Constitutional Convention

Lord Higgins Excerpts

Thursday 13th December 2018 Lords Chamber

[Lord Higgins (Con) (Valedictory Speech)]

My Lords, I congratulate the noble Lord, Lord Foulkes of Cumnock, on his speech and the Motion he has tabled. He has been fortunate to find time for it. I thank him most sincerely for his extremely kind remarks about me. They are greatly appreciated.

It has been noticeable with the relatively new practice of valedictory speeches that they are often attached to debates that have nothing whatever to do with them, but that is certainly not so in this case. I am here because of the significant constitutional change whereby it was decided that Members of the House of Lords could retire—after centuries and centuries when that was not so. I therefore find myself here today, having reached the conclusion that I ought to retire.

I should make it clear why. I am absolutely convinced, as many others have been, that the House of Lords is too large. The Lord Speaker has initiated a series of actions, including the reports from the noble Lord, Lord Burns, on how it can be reduced and that programme of reduction is now proceeding through various people retiring or by natural causes and so on. I have come to the conclusion that since I have always believed that one’s vote should follow one’s voice and that, if possible, actions should follow one’s vote, I should take action as part of the campaign that has been initiated to reduce the size of the House. That is my only reason for retiring, but I should also say that it would be quite absurd if existing Members decided that they should retire, for the reasons I have given, and we then find the numbers creeping up again. The crucial outstanding point in the report of the noble Lord, Lord Burns, is that once we have reduced the size there should be a cap on that size, regardless of complications with regard to the royal prerogative.

I was first elected to the House of Commons as the Member for Worthing on 15 October 1964. I had not stood before and, despite the assurances of my agent, I was very worried about what the outcome would be; in the event, I was elected with a majority of 18,883. I am glad to say that while that majority somewhat declined since, my former constituency, which was split up, is now represented by two outstanding Members of Parliament: West Worthing by Sir Peter Bottomley, and East Worthing and Shoreham by Mr Tim Loughton. I am happy to say that my former constituents are very fortunate to have such good Members of Parliament and very clever to return them with what are, even now, extremely large majorities.

I served in the Commons from 1964 to 1997— 33 years—and then in your Lordships’ House from 1997 until now, which is 21 years. That is a total of some 54 years and one naturally looks back at some events in that period. One that stands out is the problem with Rhodesia, over which I had some difference of opinion with my constituents culminating in a public meeting of 1,200 people. I do not think that kind of thing happens nowadays but, at all events, that was one problem. Another problem was with the Ugandan Asians. I was in government at that time and we had serious trouble with Mr Idi Amin. Various solutions were proposed, such as that we might have a better relationship with him if we made him a field-marshal in the British Army. That solution was rejected but Ted Heath set up a very small Cabinet committee consisting of Robert Carr, as Home Secretary, Paul Bryan and me to make recommendations. We came out by saying very strongly that the refugees from the crisis in that country should be admitted to this country. That has had considerable economic benefit to this country and it is something of which I am rather proud.

I made my maiden speech in the other place on the plight of old age non-pensioners who had been left out of the original scheme, but nothing happened until I arrived in the Treasury, when I was able to rectify that injustice and make sure that at least they got that part of the pension not covered by national insurance contributions.

Many things in political life are transitory, so one inevitably thinks about what one has done which might pass the test of time. I notice three in particular. One is decimalisation. I was put in charge of it on arrival in the Treasury in 1970. Ian Macleod had advocated a 10 bob unit. Jim Callaghan had argued for a pound unit, on the grounds of the international prestige of the pound, but a few weeks later he devalued the pound, which rather undermined his argument, and I was left with the problem when I arrived at the Treasury. We went ahead with the situation that we inherited and I think, on the whole, it has worked pretty well. Indeed, although the latest coin is very attractive compared with the ones I introduced, the situation has been resolved quite satisfactorily.

More important was the huge taxation reform I brought in with Ian Macleod by abolishing purchase tax and selective employment tax and replacing them with VAT. That has certainly stood the test of time. The basic rate is now double, or rather more, what it was when I introduced it. We went for a single positive rate with zero-rating for essential items so that the tax would not be regressive. The problem with that was that, as I carried the reform through the House of Commons, endless amendments went down stating that this or that item should be zero-rated, but we survived that, with one exception—children’s clothes and shoes. I see that some Members opposite remember that. An amendment had been put down by one of my colleagues to zero-rate it and I stood up to make my usual speech saying that it was a universal, wide-ranging scheme and so on, and then I received a note from the Whip saying, “Do you realise that everyone on this side is at the Royal Garden Party?”, so I succeeded in announcing that there would be a special inquiry into this item, and as a result children’s shoes and clothes are zero-rated, which they would not have been before.

