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Lords Chamber

Volume 728: debated on Wednesday 15 June 2011

House of Lords

Wednesday, 15 June 2011.

Prayers—read by the Lord Bishop of Chichester.

International Widows Day


Asked by

To ask Her Majesty’s Government what plans they have to mark the first United Nations International Widows Day on 23 June.

My Lords, while the Government are not planning a specific event on International Widows Day, we continue to work with our UN partners to raise awareness of the issues facing widows. We take a proactive role in promoting gender equality through engaging in International Women’s Day. The Government of course recognise that widows of all ages are among the poorest and most vulnerable in societies across the world. That is why, in our country programmes, we continue to provide support to widows.

My Lords, I am disappointed with the reply. My foundation—I declare an interest as the founder member of the Loomba Foundation—commissioned international research that concluded that there are more than 245 million widows supporting nearly 500 million children who are disadvantaged and living in poverty. The issue has been identified by the United Nations, which has designated 23 June as International Widows Day. It surely should have been possible to ring-fence funds. The issue should at least have been included in the millennium development goals. Why has this not happened?

My Lords, I start by congratulating my noble friend on the vital work of the Loomba Foundation in supporting widows. I declare an interest as a trustee of one of my noble friend’s charitable organisations. The UK takes a leadership role through our diplomatic and development work in supporting poor and vulnerable women and promoting their economic, social and political empowerment. We support widows through broader programmes working on women’s empowerment, asset ownership and inheritance rights, and, through this, the targeting of cash-transfer programmes. The Government are targeting all women, including widows.

Widows in post-conflict situations, particularly in many countries in Africa and the Middle East, are in a particularly vulnerable position. Some of the widows are extremely young, many are in reality punished for the death of their husbands, and their future is very bleak. Will the Minister assure us that their needs will be taken fully into consideration?

The noble Baroness of course raises a number of very important issues. Through DfID, as she is aware, we are making sure that our work in each country programme has a focus on trying to ensure that women and girls get the right directions, and the means and support, to be able to engage in both civic and political involvement. For example, we are working to increase the number, influence and capacity of women in Afghan public life, through the Afghanistan Sub-national Governance Programme. In this way, we feel that they will be in charge of their own destinies while receiving support from us.

The Minister is well aware that if we had more women at the peace table in post-conflict times, we know that widows would be taken care of much better. At present, it is men on both sides who say that they do not want women at the peace table. If there were women at the peace table, we would be able to ensure that women and widows in post-conflict areas would have schools for their children, proper medical aid for them and the chance of getting work through investment into those countries. At present, none of that is happening, except in a very few areas. It is very important that our representatives at the UN and in post-conflict areas do that.

The noble Baroness has made some absolutely valid points; in fact, she has answered her own question for me. The noble Baroness is absolutely right. That is why, through DfID, the FCO and the MoD, we try to work to ensure that there is full representation through all our programmes and that in all we are doing the presence of women is visible. We are of course aware that there are places where that is much more difficult, but we will continue to work with Governments to ensure that, through our support, they are able to do that.

My Lords, what steps are the Government taking to encourage, support and increase the political participation of women in the Arab spring?

My Lords, that follows on very neatly from the question from the Benches opposite. We remain concerned that women seem not to be present in the negotiations and at the forefront of political life, whereas they were very present during the revolution and demonstrations. DfID and FCO have committed to more than £110 million over four years to support political and economic reform across the region. Our department will be looking at how gender will be represented there.

My Lords, our widows are also international widows. This year, the War Widows’ Association of Great Britain celebrates its 40th anniversary. I suggest to the Minister that those extraordinary women, to whom we owe so much because their partners have paid the ultimate sacrifice, might wish to mark the first United Nations International Widows Day with a clear statement from the Government that they will not seek to overturn the amendment passed in this House on the Office of the Chief Coroner, a role of great importance to war widows and their bereaved families.

My Lords, I accept that the question is very important; I need to take it away and write to the noble Baroness in response.

My Lords, does the Minister recognise that in bringing up children an important problem for many mothers, including widows, is finding good male role models, perhaps particularly for their sons? Will she take this opportunity to pay tribute to the men who step into those roles, particularly male school teachers and perhaps male physical education teachers?

My Lords, the noble Earl is absolutely right. Issues regarding gender will never be resolved unless we take on board the important work and commitment undertaken by both men and women. I completely accept what the noble Earl says. By and large, we are trying to work closely to ensure that the engagement is not just with women and girls but with boys and men too.

My Lords, I emphasise the point made by several other noble Lords, the importance of dealing with the needs of tens of thousands of widowed women as a result of decades of conflict in central Africa, in the Congo and elsewhere. What specifically are the Government doing in relation to the educational needs in the civic development of those women so that they can participate in the full life of their communities and protect the future of their children?

As my noble friend knows through our meetings with DfID, every programme we have in every country that we are supporting has mainstreaming of gender. I think he agrees that it will take time to see the results. We are very aware that we have an uphill struggle and that it will be hard, but we will persevere.

Northern Ireland: Bill of Rights


Asked by

To ask Her Majesty’s Government, following the recent elections to the Northern Ireland Assembly, what discussions they will hold with the political parties regarding the promotion of a Northern Ireland Bill of Rights in accordance with the 1998 Belfast agreement.

My Lords, as my right honourable friend the Minister of State for Northern Ireland recently made clear in the other place, we want to see this issue resolved and will be taking the views of the new Executive, political parties and others in Northern Ireland on how best to move matters forward.

My Lords, that is a smidgen of an improvement on the Answer given the last time I raised this question, and I suppose that that is progress. Can my noble friend tell me frankly whether the Government are going to continue the previous Government’s policy of kicking this issue into touch, or when we might have some positive progress on implementing this last aspect of the Belfast agreement?

My Lords, I cannot give any specific dates or times. Civil servants have already talked to people in the human rights fraternity in Northern Ireland, and the next job is to get involved with the Assembly and to get things moving. I said on the previous occasion, and I repeat now, that with the new Assembly there is an opportunity to break into this issue, which I understand is of long standing. It is important that we move forward.

My Lords, does the Minister recall that, when we negotiated the Belfast agreement, we had it specifically written into the agreement that there would be progress on human rights not only in Northern Ireland but in the Republic of Ireland? When will the Government make representations to Dublin to have the obligations under the Belfast agreement honoured after 13 years?

My Lords, I cannot answer for the Government of Ireland. However, as I indicated on the previous occasion that the noble Lord, Lord Smith, raised this question, I wrote to the Government of Ireland to let them know of the concerns of the noble Lord, Lord Kilclooney. Your Lordships will note that, regardless of there being, in the noble Lord’s words, no progress, an Irish Human Rights Commission has been set up and is very busy in its work.

My Lords, does the Minister agree that this issue of a Bill of Rights for Northern Ireland has been going on for many, many years? Can he confirm that the Government will not allow any one political party in the Assembly to veto progress towards the commitment that we entered into?

My Lords, I cannot give guarantees but I do not believe that there ought to be vetoes. The Belfast agreement is clear. Of course, one highly significant party in Northern Ireland was not party to the Belfast agreement. Nevertheless, it is important that this matter, which is almost the final piece of the agreement, has not really been tackled. It is a tricky issue. The noble Lord will recall that his own Government had a bit of bother with it; 12 years on, we have not got too far with it. However, because we have now had another election in Northern Ireland, there is an opportunity to make a fresh start, which the Government are very hopeful of doing.

My Lords, perhaps I may suggest to my noble friend that we would all benefit from a close reading of the terms of the Belfast agreement on this point? Those terms make it clear that the core of any possible Bill of Rights for Northern Ireland is to be the European Convention on Human Rights, possibly together with some supplemental matters to reflect the special circumstances in Northern Ireland. That is open to a lot of interpretation, and is there not a very clear and quite principled disagreement between the major parties in Northern Ireland on its interpretation?

My Lords, people can interpret these things differently. However, the agreement of 10 April 1998 quite clearly talks about rights supplementary to those in the European Convention on Human Rights to reflect the particular circumstances of Northern Ireland. It states:

“These additional rights to reflect the principles of mutual respect for the identity and ethos of both communities and parity of esteem, and—taken together with the ECHR— to constitute a Bill of Rights for Northern Ireland”.

Those are the words of the Belfast agreement.

My Lords, the Government said, as the noble Lord has confirmed, that they would return to the issue of the Bill of Rights following the election of the new Assembly and Executive, which are now in place. The Prime Minister has also written that he stands ready to facilitate agreement. Can the noble Lord inform us—I have not got this from his answers so far—of the actions taken by the Government to date, following the elections, to facilitate that agreement? Also, what discussion have the Government had with the commission on the UK Bill of Rights on the Northern Ireland Bill of Rights?

My Lords, I am not certain about discussions with the new UK commission. It is involved throughout the United Kingdom. It has sought people to help it from Northern Ireland, Scotland and Wales. I do not think I am able to say that any further work has been done, but talks about talks are going on. I mentioned that civil servants have already been to Northern Ireland to get things moving. It is only a matter of weeks since the Stormont election and there could be criticism of the time, but this is on a different scale from the 12 years that elapsed under the previous Administration.



Asked by

To ask Her Majesty’s Government what is their assessment of the recent speech by the United Nations Secretary-General on the lack of progress towards a political solution to a divided Cyprus.

My Lords, the United Nations Secretary-General has made it clear that a solution will take compromise and flexibility from both sides. We hope that both leaders take advantage of the meeting with the United Nations Secretary-General, or his representative, on 7 July, and the period leading up to it, to work jointly and concretely towards reaching a mutually acceptable, lasting settlement. We will lend whatever support we are able to in the hope of bringing the negotiations to a successful conclusion.

I thank my noble friend for that reply. He will be aware that United Nations’ peacekeeping troops have been in Cyprus since 1964 and that inter-communal talks have been going on intermittently since 1967. Post the 2004 Annan peace plan, which was rejected by the Greek Cypriots, the Turkish Cypriots remain isolated, while Greek Cypriots are in Europe and are to take over the presidency of the EU next year. If the latest round of talks fails, will it be time to look at other solutions, and is a divided Cyprus in Europe desirable or sustainable?

Obviously we hope that the next round of talks will make progress. As the noble Baroness knows, the talks will take place under Alexander Downer, a former Australian Foreign Minister, whom many of us know. I am sure that he will preside skilfully and try to get some advance and agreement. On the role of the Republic of Cyprus in the EU presidency next year, we are confident that it will fulfil its responsibilities under European legislation, as it is required to do. I do not think we need have worries on that score. My noble friend is quite right to say that this has been going on for years—almost back into distant memory—and we long to see real and positive progress, but we think that the UN Secretary-General’s procedures are the right ones to follow to achieve a better base.

Have there been any developments in the Apostolides v Orams case since the Court of Appeal upheld the European Court of Justice ruling that the judgment of the courts in the Republic of Cyprus had jurisdiction in the Turkish-occupied part of the island? Is it still the Government’s view that British subjects who consider buying property in the north should exercise the greatest care in ensuring that they are entitled to buy that property?

On the latter point, it certainly is the Government’s view that the greatest care should be exercised. A complex and sensitive issue of the Cyprus problem is the question of title deeds. Our advice has been to give very clear guidance and to take great caution when purchasing property in Cyprus. I cannot comment particularly on the Orams case at the moment, but the British High Commissioner in Cyprus has raised this issue with the Republic of Cyprus Ministry of the Interior and received assurances that the Cypriot Government intend to introduce a Bill to address the overall problem of finding that the people from whom you bought a property were not the legal owners. I recognise that the issue has affected a large number of British citizens who purchased property in Cyprus. Ultimately, this is a matter for the Cypriot Government.

My Lords, does the Foreign Office remember what the Akritas plan was? If so, will the Minister tell the House where else within our sphere of influence has an entire national identity been shunned and isolated, as the Turkish Cypriots’ has been for 37 years for resisting the Greek Cypriot plan to ethnically cleanse them?

I think that I can safely say that the Foreign and Commonwealth Office has a pretty long memory about many of these issues. In some cases, as we know from a recent announcement, some of the files were not immediately available but recently have become available about those dark days in the past. The noble Lord is taking us back to many plans and arrangements, going right back to EOKA itself, which ended in tragedy and difficulty and have underpinned the situation we have today of a divided island. The best thing to do is to put these matters behind us and try to build a positive and creative atmosphere in which we can overcome the still considerable range of problems to bring about the end of this island partition and the proper emergence of a bizonal, federal Cyprus.

My Lords, does the Minister agree that the biggest practical problem facing Cypriots wanting to reunify is the difference in GDP between the two halves of the island, and that the best way of improving things on the Turkish Cypriot side would be for the European Union to implement the direct trade regulation? Can the noble Lord assure us that the Government will really push for this particular measure, which is practical and offers part of a solution?

