implementing the EU’s capital regulatory requirements, CRR II. How may the UK diverge from CRR II?

I also support the framework to wind down the Libor benchmark, as outlined in the Bill. Will the Minister urge the FCA to publish further detail on its replacement as soon as possible?

Can the Minister clarify how the Treasury intends to make equivalence decisions under the framework for the new overseas fund regime? Will the Government publish a regular report on the progress and results of negotiations for obtaining equivalence for UK firms in EU countries? I strongly support maintaining the effectiveness of the financial services framework and sound capital markets in Clauses 8 to 17.

During the rest of my contribution, I will focus on the unfortunate statistic of the rise in complaints to the FCA and cite two examples of regulatory failure. According to an FTAdviser article of February 2020, the number of complaints about the City watchdog jumped by more than 50% in 2019, primarily due to concern about the regulator’s supervision of the industry. The main driver behind the hike was the sharp increase in the number of complaints relating to the FCA’s advisory role—namely, failure to act on information and to spot a problem. In the same month, the FCA was reprimanded by the complaints commissioner, Antony Townsend. He wrote to the FCA board expressing serious concerns, branding the current situation at the watchdog “totally unacceptable”. This followed a previous report in 2019, where the complaints commissioner highlighted a

“lack of effective prompt action”

by the financial regulator, in a number of cases where advisers and consumers reported concerns about a fund.

The two individual examples of regulatory failure on which I will focus are London Capital & Finance and Beaufort Securities. In December 2020 an independent investigation into the FCA’s handling of the LCF mini-bond scandal rebuked the regulator for “significant gaps and weaknesses” in its policies and practices. The review found that the City watchdog had failed to properly regulate the now collapsed company. It warned that its handling of information about the business from third parties was “wholly deficient” and an

“egregious example of the FCA’s failure to fulfil its statutory objectives”

in regulating the company. The mini-bond provider collapsed in May 2019, owing more than £230 million and putting the funds of some 14,000 bondholders at risk.

The main highlights of the review were that, first, investors had not received enough protection from the regulatory regime, and, secondly, LCF had not been adequately supervised by the FCA. Most importantly, the review stated that the root causes of the FCA’s failure to regulate LCF were “significant gaps and weaknesses” in the policies and practices it implemented to analyse the business activities of regulated firms. It had allowed LCF to use its authorised status to promote

“risky, and potentially fraudulent, non-regulated investment products to unsophisticated retail investors”.

Although the regulator’s financial promotions team had raised concerns about LCF’s financial promotions on six occasions, the breaches did not result in a referral to the supervision or enforcement divisions. Lastly, the report said:

“FCA staff who reviewed materials submitted by LCF had not been trained sufficiently to analyse a firm’s financial information to detect indicators of fraud or other serious irregularity … Neither did the FCA appreciate the significance of an ever-growing number of red flags, which were indicative of serious irregularities in LCF’s business. This occurred at a time when LCF’s unregulated bond business was growing at a rapid pace and substantial funds were being invested by Bondholders.”


I do not have time to go through the case of Beaufort Securities with which there were many of the same problems, though in a number of cases, investors got their money back. Overall, I welcome the Bill.

Budget Statement

Lord Northbrook Excerpts
Wednesday 18th March 2020

(4 years, 1 month ago)

Lords Chamber
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Lord Northbrook Portrait Lord Northbrook (Con)
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My Lords, it is always a pleasure to follow the interesting and entertaining viewpoints of the noble Lord, Lord Desai. I will talk first about the post-Budget emergency economic measures. Following the example of France and Portugal and the USA’s proposals yesterday, the Chancellor stated that he would do whatever it takes to get businesses through these difficult times. He unveiled a package of major assistance for companies and individuals: the £330 billion loan guarantee support and the £20 billion business assistance help—they are astonishing figures. I approve of the way the Chancellor said that:

“This is not a time for ideology and orthodoxy.”