I am conscious of the time. In the Lords I went straight on to the Front Bench when I left the Commons and served there for a period in opposition against Lady Hollis of Heigham, whom we all greatly miss as she recently left us. It is a huge advantage in opposition to have someone against you who knows all about the subject. Indeed, she knew more about the subject than anyone else in the world. It was a very enjoyable period in my political life. I sat on a number of committees, including the Committee on the Speakership, the Committee on the Conventions on the Relationship between the two Houses of Parliament and various other ad hoc committees, which I enjoyed. I have been particularly engaged with the Campaign for an Effective Second Chamber, which was initiated by my noble friend Lord Cormack and supported by my noble friend Lord Norton of Louth, both of whom are in their place. I think we are very grateful for the work which that all-party committee has done, which has certainly improved the constitutional changes that have been made. I hope there will be further constitutional changes in future.

I think it is true to say that your Lordships’ House is probably more effective now than it has been at any time in its history. It is making an outstanding contribution, it has taken on a great deal of the legislative burden from the other place—which I do not think is fully appreciated—and, generally speaking, it operates extremely well. It is an extraordinary place. The mass of expertise and experience that your Lordships devote to business of the House is very important. It is also a quite extraordinarily friendly place, which I have greatly appreciated.

In conclusion, I thank very much all the staff of the House—the badge messengers, the staff in the catering department and so on. If I may, I will say how grateful I am for the support I have received throughout from my wife and family. That is very important; one cannot do a good job here or in the Commons without it. I thank noble Lords for the kind remarks that I have received, and I appreciate very much the opportunity to say this today.

Referendums: Parliamentary Democracy

Lord Higgins Excerpts

Thursday 19th July 2018 Lords Chamber

Moved by

[Lord Higgins]

That this House takes note of the impact on parliamentary democracy in the United Kingdom of the use of referendums.

[Lord Higgins (Con)]

My Lords, our debates on Brexit have made frequent reference to referendums, but it seemed to me that the time had come to take a rather wider view of this issue. I am glad to see that a number of noble Lords who have added their names to the speakers list today take a similar view. I look forward with great interest to their comments, particularly the maiden speech from my noble friend Lord Pickles. He will give us a more up-to-date perspective on the view of those in the House of Commons on these issues than some of us who moved from the House of Commons to your Lordships’ House a long while ago.

There is certainly no lack of background briefing on this issue. The House of Lords Library has produced a splendid note, and only this month a massive tome, a report of the Independent Commission on Referendums, was published. In addition, there have been reports by your Lordships’ Constitution Committee and the Public Administration and Constitutional Affairs Committee of the House of Commons. The latter makes a particular study of the results and the effect of the Brexit referendum.

They all draw a certain amount of attention to the history of referendums in this country since 1975. Referendums were used very successfully by Hitler. Both Churchill and Attlee criticised the idea of them and, notably, Mrs Thatcher described referendums as,

“a splendid weapon for demagogues and dictators”.

While that reflected the immediate context of the time, I think there are still considerable concerns about the way in which referendums affect our democratic system. They are certainly popular with the electorate—perhaps to some extent reflecting the unpopularity of politicians —with the idea that they somehow get a direct feed in, even though in this country I believe we have politicians who are less out of touch with the electorate than in almost any other country in the world because of constituency meetings and so on.

I am concerned that the idea of referendums is constantly referred to as democratic. One can see the arguments in favour of that view but, in fact, it is not what we normally mean by democracy in this country. What we fundamentally believe in, I think, is the idea of representative parliamentary democracy where we elect Members of Parliament and, as Burke pointed out, they then take into account the views of their constituents together with their own judgment on any particular issue. One of the problems with referendums is the extent to which a Member of Parliament or a Member of your Lordships’ House can take into account the views which were expressed. This is somewhat inhibited if a major part of a decision—almost a central part of it—is taken by a referendum. It is noticeable that very few Members of Parliament have stood up and simply said that they reject the decision of this or that referendum.

The crucial issue here is whether the referendum is regarded as binding. I took part at great length in the debates in your Lordships’ House on the referendum Bill. What was clear at that time was that it proposed an advisory referendum, not a binding one. It is clear since then that the Government have regarded it as binding. The effect of that on the extent to which Members of Parliament can express an independent view is obviously very important.

The Prime Minister, soon after the result of the referendum, said very clearly we must “respect” it. Respect is a very interesting word. As far as the last referendum is concerned, there are lots of reasons for not respecting it. It was not a representative democracy, passed by an overwhelming majority of the population. It was a majority of those voting but quite clearly a lot of people did not vote because they realised that they did not fully understand the issues. Therefore, the argument that we must respect it also has to be seen against the background of a campaign that was riddled with lies from beginning to end—not least on the question of the Brexit premium. In addition, there is the recent discovery of the extent to which the finances of the leave campaign might have affected the result. To conclude that we must respect the result is very doubtful.

As far as that is concerned, we have to take into account whether it is binding or not. As I say, it is in danger of undermining rather than helping our democratic system. The report that I referred to from the House of Commons points out that critics of referendums warn that they may undermine parliamentary democracy, particularly so when there is a clear difference of view,

“between … a majority of the public and the majority of parliamentarians”.

It points out that this is probably the situation with the Brexit decision. So this, again, must give us some concern that referendums do not really help the operation of our democratic system—in fact, quite the contrary. I conclude from that that there are some serious problems that we have to face if we are to continue with the use of referendums, and there is a very strong case for the committees of both Houses to look at the issue in great detail.