I have two points in answer to my noble friend. First, the EU is putting a considerable volume of funds into northern Cyprus, precisely with the thought that when the happier days come, the disparity in incomes will be somewhat overcome. I have a figure here of €259 million, I think, for the current year, a very considerable sum indeed. That may be over two years, actually. So on that side things are being done. As to the problem of trade between Turkey and the rest of the EU and the bar on the use of Turkish ports by EU or Greek Cypriot shipping in response to the fact that the EU appears to have pursued a policy of isolation of northern Cyprus, that is a very difficult issue. There is a stalemate at the moment, with each side waiting for the other to move. However, I agree with my noble friend that if we can get movement on that front on both sides, trade and prosperity will open up and the problems of northern Cyprus will be further alleviated.

May I urge the Minister to continue the support of the United Kingdom for the United Nations recommendation over many years that the answer to the problem in Cyprus is a bizonal, bifederal state based on political equality and that any other solutions simply will not work? It is easy to blame other powers in the region for doing this or that, this year or last year or whenever, but the real answer is that given the active support of the new Turkish Government and the Greek Government and especially in the light of the better relations that now exist between them, they should take the lead to encourage the leaders of both communities in Cyprus that a solution is almost a hand’s reach away if they simply make up their minds to get down to doing this and giving it a try.

The noble Lord speaks complete sense, and I agree with very nearly everything he says. Obviously, we have hopes: there is a renewed Government in Turkey, which is playing as a nation a responsible and forward part in the global agenda and certainly the agenda of the entire region. We must look to the Turkish Government to play their part; we must also look to Athens to the Greek Government, who have many problems on their plate at the moment, to be constructive. There is absolutely no doubt that with the right spirit in Athens and Ankara, we really could make progress in this very long-standing problem.



Asked by

My Lords, we are deeply concerned by the situation in Abyei and the current violence in Southern Kordofan. We call for an immediate cessation of violence and urge the parties to work through the African Union-facilitated negotiations to resolve their differences. Michael Ryder, the UK special envoy to Sudan, is in Addis Ababa today, supporting these talks. We are particularly concerned by the humanitarian impact and the lack of access for humanitarian agencies. We strongly urge the Sudanese armed forces from the north and the Sudanese People’s Liberation Army to allow humanitarian agencies immediate access to those who most need their help.

I am very grateful to my noble friend for that Answer. Does he agree that the situation unfolding in Southern Kordofan is creating a major threat to regional stability? Will he confirm recent reports that of the 60,000 people in Kadugli, 40,000 have fled from the heavy fighting, which has included bombing and strafing by the Sudanese army; and that some 10,000 are now stranded on the roads without sustenance of any form? Will he confirm also the eye-witness reports of the Sudanese army going from house to house, pulling out opposition supporters and local officials and executing them? Will he confirm that UNMIS has completely failed to protect civilians and assure the House that we, as major donors to northern Sudan, will apply every pressure we can to ensure the restoration of peace, the protection of civilians and the securing of access to humanitarian aid before independence on 9 July?

My noble friend obviously follows these matters extremely closely. Of course I can confirm his last point; we will use every possible endeavour and will hope that the talks going on under the AU implementation panel in Addis Ababa will begin to lead to a calming down of the situation, and to the necessary humanitarian access that at present is being denied. My noble friend asked whether I could confirm various reports. Obviously, in detail, I cannot. What I can say is that we have had a range of reports with horrifying elements to them. We completely deplore the bombing of civilians by the forces of Sudan and Khartoum. All these developments must cease—there must be an immediate cessation of this kind of fighting—so that we can get back to what we hoped would be a pattern of peace under the comprehensive peace agreement, so that Southern Sudan can move towards its independence day on 9 July.

My Lords, is the noble Lord aware that there is reliable evidence, including photographic evidence, of the aerial bombardment of civilians in Southern Kordofan, including the use of helicopter gunships to chase civilians like wild animals; and that there are reports of UNMIS forces standing by while northern soldiers kill civilians in front of them? Will the Minister indicate whether Her Majesty's Government will press the UN Security Council to take effective action to ensure that UNMIS forces will be effective in their role, and also to give serious consideration to the priority request of local people for a no-fly zone?

The noble Baroness is right when she confirms what I said about the bombing, which we deeply deplore. On the question of UN action, there are proposals that may be moving towards a resolution, but of course resolutions do not necessarily deliver the goods. What is needed is a much stronger operation. UNMIS needs reinforcement and has had some already—although it has not been a total success in protecting civilians from the atrocities that the noble Baroness describes. There is also some hope—perhaps that is too strong a word and I should say some movement forward—to be gained from the agreement that appears to have been accepted in Khartoum that an Ethiopian, non-UN force should intervene in Abyei to try to bring peace and to stop any further fighting and conflict arising both from tribal differences and differences between the north and south.

My Lords, does the Minister agree with Archbishop Deng, the archbishop of the Episcopal Church of Sudan, that the situation at the moment has all the hallmarks of ethnic cleansing and potential genocide, and that this adds a very particular urgency to the need for effective international action to bring an immediate end to the bloodshed and also to secure a long-term, lasting peace?

I agree with the right reverend Prelate. I do not think that there is any doubt that this is a very serious situation, with some extremely ugly developments, and that it needs very urgent action by both north and south—but particularly by the northern forces, which are using heavy weapons to attack civilians in a completely unacceptable way.

My Lords, in the past few days we have heard a number of responses to the terrible situation in Southern Kordofan: the White House has talked about crimes against humanity and the targeting of individuals on ethnic grounds; and the most reverend Primate the Archbishop of Canterbury has described what he calls “government-supported terror” and “another Darfur”. However, from our Foreign Secretary we have had only a short Written Statement which talks of his concerns and condemnation. In response to such appalling atrocities, surely we have a right to expect more assertive words from the British Government, and a commitment to urgent action, such as, particularly, a movement to Chapter VII of the UN Charter.

I am the first to salute the noble Baroness’s concerns in this area, but I do not think that she is being quite fair. My right honourable friend the Foreign Secretary has spoken out about these matters both at Foreign Office Questions and in quite long Statements, and I know that it is a major preoccupation. Possibly the best evidence of his close preoccupation with these extremely worrying concerns is that he will attend the independence on 9 July, in Juba, together with other international leaders; the full support which is already reflected in our substantial consulate-general, to be an embassy, in Juba; the extremely close, daily involvement of our officials in the whole operation; and the very substantial aid programmes which we offer both to the new South Sudan as it emerges and to address the continuing problems of north Sudan—providing, I should add, that they, in a sense, follow more responsible policies and cease these hideous, open and atrocious attacks on unarmed civilians.

Undertakings for Collective Investment in Transferable Securities Regulations 2011

Gender Recognition (Approved Countries and Territories) Order 2011

Legal Services Act 2007 (Appeals from Licensing Authority Decisions) Order 2011

Legal Services Act 2007 (The Law Society and The Council for Licensed Conveyancers) (Modifications of Functions) Order 2011

Co-operation in Public Protection Arrangements (UK Border Agency) Order 2011

Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011

Pensions Act 2007 (Abolition of Contracting-out for Defined Contribution Pension Schemes) (Consequential Amendments) (No. 2) Regulations 2011

Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No. 2) Order 2011

Motions to Refer to Grand Committee

Moved by

Motions agreed.

Consumer Insurance (Disclosure and Representations) Bill [HL]

Second Reading

Moved by

My Lords, a Second Reading Committee considered the Bill in the Moses Room on Monday 13 June, and I therefore beg to move this Motion formally.

My Lords, I regret very much having missed the Second Reading debate on Monday—somehow it escaped my notice. It was a most interesting debate and I should like to have taken part. All I will say now is that this Bill was very well chosen for the new Law Commission Bill procedure and I hope that there are others like it in the pipeline. I support the Motion.

Motion agreed.


Moved by

Motion agreed.

Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill

Order of Commitment Discharged

Moved by

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Motion agreed.

European Union BillReport (3rd Day)3.40 pm

Clause 18 : Status of EU law dependent on continuing statutory basis

Amendments 32 to 32B not moved.

Amendment 33

Moved by

33: Leave out Clause 18 and insert the following new Clause—

“Status of EU law dependent on continuing statutory basis

By virtue of the European Communities Act 1972 directly applicable or directly effective EU law (that is, the rights, powers, liabilities, obligations, restrictions, remedies and procedures referred to in section 2(1) of the European Communities Act 1972) falls to be recognised and available in law in the United Kingdom.”

My Lords, this amendment relates to Clause 18, which is in the nature of a declaratory clause setting out the position that the Government believe, and I entirely agree, that the operation of European law in the United Kingdom depends on the European Communities Act 1972, which is of course referred to in the clause as proposed by the Government. It is important that this declaratory measure should be made because of the theory sometimes propounded that Community law in the United Kingdom derives from the treaty alone by virtue of the European Union legal order. I believe that it is right that we should make it plain at this juncture that that is not so and that the enforcement of European law in this country is due to the enactment of the 1972 Act.

This may seem theoretical but it is perfectly possible that it might have some practical effect in the event of the passerelle clauses in the Lisbon treaty being adopted. I believe that, ultimately, the question of whether a particular piece of European law applies in the United Kingdom depends on United Kingdom statute. Therefore, the ultimate decision would be for the courts of the United Kingdom. Of course, these courts would take account, no doubt, of any relevant decision of the European Court of Justice in Luxembourg, but this is certainly a possibility. For my part, it is useful to make clear that in our country the law of the European Union is here by virtue of the sovereignty of our Parliament in enacting the 1972 Act. It is also very plain that the 1972 Act was very skilful legislation. For that we must be indebted, primarily, to my noble and learned friend Lord Howe of Aberavon.

My difficulty with the clause as drafted is that it opens with the suggestion that an Act should be referred to. We discussed this in Committee, when I moved an amendment of the same kind as I am moving today. The answer was that European law is not enforced in the United Kingdom solely by reference to the 1972 Act because a number of other statutes seek to do this, which my noble friend Lord Howell listed. Whether he is asserting that that is a complete list, I am not certain, but at least it is quite a long list. As I understand it, the important thing about these Acts is that they use the definition of Community law and Community treaties derived from the 1972 Act. Therefore, if the 1972 Act were repealed, they would be deprived of content in so far as they seek to impose European law in our country. The question arises in connection with, for example, the devolution statutes, where provision is made for ensuring that the devolved Administrations do not go off the rails in relation to Community law. That may or may not be a risk, but at any rate it is one for which it was thought wise to make provision.

The situation is that apparently there are a number of other Acts which use the European Communities Act 1972 for definition purposes. The Interpretation Act makes it clear that where a phrase such as “Community treaties” is used in a later Act, that is the meaning that is to be attributed to the phrase. If the European Communities Act 1972 were to be repealed, the definitions would be absolutely empty and these other Acts would have no effect. I therefore submit that it is amply sufficient to mention the 1972 Act and that the phrase “an Act” is certainly capable of a variety of interpretations, to some of which the noble Lord, Lord Kerr of Kinlochard, referred in Committee. For myself, I do not think that the Government intended any sinister meaning, but they have used an extraordinary shorthand in saying “an Act” when apparently they meant a list of Acts. It is much clearer and more effective to alter “an Act” to the Act that we know is responsible; namely, the 1972 Act.

I am grateful to my noble friend Lord Howell and the noble and learned Lord, Lord Wallace of Tankerness, for meeting me to discuss this matter. There is very little between us on the point of principle, but it is quite important that this singular and central Act should be the pillar of our understanding of the basis on which Community law applies in this country and that the idea that we have submitted to Europe without the sovereignty of Parliament being behind it is absolutely incorrect. A clear assertion of the Act which does this would, in my submission, be extremely useful. To water it down or make it ambiguous by referring to “an Act” is unfortunate. I beg to move.

My Lords, I shall be brief because the argument I would have made has just been expressed much more clearly than I could have done, thanks to the legal wisdom of the noble and learned Lord, Lord Mackay of Clashfern. He referred to my concerns and suspicions about the use of the generic term “an Act” rather than a straightforward reference to the 1972 Act. I am concerned that there might be some sort of dog whistle motive here in that there could be an indication, for those who wish to hear it, that we might be able to disapply a particular future Act if we were to choose to dislike it. I am sure that that was not the Government’s motive. I share the scepticism of the noble and learned Lord, Lord Mackay, about whether that could be the motivation, because it would be completely misleading.

Directly applicable EU laws apply in this country for as long as we do not repeal the 1972 Act. The converse is the case, of course, as the noble and learned Lord has explained. It all hangs on the 1972 Act. The present clause even refers to the definitions in the 1972 Act, so if we repealed that Act, all directly applicable laws would cease to have effect in this country and we would be leaving the European Union. Why do we not just say that?

In my heart, I would like to have no Clause 18 because in principle I do not like declaratory clauses. My head tells me that we cannot get rid of it and therefore we have to get it right. That is the case for Amendment 33.

There is just one little matter that puzzles me and I would be very grateful for my noble and learned friend’s help on it. If Amendment 32B is read along with Amendment 33, it seems to suggest that Amendment 33 covers all the ground in Clause 18 but merely puts it better. In fact, Amendment 33 does not address one of the matters which Clause 18 seeks to address; that is, the suggestion that EU law may be binding on us quite irrespective of any Act of Parliament. I wonder what my noble and learned friend’s answer is to that, because I do not think that his Amendment 33 covers one of the matters which Clause 18 seeks to address. The argument advanced by counsel in the metric martyrs case suggested that EU law was binding on this country quite apart from any Act of this Parliament.