First, I welcome the loan assistance package, with separate schemes for larger and smaller companies, but note other noble Lords’ concerns about the delay in banks processing these. For individuals, I commend the Chancellor’s decision to suspend mortgage payments for three months for those in difficulty. Secondly, I agree with the Government helping with companies’ fixed costs, again particularly with the larger and smaller company schemes regarding business rates relief, and with improved cash grants for smaller companies. Thirdly, I welcome the proposal to look at regulatory relaxation in sectors such as transport, airlines and airports. Finally, on these extra measures, I await the

“bold and ambitious employment package”,

which the Chancellor pledged to establish, having made a start with more generous statutory sick pay proposals.

I agree with many noble Lords that much more needs to be done. I was fascinated by the idea proposed by the noble Lord, Lord O’Neill, of helicopter money, which was supported by my noble friend Lord Lamont and the noble Lord, Lord Adonis, and put into historical perspective, regarding its use by other countries, by the noble Lord, Lord Razzall—I agree that there is less risk of inflation in doing it now. I agree with my noble friend Lord Leigh of Hurley that another simple route would be through the PAYE system.

I turn to the Chancellor’s original 2020 Budget, which I also welcomed. Even before such difficult circumstances, a different approach had to be taken after the election, especially to thank constituencies in the north and Midlands that elected Conservative MPs, wanting a new approach to improve their neglected infrastructure and business prospects. On monetary policy, I welcome the 0.5% base-rate cut, which is always a necessity in difficult economic times.

Moving on to fiscal matters, the Budget’s economic forecasts are now history, as the OBR’s estimates were completed before the Covid-19 outbreak really got going. Also, they assume that the Brexit negotiations are going to go entirely smoothly, with a “typical” trade deal with the EU. I ask the Minister to heed well the words of the noble Lord, Lord Adonis, on Brexit negotiation delay.

Economic growth, as predicted by the OBR for the Budget over the next five years, was not very exciting. Clearly, these figures will have to be revised substantially downwards. By way of comparison, the European Commission has revised its estimate for European GDP growth, now expecting a GDP contraction at 1% this year. Apparently—according to the Canadian National Post—unpublished internal estimates are more likely to indicate a contraction of 2.5%.

As many noble Lords have stated, the original Budget’s big spending boost over the period came in public sector net investment. Public sector spending is forecast to grow at 2.8%, twice as fast as the economy. Public sector net borrowing, excluding yesterday’s emergency measures, at its peak increases by 74% to nearly £67 billion by 2021-22. While this is a major increase, it is still a far cry from the huge figure inherited from Labour in 2010. In answering criticism from the Adam Smith Institute and the IEA, I maintain that while interest rates are low, this is the time to do this. Of course, as the IFS stated in its Budget review, the debt hike is vulnerable to changes in interest rates, inflation and economic growth. Obviously, the longer the Covid-19 outbreak continues, the worse the effect will be here. I also note that the fiscal rules framework will be reviewed in the autumn and doubtless tinkered with.

Looking at the figures in more detail, I welcome the initial £12 billion fiscal stimulation package, directly related to the outbreak, with £7 billion going to people and businesses. However, I am worried about liquidity problems for smaller companies; as I predicted, the £7 billion figure had to be expanded considerably due to the outbreak. The other £5 billion is going to the NHS—a good decision.

Turning to longer-term public net investment, I note the huge figure of £600 billion promised over the forecast period for gross public-sector investment but calculate the net figure at £451 billion. Can the Minister let me know about the major components that must be deducted to get to £451 billion? The big public investment figures mentioned for investment, R&D, new roads, the affordable homes programme, improving broadband, potholes, 70,000 new houses and a new building safety fund are all welcome, as long as they are properly implemented.

In other departments, I welcome the extra £6 billion of regular funding for the NHS, noting that it is in addition to the extra £34 billion over five years. I also welcome the announcement that the Government will give the NHS whatever it needs to fight the Covid-19 outbreak. Regarding the further education sector, I am sure that the Minister is as pleased as I am to see the further new capital promised to improve the condition of the further college estate. On the transport sector, I welcome the money to be invested in the transforming cities fund.

In summary, the OBR said that

“the Government has proposed the largest … fiscal loosening since the pre-election Budget of March 1992”.

All this money needs to be well spent.