One thing I am absolutely clear about is that I do not think there is a case for a second referendum on Brexit. We can do without another one, as it would again produce a very confused result. The right course of action at this stage is for Parliament to assert how the pieces of the chaos that have resulted from the referendum, not least in the last few days, can be put right. Parliament really must assert its influence more strongly over the way in which things develop in the present situation. Therefore, the case for referendums becomes increasingly doubtful. At all events, I think that we need to tighten up the rules.

I was surprised to discover in the briefing the existence of the Political Parties, Elections and Referendums Act, which I had not previously come across—I may not be alone in that. That could perhaps be amended to cover certain issues. I will always regret that during the passage of the referendum Bill through your Lordships’ House, I did not put down an amendment to cover thresholds for both the turnout and the majority. We might have been in a very different situation today had I done so, but I thought that if I did, it would inevitably make the result of the referendum mandatory rather than advisory. None the less, I think that there is a case to be made, perhaps by the relevant committees, for saying that we should not have any referendum in future without thresholds for the turnout and the majority.

I conclude by saying that we certainly need further study by the committees to sort out the present problems that I have referred to. However, I am also influenced by the fact that I spend a considerable amount of my time in the Netherlands, which has had a rather bad experience with a referendum relating to Ukraine. It has been a real problem for the country, so the political coalition in the Netherlands has decided to introduce a measure to ban, flat out, the use of referendums, including advisory referendums. As I said, the difference between advisory and mandatory referendums is very blurred. As I understand it, this had already gone through the lower House of the Parliament in the Netherlands, but there was then a move to have a referendum against having a ban on referendums. This was obviously rather controversial. The result is that there have been further disputes and the matter has gone to the Supreme Court, which has come to the conclusion that you cannot have a referendum banning the use of referendums. That, as I understand it, is the present situation and we will have to wait to see what any appeal against the Supreme Court decision brings.

That brings out the important point that we should consider to what extent the use of referendums in our country undermines the normal representative parliamentary system, in which we have such faith and which I think is unequalled in the world, not least in protecting minorities. One of the great problems with referendums is that they take no account whatever of minorities. They have been described as the dictatorship of the majority, and I think that that is indeed the position, not least as far as the latest referendum is concerned.

I believe that we should consider all these issues very carefully and I hope that the debate will seek to clarify them further. Given the amount of interest in this issue by way of background papers and so on, this is clearly an appropriate moment for us to consider to what extent we should continue to use referendums and, if we do, in what form. I beg to move.

[Baroness Stedman-Scott (Con)]

My Lords, time is very tight in this debate, and I respectfully ask all noble Lords to comply with their speaking times.

--- Later in debate ---

[Lord Higgins]

My Lords, I was delighted and surprised to be fortunate in the Motions ballot. I am glad that my choice of subject produced a debate of such exceptional quality, even by your Lordships’ high standards, particularly with two outstanding maiden speeches from my noble friend Lord Pickles and the noble Lord, Lord Anderson of Ipswich.

The Minister’s reply is very important. What has come out very clearly is that our experience of referendums, since they started and more recently, shows that there are a great many lessons to be learned and mistakes to be avoided. As my noble friend on the Front Bench just said, it is worth considering all the points made today and then seek to codify them to some extent, so when we next come to consider whether we should have a referendum and how it should be carried though it will be precisely on that rule book.

In that sense, I hope that this will be a memorable debate. I am most grateful for all the kind remarks that colleagues have made about me. I am very glad that this has been a debate that should have value in future, as well as reflecting what has happened in the past.

Motion agreed.

Carillion

Lord Higgins Excerpts

Monday 15th January 2018 Lords Chamber

[Lord Young of Cookham]

I am trying to find the appropriate information—and I have now found it. It says that it is likely that the majority of pension schemes will transfer into the PPF with a consequential effect on members’ benefits. Pensioners receive 100% compensation and non-pensioners receive 90% of their accrued pension, subject to an overall cap, which is what I think I said in response to an earlier question. If by any chance this briefing is wrong, the person who wrote it will be writing very quickly to the noble Lord. On the broader issue, the Pension Protection Fund is funded by a levy on all pension funds, and I am confident that it has the resources to take on board the liabilities it is likely to inherit from Carillion. The PPF will, of course, get the assets of the scheme, which, at the time of the last audit, were worth £2.267 billion.

[Lord Higgins (Con)]

My Lords, following up the point on pensions, clearly a heavy burden will fall on the Pension Protection Fund. If I understand what my noble friend says, there are a number of individual pension funds involved. What is the position of the trustees of each of those, and will an inquiry be made into the extent to which they have fulfilled their obligations?

[Lord Young of Cookham]

That is a very good question and I hope that whoever has the responsibility for making sure that the trustees do their job—it is probably the Pensions Regulator—takes my noble friend’s question on board. There are 14 separate defined benefit pension schemes involved, which the Carillion group acquired as it expanded. Overall, there is a significant pensions deficit of £523 million as at 2013—some estimates indicate that it is now up to £1.6 billion. Perhaps I could write to my noble friend about the responsibilities of trustees, because I do not want to imply in any way that they have not been conscientious in discharging their responsibilities.