I have added my name to the amendment. When I was young and at the Bar I remember that there was a High Court judge all of whose judgments were two words: “I agree”. I shall do my best to follow that admirable example as I agree with the analysis of the noble and learned Lord, Lord Mackay of Clashfern. I want to add a couple of things. First, paragraph 114 of the Explanatory Notes refers to a case that I was in more than 30 years ago, Macarthys Ltd v Smith, in which Lord Denning set out the exact position recited in that paragraph. The Explanatory Notes recite:

“As Lord Denning noted in the case of Macarthys Ltd v. Smith … ‘Community law is part of our law by our own statute, the European Communities Act 1972. Community law is now part of our law: and whenever there is any inconsistency, Community law has priority. It is not supplanting English law. It is part of our law which overrides any other part which is inconsistent with it.’”

That is exactly what this amendment puts into statutory language. The 1972 Act, the brilliant Act, if I may say so in his presence, introduced by my noble and learned friend Lord Howe of Aberavon, is the organic Act. That Act is the parent. It is that Act which made sure that the binding force of European Community law would not be directly as a result of judgments of the Luxembourg Court but would be directly as a result of the Geoffrey Howe Act. That is what is said here. To recite further Acts which have come in afterwards by way of a list, as the noble and learned Lord, Lord Mackay, has indicated, is inappropriate.

It seems a long time since we discussed Clause 18 at Second Reading and in Committee. I would recall that it is only tenuously linked to the referendum lock clauses. It has been described as the parliamentary sovereignty clause, but it is perhaps best described, as in the words of the Bill, as a clause on the “status of EU law”. It is a declaratory provision which confirms—it does not establish—that directly applicable or directly effective EU law takes effect in the UK only as a result of an Act of Parliament. Some people do not like declaratory provisions in legislation, but the Government may certainly propose such a clause if they think it has importance in maintaining public confidence by confirming, for the first time in statute, our existing treatment of EU law within the UK’s domestic legal order. It is consistent with the decisions of our courts, notably by Lord Denning in Macarthys Ltd v Smith in 1979.

Amendment 32B has not been moved, so Clause 18 is in the Bill and we have a choice between the Government’s text and the revised text proposed in Amendment 33, which refers specifically to the European Communities Act 1972 rather than to an Act of Parliament. The Explanatory Notes to the Bill state that the words,

“by virtue of an Act of Parliament”,

cover UK subordinate legislation made under Acts and also Acts and measures of the devolved legislatures in exercise of the powers conferred on them by the relevant UK primary legislation.

That is the description, but will the Minister say—this is the same point that has been broadly covered by the noble and learned Lord, Lord Mackay— whether that is the specific reason why these words were chosen in the Government’s text? As everything seems to come back to the European Communities Act 1972, would the reference to that Act in the text of the amendments not also cover subordinate legislation and Acts of the devolved legislatures? That is what has been stated and I should like the Government to confirm whether that is the case.

Before my noble friend sits down, does he not agree that however elegant may be the language of Amendment 33 and although it states clearly that EU law is binding in this country because of the 1972 Act, it does not scotch the proposition that EU law may be binding for other reasons. That is surely the point. It says only that EU law is binding because of that because we know it. What we want to be sure of is that the argument that EU law may be binding other than for that reason is not allowed to fly.

I do not agree with that. I think that the point is fully covered by the declaratory provision that the Government have put forward and the possible amendment of it.

My Lords, I, too, support the amendment. It removes the obscurity and the uncertainty in Clause 18. My answer to the question that has been posed twice now by the noble Lord, Lord Waddington, is that the amendment is clear. It is “by virtue” of the 1972 Act and therefore by virtue of nothing else that EU law is recognised and available in law in the United Kingdom. It cannot mean anything other than that. The clarity is provided, in my opinion, by the amendment. The noble and learned Lord, Lord Mackay of Clashfern, explained that the answer given by the Minister in Committee about why the clause refers generally to an Act of Parliament rather than to the 1972 Act was because there are other uses of primary legislation, such as the Equality Act, that give effect to aspects of EU law.

I will add to the noble and learned Lord’s explanation about why it is not appropriate for Clause 18 to be drafted in this general manner. First, the constitutional concern that Clause 18 seeks to address and to which he referred does not arise out of the fact that Parliament has on occasions chosen to refer to EU law obligations. The constitutional concern—and I do not share this concern—is that the 1972 Act generally imports EU law rights, powers, remedies and so forth into United Kingdom law without the need for specific enactment. If Clause 18 has any purpose at all it is to emphasise that just as Parliament created this status for EU law by the 1972 Act—and it was only by the 1972 Act—so Parliament may take it away.

The other reason why it is appropriate in Clause 18 to focus on the 1972 Act and not generally is that the 1972 Act did not just give legal effect to EU law rights by Section 2(1). Section 3 provides for recognition by English courts of EU treaties and instruments, and for such matters to be questions of law to be determined in a court in accordance with the decisions of the European Court of Justice.

There is no doubt whatever that, if Parliament were to decide in future to repeal or modify the 1972 Act or create exceptions to it, and were to do so unambiguously in primary legislation, then the courts of this country would give effect to that political decision. I share the doubt of the noble Lord, Lord Kerr, that Clause 18 is needed at all. I am concerned that to enact Clause 18 will wrongly suggest that in its absence there would be any room for real doubt on this subject. If we must have Clause 18, then let us not add to the confusion and obscurity. Let us be clear about this. For that reason, I support the amendment.

My Lords, I rise with some hesitation for the second time on the Bill, partly because I do not have with me the actual 1972 Act—nobody else has quoted it. That quite clearly provides for the incorporation, as the noble Lord has just said. I am being offered a copy of it. It speaks for itself as follows, under the title, “General implementation of Treaties”:

“All such rights, powers, liabilities, obligations and restrictions from time to time treated or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly; and the expression ‘enforceable Community right’ and similar expressions shall be read as referring to one to which this subsection applies”.

Nothing could be more comprehensive or comprehensible than that. I emphasise the three words, “without further enactment”.

I repudiate any tributes that may have been paid to me. I did not draft that. It would have been wholly beyond my capability then and indeed now to draft a provision of such clarity and formidable length as that. If we must pay tribute to the author, it was the senior parliamentary counsel, Sir John Fiennes. It was a truly remarkable Act. It is absolutely clear and it is one of the foundations of the treaty to which we belong. I cannot really say anything more than that. It suffices to rest content with the re-enactment, as it were, of the recognition of another time for something that has been the foundation of our membership of the European Community from the outset.

If I may be less than frivolous and make a sad observation, a memorial service takes place in Gray’s Inn at 5 pm this evening and I hope that the House will forgive me if I do not remain until the end of the debate on this proposed new clause if it lasts that long.

I have two things to say very briefly about this. On Second Reading, I think I made it clear that I did not approve of Clause 18. I did not think that it was needed, as it seemed to me purely declaratory. It did not add anything or take anything away from the law; it was a statement of what the law was—and it is perfectly clear that we all knew what the law was, and we all know what it is. So I was a little surprised to see the terms of the amendment proposed by the noble and learned Lord, Lord Mackay of Clashfern. If we have to have a declaratory clause of this sort on this issue, I would vastly prefer his drafting than the original government drafting, but I accept and would vote for the amendment with some considerable reluctance. In my limited experience of declaratory clauses, which is not as great as that of the noble and learned Lord, on the whole clauses that are meant to clarify the law very frequently have precisely the opposite effect. I am doubtful about it and do not like it, but in the end I will support it.

My Lords, I rise with some trepidation, as I am not a lawyer. I have not been entirely satisfied by the arguments that have been put forward by both the noble and learned Lord, Lord Mackay, and other eminent lawyers in the House that we can rely entirely on the 1972 Act and the fact that apparently subsequent legislation depends on the definitions in that Act, to the effect that the 1972 Act covers all relevant legislation.

The noble and learned Lord made the point that there was very little difference between his position and that of the Government in this territory, so I wonder what is wrong with taking a belt and braces approach to this matter. If I understand the position, there are other sources in relation to subsequent Acts that are as drafted not wholly dependent on the 1972 Act, and EU law can be given legal effect in the UK by secondary delegated legislation and not just by primary legislation.

I realise the noble Lord is not a lawyer and what I am about to say may seem unfair, but the answer to what is wrong with his suggestion is that the Court of Appeal and the House of Lords in the cases of Macarthys v Smith and Factortame have made the legal position perfectly plain. That is why the noble Lord, Lord Richard, is right in saying that we do not need Clause 18, but if we are going to have it we may as well have it stating the law as declared by our judges.

I should probably defer to the noble Lord, but I do not think that was a full answer to my mind to the points raised by the noble Lord, Lord Waddington, or to the whole issue of judges subsequently choosing to interpret the position with regard to the martyrs’ case. It seems perfectly possible in theory that there may be a House of Lords judgment which is perfectly valid and accepted at the time it is given, but subsequently manages to get twisted by the interpretation of particular judgments by noble Lords. I come back to the rather straightforward point, which is that from the point of view of those who wish to have this territory absolutely nailed, what is wrong with a belt and braces approach?

I would not like it to be thought by your Lordships that those who were not lawyers disagreed with the lawyers. As a non-lawyer, it seems to me to be very clear that there is a good reason why we should not have the additional parts: it is misleading to have them. It suggests that the additional parts have the same validity and strength as the central issue of the 1972 Act. I would account it as the proudest moment of my parliamentary history when I voted for that Act—it was the moment when we achieved the thing that in all my young life I longed to achieve, which was the beginning of closer European unity, for which I have always stood. I do not want that Act to be removed from its pedestal place. It is the Act that says, very clearly, that the United Kingdom is a sovereign state, and from its sovereignty it grants this particular place for European legislation. Should at some future time a Government, in foolishness almost unimaginable, decide that they did not wish to continue with that Act this sovereign Parliament could, by repealing that Act, change the circumstances—and change them of its own strength, volition and powers.

This is a declaratory statement. I agree with the noble Lord, Lord Richard, that it is not necessary but given that it has been raised, it becomes necessary. Now that it is necessary it is crucial that it should be extremely clear. The noble and learned Lord, Lord Mackay of Clashfern, has given a great opportunity to this House to unite around something which should not divide those on either side of the European divide, or indeed those in the general mishmash in the middle. The worry which I have—this is why I have become less happy in the mean time—is the question which the noble Lord, Lord Kerr, raised earlier: if the Government do not accept this as a reasonable matter, what is it that is hidden in that alternative? For this must be right and if it is not, the rest is wrong.

I shall say one thing to the noble Lord, Lord Waddington. If his worry is a real one, he is worried by either of the statements before us. If his worry is a real one and the noble Lord, Lord Pannick, got it wrong, the fact is that he would be wrong about the Government’s formulation as well. Although I therefore have sympathy with the noble Lord, Lord Waddington, he cannot defeat his problem by preferring the one against the other. To defeat his problem, he would have to initiate some extra bit to the Act to make it clear. I do not believe that is necessary but his intervention, although admirable, is really not about the division between these two formulations, so I pray that your Lordships’ House will support the amendment.

However, I would like it even more if the Government were to say that they thought, on balance, it would be better to go with what is clearly a widely held feeling in all parts of the House and with those who are in favour and those who are against our membership of the European Union.

My Lords, it does not matter a great deal whether the submission made by the noble Lord, Lord Deben, or that made by the noble Lord, Lord Waddington, is correct. At the end of the day, it means not only that the European Communities Act 1972 made great inroads into our independence but that other Acts of Parliament have done exactly the same. However, through the machinery of Section 3 of the 1972 Act, the inroads are not permanent. They are as permanent as we wish them to be. It is very much the same as if we made a lease of part of our sovereignty, but a lease that we can recall and cancel at any time we so decide.

The only other matter that I would like to mention is the modesty with which the noble and learned Lord, Lord Howe, disassociated himself from the triumph of the 1972 legislation passing through the House of Commons. It is true that he did not draft the Bill, but he steered it with magnificent competence through the House. I remember the back-handed compliment which he had from the late Michael Foot, who said words exactly like these: “The honourable and learned gentleman the Solicitor-General has shown such nimbleness and adroitness as would make the great Houdini look like a helpless arthritic”.

My Lords, I took part in the debate on this clause in Committee. I remain completely opposed to its inclusion in the Bill. I agree with the noble Lords, Lord Richard and Lord Deben: it should not be there, it is not necessary and it is dangerous that it should be there. It is clear to virtually everyone that the 1972 Act is the only means by which European law can be introduced and enforced in this country. It is an absolute situation that one Parliament cannot bind its successor. Therefore, an Act of Parliament such as the 1972 Act can be repealed. I have been told time and again by the government Front Bench, whether Conservative or Labour, when I have said that we are locked into this and have lost sovereignty, that our sovereignty lies in the 1972 Act. As I say, that is absolute; there is no need at all to qualify it.

I am in something of a quandary. The amendment is probably better than the original clause, but really I do not want the amendment either. What on earth am I supposed to do? If I vote for the amendment, we still have this qualification in the Bill about the absolute nature of the European Communities Act 1972. If I want to vote out any reference to that Act, which is what I would need to do, I have to vote against the amendment and then vote against the original clause. Is that the case, or is there some way around that? If any noble Lord could advise me on how to get this obnoxious clause out of the Bill, I would be most obliged.

My Lords, I had not meant to say anything at all until I heard some of the arguments. It seems that the 1972 Act is not totally invulnerable. Factortame was a nasty scare. Therefore, the last thing that we want to do at this stage is to throw further doubt on the 1972 Act by talking about “an Act” rather than the 1972 Act.

My Lords, I have two questions for the Minister that I asked in Committee but to which I did not get an answer. First, will he confirm that the noble Lord, Lord Kerr of Kinlochard, is 100 per cent right when he says that when the happy day comes—he did not put it like that—when the 1972 Act is repealed by the House of Commons and your Lordships’ House, it will then be definite that we are out of the European Union?

However, the question is not quite as simple as that. In January 1997, your Lordships were good enough to give Second Reading to a Bill in my name that did exactly that—it repealed the 1972 Act. At the time I was advised by the Clerks that this would still leave us with a problem from the Eurosceptic point of view, which wants nothing to do with any European legislation whatever. That problem would be that all the EU law that had been sewn into domestic law since 1972 would remain valid in British law. At the time, the Clerks advised me that one is not allowed to introduce a Bill into your Lordships’ House that is not capable of practical fulfilment. Their advice at the time was that it would have taken 12 parliamentary draftsmen some three months to identify all EU law sewn into domestic law, which could then have been repealed at our leisure. I am glad to say that they even suggested having a massive Henry VIII clause at the end of the procedure. Therefore, my first question to the Minister is: would it really still be the case that EU law remained in British law? There is far too much of it; nowadays the majority of our national law is passed in a wholly undemocratic process in Brussels to the exclusion of Parliament in this country.

My second question to the Minister was, and is, as follows. When, as I say, the joyous day comes that the 1972 Act is repealed, that surely means that the Lisbon treaty falls in its entirety, because the Lisbon treaty is only an amendment to several other amendments to the 1972 Act. When that happens, is this country still obliged to follow the provisions of the Lisbon treaty which govern how a country leaves the European Union? That is a process, I think—I may be wrong—under Article 50 of the Lisbon treaty, which takes two years and puts the Council in charge of the process and, indeed, the cost of the country leaving the European Union. When we repeal the 1972 Act, does that provision fall as well? Are we then, as the noble Lord, Lord Kerr, said, free of the whole wretched thing, or are we still bound by Lisbon? What about the domestic law which is sewn into our law? Surely that remains binding until repealed by Parliament.

My Lords, I apologise to both noble Lords who have just spoken. In my eagerness to get up I may have mistakenly thought that we were coming towards the end of a deliberation. My reason for thinking that was that this has been in some ways a very one-sided debate. There does not seem to be huge difference across the House, whether it is between lawyers or non-lawyers or members of one party or another. For those reasons, I hope that the House will allow me, a non-lawyer, at least temporarily to fill the shoes of the noble and learned Lord, Lord Falconer of Thoroton, whose name is to the amendment.

A number of noble Lords have made very clear-cut responses to the point made by the noble Lord, Lord Waddington. I fear that the noble Lord, Lord Flight, is frightening himself with what may be extremely fanciful personal anxieties, which I hope that he will be able to put to bed as he rests tonight. The noble Lord, Lord Pearson, does not seem to be speaking to this debate, amendment or, indeed, to anything else that your Lordships are discussing. As I understand it—no doubt I will be corrected if I am wrong, not least by the noble Lord—we are not debating the repeal of the 1972 Act, but trying to understand its status in United Kingdom law.

My Lords, in actual fact what I have said is relevant to this amendment because it says that all British law is only there because of the 1972 Act. I am merely asking what happens when it is repealed.

My Lords, I am sure that on the day that proposition is in front of the House, we will have an energetic debate and probably get to the bottom of it at that time. I am very tempted to respond to the noble Lord, Lord Stoddart, who asked what he should do. It would probably be ungracious to try to answer that question, but I suppose that sitting on his hands or repairing to one of the bars are among the available options. However, he illustrated the fact that there is a great deal of commonality right across the House on this issue.

I am among those who do not like declaratory clauses—I am wholly with my noble friend Lord Richard and the noble Lord, Lord Kerr, on this. I cannot understand what such clauses do other than call into question the fundamentals of our law and the statements that have been made about our law by the House of Lords and others. I cannot see the point. However, I accept that it is a political reality that there is a desire to see this kind of declaration in the Bill. That is why we support the amendment. If there is to be a declaration, it might as well be accurate. If we are going to declare things, let us be precise and accurate. The whole debate boils down to a simple proposition about what we learnt was Sir John Fiennes’s excellent writing of the original legislation, regarding which the noble and learned Lord, Lord Howe, was far too modest about his role.

That Act and Section 3 in particular are the head lease. There is nothing in any other Act that does not flow from it. The more we try to obscure that or suggest that there are other things that may flow from it, the less likely it is that anyone will understand that the declaration is accurate in any sense. This is a technical, not a party political, matter. We have had fantastically good advice. What a benefit it has been to all of us. Let us carry the amendment, which I hope will be pressed, and have a declaration that we can at least say is accurate.

My Lords, I thank my noble and learned friend Lord Mackay of Clashfern for moving the amendment in the name of the noble Lord, Lord Kerr of Kinlochard. Indeed, I thank all noble Lords who have taken part in an important debate, which has flagged up the importance of the basis on which community law has effect in the legal systems of the United Kingdom. My noble and learned friend said that there was nothing in principle that divides us on this matter. As the noble Lord, Lord Triesman, said, it is a technical matter that to some extent relates to statutory interpretation. I hope that everything that has been said previously in Committee, and what I will say today, will reassure the noble Lord, Lord Kerr, that there is neither sinister intention, nor are any dog whistles being blown. The purpose is to assert the position that almost everyone who has contributed to the debate has made clear—European Union law has effect in the United Kingdom by virtue of statute passed by Parliament.

I join the tributes paid to my noble and learned friend Lord Howe of Aberavon, who, we fully understand, has gone to a memorial service. My noble friend Lord Lester of Herne Hill quoted Lord Denning in the case of Macarthys Ltd v Smith, in which he indicated that,

“Community law is part of our law by our own statute”.

Dealing with the question of where Parliament stood on this, in the passage from the debates on the 1972 legislation quoted by the Constitution Committee in its report, my noble and learned friend Lord Howe of Aberavon said:

“the position is that the ultimate supremacy of Parliament will not be affected, and it will not be affected because it cannot be affected”.—[Official Report, Commons, 5/7/72; col. 627.]

That is something to which we as a Government would certainly subscribe.

The key reason for wanting this declaration is that in spite of that, and in spite of the near unanimity in this Chamber that that is the position, we are aware that others have advanced arguments in courts or have written articles that have cast some doubt on that assertion. I know that there are always reservations about what are essentially declaratory clauses in Bills, but this one is important. As your Lordships’ Constitution Committee indicated,

“Clause 18 is self-evident: it restates, but does not change, the law”.

In response to one of the points made by the noble Lord, Lord Pannick, I should say that including such a declaration in no way raises doubts about other issues of parliamentary sovereignty. The Constitution Committee said:

“We are confident that if parliamentary sovereignty were to be questioned in any other context, the existence of clause 18 would not prevent the courts from upholding the well understood and orthodox position”.

We come down to why the wording in the Bill is to be preferred to that in the amendment. I agree with the proposers of the amendment that directly effective and applicable European law can take place within the United Kingdom's legal order only provided that Parliament has determined that through its Acts. Where our views diverge is on whether the European Communities Act 1972 alone is the basis on which that has been achieved within the United Kingdom or whether other Acts of Parliament may also give effect to directly applicable and directly effective European law, independent of the 1972 Act. I am grateful to my noble and learned friend Lord Mackay of Clashfern for making himself available to discuss the matter with my noble friend Lord Howell and me. I know that he is aware that the Government have considered the amendment very carefully indeed.

I shall set out to the House the reasons why our strong, firm preference is for the wording as in the Bill. The amendment is based on the proposition that EU law takes effect within the United Kingdom legal order by virtue of the 1972 Act. I shall come on to deal with the point made by my noble friend Lord Waddington that it does not say, “by that Act alone”. That may have been the intention, but it does not say that. In so far as other primary UK legislation may be given effect, those who have argued for the amendment argued that other legislation is merely consequential on the existence of the 1972 Act.

I can assure your Lordships' House that, in drawing up the Bill, we carefully considered whether it would be sufficient to couch a clause in terms very similar to the amendment, but after consideration we determined that it would not. My noble friend Lord Deben used the phrase “pivotal place” to describe the 1972 Act. The 1972 Act undoubtedly has a pivotal place. It is the key mechanism by which directly effective and directly applicable European Union law has been given effect in the United Kingdom, but on analysis of the full range of legislation under which EU obligations have been given effect, we concluded that to refer solely to the 1972 Act would not provide a sufficiently comprehensive and accurate statement of the legal position.

Other pieces of UK primary legislation exist independently of the European Communities Act and have been giving effect to EU law obligations. For example, the devolution settlements require Ministers to act in a manner compatible with EU law. Some of those instruments define EU obligations in a manner similar to the language used in Section 2(1) of the 1972 Act but, significantly, not by reference to it. For example, Section 126(9) of the Scotland Act defines Community law as,

“all those rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Community Treaties, and … all those remedies and procedures from time to time provided for by or under the Community Treaties”.

I accept that the term “Community treaties” is defined under Schedule 1 of the Interpretation Act 1978 by reference to Section 1 of and Schedule 1 to the European Communities Act 1972, and has meanings prescribed by that Act, but there is no cross-reference to Section 2(1) of the 1972 Act.

It might be suggested that all other legislation would be considered consequential on the 1972 Act rather than free-standing, but our conclusion is that that legislation is independent of the 1972 Act: that in so far as it makes directly effective or directly applicable European Union law within the United Kingdom legal order, it does so in its own right and not as a consequence of the 1972 Act.

It has been suggested that if the 1972 Act were ever repealed, all those other statutes would be utterly deprived of their content—that was the point made in advance by my noble and learned friend—at least in so far as those statutes relate to Community law. The Government accepts that if the 1972 Act were ever repealed, other references in other pieces of legislation would also be repealed. The circumstances in which that happened would be of fundamental political importance. However, that would not be as a consequence of the repeal of the 1972 Act per se, but because the 1972 Act and all the other legislation would be repealed only in the context of the United Kingdom’s withdrawal from the European Union—which, I hasten to add to reassure the majority of the House, is certainly not on the Government's agenda. In other words, the existence of these other Acts is independent of the 1972 Act. They flow from the United Kingdom’s treaty obligations and do not depend on the European Communities Act 1972. If, for example, the provisions in Section 126(9) of the Scotland Act, to which I referred, were not repealed, they would still be self-standing.

I accept that the problem would be the question of definition of “Community treaties”, and that might well have to be argued before the courts. I suspect that my noble and learned friend would argue that it was devoid of meaning, but it is not clear that that would be the case. Indeed, it might well be argued that the very fact that Parliament chose not to repeal these provisions—in what is seen as a very important constitutional piece of legislation defining the powers and the scope of the Scottish Parliament—gave the matter some significance. That is hypothetical and may well be academic, but it was against that background that we wished to make sure that, when we put this provision into the Bill, we were being comprehensive.

In Committee, my noble friend Lord Howell mentioned on Clause 18 that there were other pieces of legislation. Examples include the Company Directors Disqualification Act 1986, the Chiropractors Act 1994 and the Competition Act 1998. Perhaps I may illustrate by reference to the Company Directors Disqualification Act 1986 the precise issues on which I should like the House to reflect. Under Section 9A of that Act, the United Kingdom must make a disqualification order against a person in certain circumstances, including where an undertaking commits a breach of competition law under either Articles 81 or 82 of the EC treaty, now Articles 101 and 102 of the TFEU. The Act refers directly to these treaty provisions without reference to the 1972 Act, and thus a court would be required to take these provisions into account, even in the absence of the 1972 Act. As I said, we are getting into statutory interpretation here. Nevertheless, we have proceeded as we have because we wished to be comprehensive.

Perhaps I may refer to the point made by my noble friend Lord Waddington. The amendment misses out what I believe to be an important qualification or point in the proposed new clause. The words at the beginning of Clause 18 make it explicit:

“It is only by virtue of an Act of Parliament that directly applicable or directly effective EU law … falls to be recognised and available in law in the United Kingdom”.

The amendment misses out the word “only”, leaving open the possibility of arguments being made that—

I remind the Minister of the argument made by my noble friend Lord Pannick. If I introduced him to a lady and said that she was my wife because I married her, would I be required to say, “and because I have not married anybody else”?

No, my Lords, but one should consider the context. This new clause was proposed in its original form in the context of trying to lay to rest any contrary suggestion that there are other means—means which I do not think anyone in this debate has accepted; nevertheless, they are out there and are run as arguments—by which European Union law can be imported into the legal systems of the United Kingdom. That is why we use “only”.

I hope that my noble and learned friend takes this question in the spirit in which I ask it. Is there not a danger that his approach would be in accordance with Lord Wilberforce’s warning about the “austerity of tabulated legalism”?

That is the sort of question that one wants notice of and where the answer might in any case be misinterpreted. I think that I made it clear, and that it has been generally recognised in these debates, that this is against a background of suggestions made not in this Chamber—I think the position is perfectly well understood here—but elsewhere that there could be other channels via which European Union law could be imported into this country. We want to make it clear—I think there is near unanimity in the House—that it is by Acts of Queen and Parliament that the European Union law has effect.

The main difference between us is the view expressed in the amendment that the European Communities Act 1972 is the sole legislative vehicle for doing this. Our concern is that there are other Acts of the United Kingdom Parliament which make direct reference to European Union law, particularly the one on directors’ disqualification, which does so without reference to any other form of the 1972 legislation, even through the Interpretation Act. As my noble friend Lord Flight said, it is belt and braces. In a situation such as this we believe that the belt and braces are required. It is a fine point—not one of principle, but it is one of statutory interpretation. We believe that to list would not be neat because of the danger of leaving one out, but we need to make it very clear that European law becomes part of our United Kingdom legal system through an Act of Parliament. That is the way it happens and by no other way. To limit it to one Act, however fundamentally important that Act, runs the risk of leaving others out which are already on our statute book. For that reason, I invite my noble and learned friend to withdraw the amendment.

My Lords, there is not much between us. On the other hand, it is important to have clarity. If there are other Acts which are required in relation to this situation, the option is to mention them. The words “an Act” do not give any precision whatever. Therefore, the use of the phrase,

“of the European Communities Act 1972”,

is much clearer.

I think I am right in saying that the statutes, which are referred to as being other statutes—part of “an Act”—use the words defined in the European Communities Act; for example, the Community treaties. Those words are specified in the 1972 Act. All those Acts, in their dealing with European Community law, would be understood as having the meaning assigned to these phrases in the 1972 Act. If the 1972 Act were to be repealed, those phrases would be repealed with it because they would be deprived of the meaning which they had when the Act was enacted.

My noble friend Lord Waddington asked about “only”. If he wants to improve our amendment, it is open to him to propose an amendment to that effect. Of course, that is still possible. If the amendment is passed, he could improve it at Third Reading because I am sure that clarification of an amendment passed on Report would be possible at Third Reading. I do not think it is required, but if he thinks it would improve it, let us see.

This amendment specifies the Act on which we rely. My noble friend Lord Flight talks about belt and braces—I suppose I am getting to the stage when they may be an important matter. If I am right, all the European legislation which is incorporated into our law has been done by virtue of the European Communities Act and the definitions provided in that Act.

The lay men are floundering. My noble and learned friend rests a great deal on the importance of the definitions in the 1972 Act and said that if the Act were repealed these words would be repealed as well. I take it that he in fact means that the definition would be repealed but the words would still have a meaning and therefore the meaning could well be that intended in the original Act.

The possibility is that the 1972 Act is on the statute book when these later Acts were passed. Therefore, phrases like “the treaties” and “the community treaties” would be interpreted in the light of the 1972 Act. If the 1972 Act were repealed, these definitions would disappear altogether and there would be no phrase left of that kind because these phrases are all given the meaning of the 1972 Act. If you look at it this way, if a phrase is interpreted as being what it says in the 1972 Act and the 1972 Act is repealed, that phrase has no meaning at all thereafter, so this is really quite an important issue.

Will my noble and learned friend respond to my point about the Company Directors Disqualification Act 1986, which refers in Section 9A specifically to:

“Article 81 of the Treaty establishing the European Community (prohibition on agreements, etc, preventing restricting or distorting competition)”,

and, in the following subsection, to Article 82 of that treaty, where it is not by reference to treaties in the 1972 Act but by specific reference to a specific treaty? If the 1972 Act were repealed would these words still not stand?

I suggest that the European Community treaty of itself would not be meaningful in our statutes until it was given effect by the 1972 Act; and when the 1972 Act ceases to operate, that goes along with it. That is the fundamental position. As far as trying to help the noble Lord, Lord Stoddart of Swindon, is concerned, I am not sure that it is my business to do that. The best advice I can give him, of course, is to support this amendment, and I think it right that the opinion of the House should be taken.

Amendment 33A had been retabled as Amendment 32B.

Amendment 34 not moved.

Amendment 35

Moved by

35: After Clause 21, insert the following new Clause—

“Duration of Part 1 and Schedule 1 (No. 2)

(1) Part 1 and Schedule 1 shall expire on the day on which the Parliament in which this Act is passed dissolves.

(2) In subsequent Parliaments, the Secretary of State may by order provide that Part 1 and Schedule 1 shall be deemed to have been revived from the beginning of the Parliament in which the order is made.

(3) An order under subsection (2) shall provide that Part 1 and Schedule 1 shall expire on the day on which the Parliament in which the order is made dissolves.

(4) An order under subsection (2)—

(a) must be made by statutory instrument, and(b) may not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.”

My Lords, this is the Hemingway amendment—because the sun also rises. This amendment is really rather important. I wish to speak for it on constitutional grounds and on grounds of foreign policy. I shall make an argument about parliamentary sovereignty, and an argument about the national interest.

I begin with the constitutional argument. I see two of them. First, the provisions of this Bill are all otiose in this Parliament. The coalition has made it clear that there will in this Parliament be no treaty changes, no transfers of power and no extensions of qualified majority voting. Therefore, there will be no referenda and none of the matters which have engaged us through all these days and nights are of any relevance to this Parliament; they apply only in the next Parliament. I cannot think of any previous constitutional Bill which has had that effect. I can think of no precedent for a Bill that is designed solely to influence future Parliaments. Of course, the letter of the doctrine that one Parliament cannot bind its successor will remain the case, because a new Government could repeal the Act. In my contention, however, the spirit of the doctrine would be much better honoured if there were a requirement for an affirmative decision as a first act of each new Parliament that the provisions of this Act should continue.

My second constitutional argument concerns the fact that the referenda called for in the Bill would in every case be asking—whatever the substance of the issue —the question, “Do you wish to overrule your Government and your Parliament?”. Before the referendum stage was reached the Government must by definition be in favour of the measure, because they all require unanimity in Brussels and both Houses of Parliament would have voted for the measure before the referendum question. The result of the referendum, if it was no, would be that an Act of Parliament was thereby revoked. I can think of no precedent for that. It has not applied to any past referendum in this country. In my contention, a referendum called for in this Bill is a direct undercutting of parliamentary sovereignty.

I believe it entirely right that each successive Parliament should be asked whether it wished its sovereignty to be undercut in the way provided for in this Bill, and that is why I favour a sunrise clause. This is my second constitutional argument and I have not mentioned Edmund Burke.

On the foreign policy argument, I do not believe that we shall see many referendums. We know that we shall see none in this Parliament as a result of this Bill, and I do not think that we will see many in future Parliaments either. Some of the circumstances listed in the Bill that would trigger a referendum are wildly implausible. There are some which I cannot see many member states supporting, while there are others which I think it inconceivable that any Government would support. For example, there is a reference to the own resources decision. Unanimity on the own resources decision is absolutely crucial, and I cannot think that any British Government would be stupid enough to give it away, so I do not think we will have a referendum on that. There are other items which are minor matters of detail. No Government are going to be politically naive enough to go to the country on an obscure matter of procedural detail lost in the treaties.

However, as we saw in the debate touched off by the noble Lord, Lord Davies of Stamford, on his Amendment 22A the other night, there are some matters where a change would undoubtedly be in the interests of the UK. The clause he referred to is one where British industry would greatly welcome the introduction of qualified majority voting. But there is no question of any British Government agreeing that the country should be asked, “Do you want to overrule Parliament on whether the list of military goods that are exempt from single market disciplines should be changed by qualified majority voting?”. Any Government who put that question to the country would be laughed to scorn, so none of them will. The British negotiator in Brussels will be unable to put forward the proposal or support it if it is made by anyone else because his Government back home will tell him, “Don’t be silly. That would trigger a referendum”.

Ministers have argued that my fears are exaggerated. They have also argued that the price is worth paying and a bit of rigidity is necessary in the interests of restoring confidence in successive Governments’ handling of European affairs and recreating trust. I do not agree, but they may be right and I accept that only time can tell. My fear is that other member states, seeing how much concrete we have poured over our feet, will be tempted or forced to bypass our perceived rigidity by excluding us from the debate and proceeding by what is known as “enhanced co-operation” or acting outside the treaties without us. I think that we may be at a Messina moment. Again, the Government think that I exaggerate, and they may be right because, as I have said, only time will tell. It took a long time for the penny to drop that we had made a terrible mistake in walking out of the Messina conference.

I accept that the Government are certainly right to say that our exclusion is not an imminent threat. So little is going on that there is not much risk of our excluding ourselves by way of institutional or constitutional developments. But as time passes, the risk that our self-exclusion will be damaging increases. In nature, any organism that does not change and renew itself is by definition dead. The Government are making a virtue of rigidity. The case for flexibility will become more evident over time. New challenges will arise. The European Union will want to change itself in some ways—I cannot predict what they will be; none of us can. We should not rule out the possibility that we might want a change and that, as with the Single European Act, we might on occasion want to say yes.

This debate, I accept, is a bit academic now because of the coalition’s decision that nothing which could trigger a referendum will be done in this Parliament. Since the provisions of the Bill that we are passing are otiose until after the next election, it is an academic issue. But it is an issue that we should come back to after the next election; it is an issue where regular reassessments of the costs and benefits of the position that we have put ourselves in would be appropriate.

That is the national interest case for the amendment. It is the softest conceivable sunset clause, because the subsequent sunrise is so simple to effect. It is appropriate because the Bill is constitutionally innovative, affecting the sovereignty of Parliament in at least two rather serious ways. It would permit regular reassessment of whether rigidity is working or whether the national interest would be better served by avoiding self-exclusion from key debates and future developments. I beg to move.

My Lords, I want to look, as the noble Lord, Lord Kerr, has done, at the constitutional implications of the Bill, which should concern all Members of the House irrespective of their views on Europe.

The Constitution Committee has recommended a very important principle; namely, that referendums should be confined to changes of fundamental constitutional importance. If that principle is respected and strictly observed, such a referendum may not seriously prejudice parliamentary government as we know it. But this Bill as it stands drives a coach and horses through that principle.

There is no dispute about a referendum on the euro, or on joining a common European army or a common European foreign policy. But how can it be argued that the 56 possible changes that would trigger a referendum under this Bill are fundamentally constitutional? The noble Lord, Lord Howell, has several times argued that these items are all important. Well, they may well be important. Lots of minor changes may be important, but that does not make them fundamental constitutional changes.

If there is a European public prosecutor's office, it will have an important role in dealing with certain kinds of European financial crime. But if we decide to participate in that office, will it fundamentally change the British constitution? Does the noble Lord seriously argue that? Of course it would not. Are changes in the way we vote on the appointment of an Advocate-General or on the protocol on the excessive deficit procedure a fundamental change in the British constitution? Of course they are not.

In the past, I have congratulated the noble Lord, Lord Howell, on the eloquent and ingenious way in which he has defended the indefensible, but this is Alice in Wonderland stuff. We are assured that there will be no referendum in this Parliament and the noble Lord, Lord Kerr, stated the reason why. But if this Bill passes into law as it stands, the principle of strict limitation on the use of referendums to major constitutional changes will effectively be abandoned because it will have been established in a major Act of Parliament—or, as the noble and learned Lord, Lord Mackay, described it, a singular and central Act of Parliament—that a referendum is justified because an issue is important even if it has nothing to do with the constitution and also because it is alleged, without any reliable evidence, that people want a referendum and the will of the people must prevail.

If importance is the criterion and if what the people want is a criterion, why restrict referendums to the 56 changes to which it applies in this Bill? If you ask people whether they want a voice in National Health Service reform, the answer will be yes, so why not hold a referendum? There could be a referendum even after an Act of Parliament has approved the changes. What about the police reforms or welfare reforms? They are far more important to the ordinary individual than the European public prosecutor's office. Why should the people not have a say? Why not have a referendum on the Government’s policy for deficit reduction, something of basic importance to our welfare? Of course, when you ask people whether they want to have a say, they say yes.

It has been argued time after time—

Is not one difference between having a referendum on an issue such as the National Health Service or local government reorganisation and a transfer of power and competence from the UK to the EU that in the case of the latter it is almost irreversible? It is extremely difficult to reverse.

The noble Lord has made a point which on the face of it is plausible. It very much ties up with the argument put by the Front Bench that the case of transfer of power in Europe is different because there is a special problem about British trust in the European Union, which can be restored only by giving people a say. Then by some extraordinary leap of logic, it is suggested that they should have a say on issues such as appointments to the European Court of Justice or the protocol on the excessive deficit procedure, because that would apparently restore trust—because in the pubs they talk of nothing else.

As the noble Lord, Lord Liddle, revealed in Monday's debate, the European Union is not the only body that has lost people's trust. Parliament is distrusted even more than Brussels—by 66 per cent, he revealed, as compared with only 64 per cent in the case of Brussels. The Government are mistrusted by 67 per cent. What is the answer to this mistrust of Parliament and Government? According to the Government's logic, the answer is more and more referendums—more power to the people. Who are the most mistrusted of all by miles, by 82 per cent? The political parties are. What should they do? Obviously, the answer is to promise more and more referendums in their election manifestos because people would have more say and, as Rousseau preached, the will of the people must prevail. I am amazed that speech after speech from Conservative supporters of the Bill echoed the cry of Rousseau; the inspiration of Robespierre and the Committee of Public Safety. They abandoned the philosophy of John Locke, one of the architects of parliamentary government, who also inspired the founders of the American constitution—and, of course, goodbye Edmund Burke.

The noble Lord, Lord Howell, and others have told us that we will not have referendums in this Parliament. If there is a referendum in a future Parliament it will not be a separate referendum on each individual item in the list of the 56 but on a whole batch of changes together. We will be given a choice of saying yes or no, in a single vote, to a licorice allsorts collection, including perhaps the decision on a new Advocate-General, on new tasks relating to prudential supervision by the European Central Bank, on a multiannual financial framework and so forth, as if any such choice of one yes or no vote to cover the lot could possibly make any sense.

The noble Lord, Lord Howell, said that it will be no different from voting for party manifestos in elections with their long list of promises. Personally, I do not subscribe to the general belief in the sanctity of the manifesto mandate. Parties should make fewer promises and grade their commitments at election, with some as aspirations and others as commitments that they can safely undertake irrespective of changed conditions. Manifestos are too detailed and they do not allow for events. As Macmillan said, “Events, dear boy, events”, affect you.

At least manifestos relate to issues with which voters are familiar. Nothing could be more remote from their experience of everyday concerns than most of the items in the list of 56 possible referendums in the Bill. Essentially, the vote at elections is for something that people understand: choosing a new Government. The analogy of the noble Lord, Lord Howell, does not stand up.

The Bill is highly dangerous for two reasons. First, as the noble Lord, Lord Kerr, and others with great experience of European negotiations have argued, it may lead to immobility and sclerosis on many occasions when what we need above all is flexibility. Just as serious—I would argue even more so—are the crucial constitutional issues in the Bill that undermine the system of parliamentary government and are a major move towards government by plebiscite, California-style.

Some of the Bill’s supporters seem positively to welcome this. With others, it seems that the hostility of Eurosceptics to Brussels is so strong that it outweighs concern for parliamentary government, which has served this country so well. I hope that some of them will recognise that our system of parliamentary government matters even more.

Presumably, not everything will be put to a referendum. As has been said, a future Parliament can repeal the Bill as an Act, but once an Act that gives rights to people to be consulted in a referendum has become entrenched, it is much more difficult to take those rights away than not to have provided the plebiscite in the first place. I echo the question of the noble Lord, Lord Kerr: is there any case in which a Government have said in a Bill, “We are not legislating for this Parliament. The referendum lock will never be triggered in this Parliament. We are legislating not to restrict our own actions but those of a future Parliament”? We are going to restrict the decisions which they might wish to take. I believe that that in itself is, as Professor Vernon Bogdanor, an eminent constitutional expert, has declared, fundamentally unconstitutional.

I add to those who are worried about the coalition agreement that nothing in that is infringed by the amendment. The amendment does not restrict this Parliament, to which the coalition agreement obtains. The coalition agreement is not for future Parliaments. Who knows what the coalition agreement for the next Parliament will be? Who knows who will win the election or who the coalition partners might be? As the amendment says, very well, let the Government have this Bill—probably mainly to appease their Eurosceptics—but for this Parliament only.

My Lords, the whole House will recognise the magnificent work over many years that, as a great public servant, the noble Lord, Lord Kerr, has done for this country but at the heart of the amendment is the fact that he dislikes the Bill in its entirety. It may also be fair to say that his idea of a sunset clause is the very passionate hope that the sun will never rise on it again. I see him smiling.

The whole point about this Bill is that it is meant to provide an enduring framework or umbrella under which future important EU decisions can be made. It comes back to this fundamental question, which is one of trust. People need to feel that they have a longer term guarantee of that sense of ownership of these procedures if we are to give away powers to the European Union. That is simply at the heart of this Bill. A sunset clause would give a limited time frame—providing perhaps for a time when we do not expect a referendum, or taking that right away when there might be a treaty change. That is the possible danger. But I might use the analogy of saying to the noble Lord, “Here is £5, but you can spend it only between four o’clock and six o’clock in the afternoon, otherwise I am going to take it back”. That is the essence of what this is all about.

We all want to build trust, which has been absent in the relationship between the people of Britain, Governments and the European Union. As we have observed already in our debates and discussions, the Laeken treaty, which was meant to rebuild that trust, following through to the Lisbon treaty, has certainly failed to do that, and we are seeing the consequences right across the European Union. We do not want a future Government, who are to re-engage people, to be able to renege on a promise. This Bill does not seek to bind a future Government—that certainly could not be done anyway—but it binds a Government politically to ensure that the people of this country are involved. That is the key and heart of this particular legislation.

A sunset clause can be appropriate in certain circumstances. Most of your Lordships will agree that the Counter-Terrorism Bill was a case in point. There was perhaps, arguably, a temporary situation that had to be dealt with, although I certainly did not agree with it, and then our traditional liberal traditions needed to be returned to in due course after what some people regarded as an exceptional situation. But in practice this amendment would return ministerial discretion to decide whether to revive Part 1, which includes the whole issue of the referendum and parliamentary control provisions. There is a risk that a Government might revive the Bill only if they were confident that there was no chance of treaty change during that Parliament. Of course, should this Bill become an Act of Parliament, which I certainly hope it does, it could be repealed, as the noble Lord said. But it should be repealed on the same mechanism of equal importance as its introduction if a repeal is going to take place. In future, the Government will have to come back and explain themselves about major EU decisions, which is essentially what the Bill demands.

If the noble Lord’s amendment were to improve the Bill, we might consider it in a rather more dispassionate way. But what this is about really is taking the heart out of the Bill—and I am confident that the noble Lord knows that too well.

My Lords, one benefit of our largely unwritten constitution is the flexibility that our system gives us; one defect is that we do not have a very consistent set of principles to guide us. We tend to be pragmatic. My experience as a blow-in or holiday resident for 38 years in the Republic of Ireland and my experience of their system makes me attracted to one of the arguments in the speech in support of the amendment by the noble Lord, Lord Kerr. It has convinced me that any attempt in this Bill to introduce inflexibility would be a grave mistake. I also think that referenda on complicated and highly technical matters are not a very good idea.

The Irish constitution has been interpreted by a narrow majority of the Supreme Court of Ireland as requiring referenda in quite a number of circumstances. When the treaty of Lisbon was put out for referendum the Irish Government produced an information pack which was completely incomprehensible even to lawyers, since it referred to bits of that treaty by reference to article numbers, paragraphs and specific legislative proposals. They left an information pack in each post office. I took the trouble to try to understand it and, as I say, I found the information given to the citizens of the Irish Republic to be so opaque that I certainly could not understand it.

Essentially, what this Bill is seeking to do is to treat itself as a constitutional Bill that will pre-empt future Parliaments, unless they exercise their sovereign powers to repeal it. In other words, it seeks to act in a quasi-constitutional way. It will therefore inevitably introduce rigidity where at the moment we have maximum flexibility, and do so in the name of the democratic imperative. I do not find that persuasive when one sees the range of issues that are apparently to be subject to future referenda. That will not help the interests of the United Kingdom in negotiating within the corridors of power in Brussels and it will not enlighten our citizens, were we to have referenda on these subjects. Since it is not proposed that the powers in this Bill should be exercised in the lifetime of this Parliament, I believe that sunset and sunrise are appropriate.

My Lords, nobody is better suited than the noble Lord, Lord Kerr, to inject into a debate on a European-related matter a degree of intricacy, complexity and subtlety. He did it with great success in a number of earlier debates on this Bill. However, from my point of view this is not a complex issue. This amendment that we are addressing is not about the substance of the Bill as such but about whether the Bill should contain a sunset clause. That seems a much simpler issue, which can be much more directly addressed. We need to ask only what the objectives of the proponents of this amendment might be and what their motive might be for the future of the Bill.

The Bill is essentially about national sovereignty. It is about the protection of our national political security and about long-term national confidence. It is an attempt to halt the endless drift of sovereignty, salami-sliced over the years, with the erosion of our long-term security and constitutional stability by that drift towards the European Union. All earlier such commitments to restrain that kind of drift seem to have failed. I remember that at one time the watchword was “subsidiarity” and we all cheered subsidiarity around the time of the Maastricht treaty. It was going to make life so much easier and more direct, and stop the endless flow. Of course, it did not and has not and that is one more attempt that has failed.

However, this Bill is for the long term. It is an attempt to stop the rot. No Parliament can bind its successor; that seems to be the simple answer to those who believe that a sunset clause is necessary in the Bill. They say that it undermines our constitutional sovereignty. It does not because Parliament has that degree of sovereignty and could reform, repeal or change this Bill at a later date. Yet in European matters a strand of sovereignty, once lost, tends to prove irrecoverable. Without the certainty of an established position by an Act of Parliament, that trend could resurface and continue. Against that background, a sunset clause would inject uncertainty and short-termism. It would undermine the purpose of the Bill, which is perhaps the objective of the movers of the amendment. This House is here to revise and improve legislation, not to destroy the objective of that legislation. For that reason, the amendment should be opposed.

My Lords, I follow what my noble friend Lord Lang said, but I come to rather a different conclusion. Some of the speeches that we have heard on the amendment moved by the noble Lord, Lord Kerr, have reverted in some ways to Second Reading speeches. I do not intend to move in that direction. I take a very simple approach to this amendment. I have now worked in this building for almost 47 years. Throughout my entire political life I have had the greatest loathing for referenda in principle. I dislike them intensely. I have always taken the view that the more referenda you have, the more people will say, “If you have these, I don’t see much point in being a Member of either the House of Commons or the House of Lords”. I therefore start with a dislike of referenda.

I have reluctantly supported the Bill in all the Divisions that have taken place on it. However, the point I want to make is the one to which my noble friend Lord Lang has just referred. Very simply, at the beginning of each Parliament, why should that Parliament not decide for itself whether it wants to revive this legislation? The amendment suggests that it should be done in a simple way by order rather than by imposing on Governments all the rigmarole of primary legislation. I cannot see why it would be necessary, given the sunset clause, to impose that on a new Parliament.

As many of my friends on both sides of the House will know, years ago I was a business manager in the other place. Early in a new Parliament, before new Bills are ready, there is plenty of time to set aside a day for deciding whether it is desirable to reactivate the European Union Bill. This would mean that at the beginning of each Parliament, following the result of the general election, a decision could be taken that reflected the views of the public. That is what Parliament should be doing and the way that Members of Parliament should operate. I therefore have every intention of supporting the amendment of the noble Lord, Lord Kerr.

My Lords, the whole Bill has had some sense of unreality about it since it started. The more that one looks at it, the clearer one issue becomes. Whatever we do with the Bill, it will not operate in the lifetime of this Parliament. I have never come across a situation in which, in the first year of a new Government, legislation is introduced that is designed to affect not the current Government but the next one. We have had assurances from the Government that none of the issues that will provoke a referendum will happen in this Parliament because the Government will make sure that they do not. What on earth are we playing at? Shall we seriously sit down and produce the details of a major constitutional change against the background of a Government saying, “Don’t bother about it too much, although it may be a major constitutional change”, which moving from a parliamentary system to one of referenda clearly is? The Government are saying to us all, “It’s not going to happen. It will happen only in the next Parliament, but we shall legislate now so that it is on the statute book when the next Government come in”. Frankly, that is unreal and unfair and should be resisted.

My Lords, the noble Lord speaks with great authority and I listen closely to what he says. However, he has asserted several times that the Bill will not operate in this Parliament. It will. A treaty is in the pipeline, with which we will deal next summer—the European stability mechanism treaty. Admittedly, it is exempt under Clause 4(4), but the operation of the Bill applies as much to that treaty change as it may to others. It is not the desire of the coalition or of any member state of the European Union to promote new treaties or rid ourselves of more vetoes. The Bill binds from the moment it goes on the statute book. That is the reality.

Yes, but the Government have assured us time and again during the course of the Bill that there will be no further transfers of powers to Brussels from the United Kingdom and there will be no change in the issues which can be dealt with by majority voting as opposed to those which at present require unanimity. None of that is going to happen in this Parliament, yet the Bill is drawn in such a way that legislation is now being passed in relation to those matters. I do not think that makes any sense at all. If this is a parliamentary system of government, as it is supposed to be, surely it is for the next Parliament to decide whether it wishes this structure to continue. If we go on with this legislation, it seems to me only right that we should have some kind of sunset clause which demands that the next Government, when they come in, have the opportunity to decide whether they wish to go on with this. In those circumstances, I strongly support the amendment.

My Lords, after three long months we are still divided on the single unresolved question of this Bill—whether the proposals here will impact negatively on the UK’s ability to pursue its national interest in negotiations in the EU and whether by asking the people of this country to sanction new changes in the EU we will garner greater popular support for those changes here at home. It is undoubtedly true that the Bill constitutes a significant change to the way we do business in Brussels. What is unclear, however, is whether it will strengthen our hand in negotiations in some cases, as our partners will know that the bar they have to cross over our red lines is significantly higher, or whether, because they know of the high bar, they will find other ways to circumvent our hurdles. Both may well happen, depending on the circumstances.

I wish to set out the reasons why we should oppose Amendment 35 while holding those noble Lords who have attached their names to it in great respect. Amendment 35 seeks to let the Bill expire at the end of this Parliament—that is, in 2015. In subsequent Parliaments, if the Government of the day wish, they can revive the Bill through affirmative resolution and it will sunset at the end of that subsequent Parliament, to be revived again in the next one, and so on. First and foremost, the amendment proposes a series of sunrises and sunsets ad infinitum. If the concern of noble Lords in tabling it is to reduce uncertainty about the UK’s negotiating position, I assure them that it would do the very opposite for those periods when the Bill has expired but has not yet been renewed. Moreover, it goes against the grain of building trust between the people and politicians as the question before every single general election will revolve around whether or not we are to revive the Bill. Rather than increasing trust and confidence in the ability of UK Ministers to bat for Britain, it will raise endless questions before elections about the composition of the team, the batting order and, indeed, about the implications of who might win the toss.

I turn to the period between sunset and sunrise—the hours of darkness, as we normally know them. It might take more than three months to revive the Bill. If we take the previous Parliament as an example, I ask noble Lords to imagine that the Act is already in place and this amendment forms part of it. The previous Parliament was dissolved on 12 April 2010, the general election occurred on 6 May and the Queen’s Speech was on 25 May. Subsection (4) of the amendment states that the revival must take the form of a statutory instrument using affirmative resolution with approval in both Houses of Parliament. Last year the Joint Committee on Statutory Instruments first sat after the election on 23 June and would then have considered orders, including, let us imagine, those to renew this Act, laid them on the Order Paper, and approval Motions would have been timetabled in both Houses, would possibly have been defeated, and then possibly resubmitted.

Lest noble Lords lose the drift of my remarks, I am trying to illustrate that between the sunset and sunrise, if the Bill had been in place, a period of potentially three months or more would have passed. If the Summer Recess had come in the way, the period would have been possibly five or six months. The Minister in Brussels who would supposedly have been negotiating on our behalf would effectively have been operating without the security of knowing the legal position back home on the requirements for the agreement.

I know that noble Lords who support the amendment would say that the fallback position during that period would have been the European Union (Amendment) Act 2008. However, what are our European partners meant to do—carry around several UK Acts of Parliament to see which one applies at a particular time of the electoral cycle? At the beginning of every Parliament, parliamentary time would need to be expended in reviving the Bill. It would make our negotiations in Brussels even more cumbersome, because during that period Ministers would be in a state of flux, not knowing whether they were to operate under one system or another.

Finally, I turn to the point made by the noble Lords, Lord Kerr and Lord Richard, and others, that the Bill is intended solely to influence future Parliaments. It is not so designed. While it is true that the coalition agreement does not envisage handing over powers and competences during this Parliament, the coalition agreement is not the law of the land today. It is this Bill when it becomes an Act of Parliament that will enshrine those provisions in law. I urge noble Lords to oppose the amendment.

My Lords, I support the amendment. I start by saying that I am an unashamed opponent of referenda and always have been. It is not therefore surprising that anything that limits the operation of referenda inherently attracts me, as the amendment does. It is entirely reasonable that this piece of legislation, if it is to be passed, should be regarded as being wholly exceptional—which it is constitutionally—because it extends the range of obligatory referenda on a massive scale and fundamentally alters the balance of the constitution in that important respect. The Bill should be regarded, if it has to be passed, as a provisional experiment. I would regard it as a rather dangerous experiment that is subversive of the normal principles of parliamentary government.

If it is to be regarded as a dangerous experiment that political exigencies require—although I do not share that view—it is perfectly reasonable that one should mitigate its consequences by providing within the Bill for a rapid and effective procedure for terminating the mischief as soon as possible. It is for that reason that I support the amendment.

My noble friend says that he is fundamentally against referenda. Does that mean he is against the referendum that confirmed our membership of the European Union? Should there also be no referendum if we were to join the single currency?

I am fundamentally against referenda. I would not have favoured the holding of that referendum, but that does not in any way mean that I do not accept its result, especially as it was one that I politically favoured.

My Lords, when the noble Lord, Lord Kerr, spoke in the very first debate on the first amendment in Committee—or perhaps it was on Second Reading—he said that he was like a minor character in Shakespeare referred to in Act 1, Scene 1, and never heard of again. It has, however, been to the benefit of the entire House and the Committee that instead he has been bestride the stage like a colossus. Great as my respect for the noble Lord is, I do not feel that a sunset clause on this Bill is any more appropriate than a sunset clause on a local government reorganisation, a National Health Service reorganisation, or anything else.

However, there has always been an argument for attaching a sunset clause or a sunset condition to some EU legislation with great advantage, because so much EU legislation is irreversible. That is a point that I have made before, but I repeat it simply because I think that that is the problem of connection between the public, Parliament and the EU, and one of the reasons why there is scepticism and mistrust about the European Union.

Is the great distinction about referenda which the noble Lord is making—he has made it twice this afternoon—whether a decision once taken becomes irreversible, and that in that category there should be a referendum; and that in other categories there should not? If so, why will there not be a referendum on reform of the House of Lords? Surely that will in practice be an irreversible decision. Once you have a democratically elected legislative Chamber, you can hardly go back on that.

I have not heard that there is not going to be a referendum on legislation for the House of Lords; I have heard many people speculating that amendments may be moved. We shall see, and I shall see how I vote on the interesting suggestion made by the noble Lord.

It has been said that this debate has at times been something of a Second Reading debate on many of the amendments. That is because the Bill has been misrepresented in several of the debates in an exaggerated way. The noble Lord, Lord Howell, has made it clear again and again that we are not going to get a plethora of referendums, for several reasons. First, changes in competences and powers tend to come in packages, in treaties. Secondly, we have been assured many times that we will not have more great treaties. The fact that certain vetoes and certain competences remain after we have had Lisbon, Nice and Maastricht shows that there are very good reasons why national Governments wish to retain them. No Government are going to invest a huge amount of political capital in pursuing some relatively minor matter. That is not how these things operate; they tend to come in packages.

People talk about these issues being trivial. We are talking about competences and powers. We are talking about vetoes, for example. The noble Lord, Lord Kerr, referred to the amendment very well proposed last week by the noble Lord, Lord Davies—I think it was Amendment 22A—about exempting defence procurement from the requirements of the internal market. He said that that is something that could advantage the country, and surely we ought to have the flexibility to move to QMV. Actually, I think it is important to be able to buy certain types of defence equipment and certain weapons, or produce them where you want to, and not have them subject to the full rigour of the market. In the previous Government, Des Browne himself—now the noble Lord, Lord Browne of Ladyton—said that he regarded that as a vital power to be retained by the British Government. Judging by the previous Government and what the former Secretary of State said, that is an extremely important power for this country to retain.

The noble Lord said the Bill was otiose because the Government were not intending to hold referenda in this Parliament. As the noble Lord, Lord Howell, said, the Bill will apply in this Parliament. It is not otiose any more than the Act giving effect to the Maastricht treaty. It had an opt-in for Britain to opt into the euro, but it was made very clear that we were not going to opt into the euro in the next Parliament. That did not make it otiose.

Then we have heard the argument that we are legislating for future Parliaments, but of course it is perfectly open to any future Government to repeal the Bill. With great respect to my noble friend Lord Jopling, we would be getting the worst of all worlds if we enacted the Bill but then said that the whole floodgates could be opened again without any specific intention at the beginning of each Parliament. I can think of nothing that would inflame public opinion more and get the tabloid press—about which we have heard a lot in this debate—going again than if, without any specific intention, a Government decided at the beginning of each Parliament to open the floodgates to the reversal of this legislation. We are told that it will lead to inflexibility in negotiations. However, other countries have procedures that take a long time and they have certain provisions on which they have to hold referenda. We have seen how it takes time for some of these treaties to be legislated for in other countries. Therefore, I do not think that the position of Britain’s negotiators would be any different from that of other countries.

What has been confusing in these debates is that this legislation is about competence and powers, whereas people try to make it about issues and policies. Nice, Lisbon and Maastricht have all given a tremendous amount of power and transferred sovereignty to the European Union. What in terms of power and competence do the Opposition and those opposed to the Bill think the European Union needs? What is the issue? What is the European Union not able to deal with at the moment? We have had many changes in recent years. The United States constitution has had only 27 amendments since coming into existence but we produce endless changes. The European Charter of Fundamental Rights was written in very dense language and was much longer than the Universal Declaration of Human Rights or the charter of the United Nations.

The noble Lords, Lord Kerr and Lord Hannay, have certainly enlightened our debates with their enormous expertise and very abstruse knowledge of difficult and complex issues. However, when I listened to them I was reminded of what Winston Churchill said when he became Chancellor of the Exchequer. He came out of the Treasury and said, “These chaps speak Persian. I prefer generals and admirals”. Of course, the contributions of the noble Lords, Lord Hannay and Lord Kerr, have been extremely important and enlightening in these debates, but I think that with some of these abstruse issues—the language used and so on—there is a real problem of connection between ordinary people and the European Union.

What has not been recognised enough by opponents of the Bill is the tremendous crisis that is taking place in Europe over the European Union. We have seen dramatic changes in public opinion on European integration in countries such as Finland. However, I would particularly single out what has happened in Holland. Throughout my life, Holland has been the most pro EU-integrationist country in Europe; now, it is the most obstructionist. It is strongly opposed to the bailouts of Greece, Ireland and Portugal and it wants to dismantle the Schengen provisions as well. The Bill draws a red line to say that in this Parliament, and beyond if this Government are re-elected, there will not be a transfer of powers. It seems to me to be sensible legislation and we should be determined to carry it forward. I think that the red lines we are drawing will go some way to restore some trust in the European Union.

My Lords, after so many Second Reading speeches at a Report stage, it may well be sunset before we reach a decision on this amendment. I have only one thing to say following the comments of the noble Lord, Lord Lamont. My experience in this place has been that your Lordships’ House has always been quite reluctant to call for sunset clauses—we do not do so lightly. They are a very important instrument and one has to treat them with great respect and care. The noble Lord, Lord Lamont, asked: if we have one on this Bill, why not have one on a number of other pieces of domestic legislation? I agree with him. I would not want to see a sunset clause on those pieces of legislation that he mentioned. However, there is a big difference between those and this piece of legislation.

This Bill has huge constitutional implications, but it is a step in the dark at the moment for us because we do not quite know what they will be. As it is of such huge constitutional importance, I feel that there should be the safeguard of a sunset clause because the next Government will be in an experimental stage of having to see how this legislation will be implemented. I do not think you can group this piece of legislation with other kinds of legislation and say that if you want a sunset clause on this, you should have it on the rest. This is a special case. It needs to have a sunset clause in order to be sure that when we step out into the darkness—it will be dark when the legislation first starts to have an impact—we can, if necessary, draw back from the brink.

My Lords, as usual, my noble friend Lady Falkner hit the nail absolutely on the head. One effect of the amendment would be that at every general election all parties would be asked to pledge themselves to revive the Act. That is the effect of this amendment. They will so pledge, at their peril, because, make no mistake about it, this Bill will be popular with the public as the public want more say over what is happening in Europe. The public are fed up with Parliament ceding more and more powers to Europe without any consent from the people whatever.

The only difficulty is that there will be a period at the beginning of each Parliament when the Act will not operate. That could cause difficulties and it will certainly not increase confidence in British Governments’ handling of European matters. I would have thought that that was one of the most important matters with which we are concerned in this legislation. We want to increase confidence and not destroy it. I cannot imagine anything more likely to destroy confidence than having a period at the beginning of each Parliament when the safeguard for the British people did not operate. In practice, of course, it will not happen because every single party, as a matter of self-preservation, will say, “Of course we will renew the Act”.

My Lords, I would like to follow the noble Lord, Lord Grenfell, because he has been correct in what he indicated. In debates in this House, we have had a great deal of speculation because we live in a world where we cannot be sure what the future will look like. Increasingly, that is the kind of world in which we live. The noble Lord, Lord Grenfell, who has profound experience, having been, for many years, the chairman of the European scrutiny committee, is absolutely correct in what he says. We are passing legislation which is likely to be tested by coming events in future years and yet we are doing it without giving ourselves any provision for insisting on a review of what we do over the next decade or so.

I shall mention one or two of the speculations that we have discussed in these debates and not agreed upon. One is the proposition which has been advanced on several occasions by the noble Lords, Lord Kerr and Lord Hannay, which is about the possibility that our representatives in Brussels ministerial meetings will find it extremely difficult to support even those things that they profoundly and sincerely believe are in the British national interest because of a fear of setting off a referendum. The noble Lord, Lord Kerr, may be right in that and he may be wrong, but the only way to find that out is by experience over the next few years.

Secondly, there has been a great deal of speculation about whether there will be major new issues that might require an amendment to the treaties. Curiously, the noble Lord, Lord Howell of Guildford, hinted at one such when he talked about the possible major revisions of the European Union Stability Pact. Of course, that applies only to eurozone countries, but anyone who believes that it will have no implications for the United Kingdom must be living in a world a very long way away from the global financial world of which we are a part today.

We are talking about speculations, but that does not mean that we should not pass Acts of Parliament; it means that the case for looking at them and requiring them to be looked at is extraordinarily strong, and stronger than the case for almost any other kind of legislation that one can think of. I differ a little from the noble Lord, Lord Lamont, much as I respect him, because I can think of quite a few bits of legislation, with domestic implications, that would have gained from a sunset clause. There are one or two pieces of legislation all of us today would be only too happy to have seen off the statute book if there had been an opportunity to revisit them, which there so rarely is.

My next point is with regard to the coalition agreement. On this, I address specifically my friends in the Liberal Democrat and Conservative parties. The coalition agreement, in its wisdom, made it absolutely clear that we should be willing to accept a referendum lock on major amendments to treaties. That is what it says. The major amendments to treaties that we talked about in these meetings, and here in debates in the House of Lords, have ranged from changes to the Schengen agreement, changes to the original euro agreement, and changes that might introduce a common foreign policy or a common defence policy. I freely admit that in this Chamber, we are all agreed—I congratulate the Government on persuading us on this—that there should indeed be a referendum lock on this limited number of crucial issues.

It is also clear that many Members of this Chamber are profoundly concerned, as my noble friend, Lord Taverne, pointed out, about the thought that that group of very tightly disciplined and described referenda might drift into a general practice of referenda of a kind that will destroy parliamentary government; to put it in a non-abstruse phrase: adding a kind of Berlusconi sauce to the solid pasta of British parliamentary practice. I, for one, would be most reluctant to go along that track. My noble friend Lady Falkner is quite right to draw our attention to that, but at no point does the coalition agreement come to terms with the idea that now we will be imposing every change in the passerelles to a referendum—not just an Act of Parliament but a referendum. No one in the coalition is obliged to support that because it is not part of what was agreed in that original agreement.

My third and final point is precisely the one made by the noble Lord, Lord Waddington, and my noble friend Lady Falkner and I take exactly the opposite view. It seems to me that one of the great advantages of proposing that there should be a review at the beginning of each Parliament is exactly that that will drive the debate back in the general election itself. What more democratic a structure could one choose to find, one where people would be likely to vote, likely to show an interest, likely to debate the issues before them in television, radio and in the street, than a general election? There is the fact that we would have to agree this legislation again at the beginning of each Parliament, in its very simple and short way, as has been pointed out—the statutory instrument agreed by both Houses. It would take no more than 24 hours, if one wanted to do it that way. The essential point is that no more democratic a process could be found than a general election, in which we should reach a decision on whether we want to continue with this legislation. That is far better than suddenly plucking a referendum out of the air at some point in the Parliament, when most people would be interested in other things and its salience would be low.

So on the grounds of the speculative basis on which we are passing this legislation, of extension of referenda far beyond what our Parliament would want to see and of forcing the general elections to take on a major debate of our relationship with Europe and all the trust that would flow from an election result, I believe that the case for a sunrise and sunshine amendment—I say sunshine deliberately—could not be better argued. I strongly support the amendment in the name of the noble Lord, Lord Kerr, and his colleagues.

My Lords, we have had quite a bit of experience recently of sunset clauses, or proposals for sunset clauses—we may keep that to the back of our minds. This amendment would bring Part 1 and Schedule 1 to the Bill, if enacted, to an end at the end of this Parliament. That gives the Secretary of State the power to provide by order, subject to approval of both Houses of Parliament, that the legislation is revived for a further parliamentary period—and so on until the end of time. I did not use the phrase of the noble Baroness, Lady Falkner, about an endless series of sunsets and sunrises because I reserve that to my wishes for the next 20 years for my personal life.

What is the purpose of the amendment? It is to provide an opportunity to monitor the legislation, to see how it is operated, if at all, and to see public reaction, in particular whether it has succeeded in its principal objective of improving the connection between the public and the work of the European Union. I would be very interested in that. If this legislation goes through, we would like to see an improvement in that connection and the legislation is directed to do that—let us see if it has made progress in that area. If the legislation is judged to have been successful, it is of course a relatively simple matter to continue it for a further period.

This clause does seem appropriate in this Bill, which is a constitutional innovation, switching from Parliament to national referendums the decisions on a list of issues, and for that reason I support Amendment 35.

My Lords, I am afraid that this amendment, if accepted, will be seen by the British people as an unambiguous attempt to wreck the Bill, and so I can but advise your Lordships not to accept it. Not for the first time I must ask your Lordships to see and accept that, uniquely on this issue of our EU membership, your Lordships’ House is strongly and increasingly out of tune with public opinion. We have even managed to debate for many days a European Union Bill which does not address the two key issues about our membership: the disaster which is the euro and the fact that we avoided it, and whether we want to stay in the European Union at all.

I congratulate the Government and the Foreign Office on managing that feat, but it does not make your Lordships’ House any more relevant or popular to the people we are supposed to serve. The British people are not stupid. They are in fact much cleverer, much more patriotic and altogether nobler than their political class. They also work in the real world to earn the salaries to pay the taxes to keep us, the political class, afloat in the style to which we have become accustomed.

Of course the political class does not like referendums. That has been very clearly set out in our debates, and today by the noble Lords, Lord Deben and Lord Brittan, and by those who have tabled and support this amendment. However, the British people are showing strong signs of wanting more referendums, and on this issue all the latest polls show that something like 84 per cent of the British people want a referendum on our EU membership—in or out—let alone the comparatively minor issues covered by this Bill.

The British people understand that what is happening to the people of Greece, Portugal, Spain, Ireland and other countries is entirely the fault of the discredited project of undemocratic European integration with its attendant euro. It is not just in this country that the public are moving against EU membership and their political class—and, therefore, I might point out, this amendment. I do not suppose your Lordships have noticed the very recent opinion poll in Norway. Norway has moved a long way: according to this poll, 66 per cent are now against EU membership, with only 26 per cent in favour. Opposition to EU membership is highest among people under the age of 30, with 77 per cent against and only 15 per cent in favour. As the noble Lord, Lord Lamont, has reminded us, opinion is moving strongly in France, Germany, Finland, Holland, Austria—in fact, hardly anywhere in Europe is EU membership still popular.

Would the noble Lord agree that the whole tenor of his speech—it is something like the sixth time I have heard it, during Second Reading, Committee and Report—is that he supports the Bill because he believes it is a step on the way to us getting out of the Community? That is why he supports it, and I hope that anyone who votes for it understands that.

My Lords, as I said on Second Reading, I think that this Bill is a “thus far and no further” Bill, and therefore it is to be welcomed. However, it is also a “shutting the stable door” Bill, because the European Union already has all the powers it needs to continue down its very unfortunate path towards complete integration, in the teeth of the growing opposition of the people of Europe.

May I suggest to the noble Lord that perhaps the reason why the noble Lord, Lord Kerr, opposes the Bill is that it represents a potential barrier on the movement towards complete European integration which is his objective?

I am very grateful to the noble Lord—my noble friend, if I may refer to him as such—for pointing that out, and he pointed it out much better than I did. That is true: the movers of this amendment and the people who oppose this Bill do actually want an integrated superstate of Europe run entirely by the political class, having destroyed the democracies of Europe—which was always the big idea behind the project.

The movers of this amendment and those who will support it are attempting to swim against the tide of opinion here and in Europe. That tide in the end will prove irresistible, so I oppose this attempt to do so.

I beg the noble Lord’s pardon but some of us still have something to say on this. I hope that he will indulge us. You were talking about sunsets and sunset of course is, as we have heard, the time before darkness descends, a time when hobgoblins and wicked elves come out to play—or stand up at the Dispatch Box. On Monday the noble Lord, Lord Liddle, in one of his passionate interventions, suggested that:

“We are not wrecking this Bill; we are trying to improve it”.—[Official Report, 13/06/11; col. 582.]

I trust that he will not be standing up this evening to say the same thing or, if he does, I hope he has a different scriptwriter. This amendment is clearly designed to wreck this Bill, to cast it into darkness.

A sunset clause is a wholly inappropriate tool for such a mighty matter. It is like promising to love a woman faithfully for this night and for all nights, but then wanting a review after the weekend. I have never found that much of a basis for a healthy romantic relationship. This amendment once again is an attempt to duck and dodge the will of the people. That is not much of a basis for a healthy political relationship, either.

It has become clear in these debates that the usual suspects have little trust in the people. Indeed, the noble Lord, Lord Hannay, as good as admitted it just a moment ago. But now they go even further—they do not want to trust this Mother of Parliaments either. They want to bind her hands, throw her into the sea, watch her float off into the sunset and disappear. They have made great cause in these debates around the proposition that Parliament must decide, and I must admit that I have some sympathy with their position. They have argued their case with passion, but they have failed to argue it with consistency. It is clear that they are promoting the sunset clause because they do not want this Parliament to decide, any more than they want the people to decide.

The amendment is not only bizarre but unnecessary. There is an alternative, of course, which would cover every one of the arguments put forward by those supporting it. It is simple: campaign at the next election to repeal the Act, campaign on a platform that the powers given to the people should be taken back, fight on that basis, win the election and do it. Then we could all go back to counting flocks of phantom sheep and dumping tens of thousands of tonnes of fish back into the sea—problem solved. To achieve that, they do not have to persuade this Parliament but simply their own party. However, I sense that that will not happen, and I suspect that we all know why. Even if they managed to persuade their party, they fear that they would never be able to persuade the people.

I am surprised that the noble Lord, Lord Pearson, objects to the amendment. If it is passed, it will turn our general elections on their head. It will drench them in one issue: do you want to continue to have your say on Europe or not? I know that the noble Lord is a modest and moderate man, but I cannot understand why he is not jumping to his feet in excitement at the prospect. It would hand him exactly the election tool that he wants.

The noble Lord, Lord Pearson, is also a bear of remarkably small brain. The noble Lord, Lord Dobbs, has made a very good point, and I may well vote in favour of the amendment.

I ask the noble Lord to consider carefully at this point. A sunset clause is like a great sulk. It is like retiring to our castles after the battle is lost and pulling up the drawbridge. The world is not like that any more—although, gazing along these Benches, I see that there may be one or two noble exceptions with castles and drawbridges. Our duty today in this place is clear. We are here not to indulge our own interests, but to serve the people. I mentioned that great film “Casablanca” on Monday. There comes a point in the film, after the usual suspects have been rounded up—it is the most important point of the film—and as the plane is waiting to take off, when Bogart turns to Bergman and reminds her that there is a bigger game to play that overrides their own interests, and that if they fail to recognise that, they will come to regret it: maybe not today, maybe not tomorrow, but soon and for the rest of their lives. There is a higher cause here—a bigger game to play. It is the future of the European Union. It is in question as never before and only the people can rescue that future. That is what this Bill is all about: giving the EU back to the people.

It is also much more than that, for in a sense it is not about Europe but about us and about this country. It is not about little England but about the great British people—about how we govern ourselves and how we show the people, at last, that we give a damn about what they think. The principle of placing our trust in the people is something that is eternal and indivisible. It is not just for a few days or for a single Parliament—and most certainly not for the convenience of politicians who have failed to carry the argument. We have a duty to listen to ordinary men and women of great common sense. If we do not—if we refuse—we deserve to be thrown on that rubbish tip that Mr Clegg is even now preparing for us.

My Lords, I was amazed that the name of the noble Lord, Lord Pearson, is not on the amendment. I was also surprised at the remarks of the noble Baroness, Lady Williams, who is well known throughout the country as a very wise head. However, the effect of the amendment, and the idea of a sunset clause, would be to give those who want to sever any relationship between this country and the European Union an opportunity at least every five years to have a platform with a specific objective in mind and to achieve it. That would be unwise. I am not sure whether anybody in the Chamber has not made up their mind on the Bill, but I will assume that one or two noble Lords are subject to persuasion. There could be nothing less attractive for somebody who believes in European Union than putting in a sunset clause. It would turn every election into a referendum on the European Union. Nothing would do more damage to the European cause because everybody would come out of the woodwork to oppose it and to run single-issue campaigns. We know that they work, because campaigners for hospitals, and environmental campaigners, have won seats in different countries. Single-issue elections are the most dangerous type, and I fear that we would open up a Pandora's box. Those who passionately oppose the Bill are shooting themselves in the foot with this amendment.

The noble Lord, Lord Lester of Herne Hill, made the point that he had seen the Irish constitution in action. The Irish are very proud of their constitution. The Irish Government accepted, after the first referendum on the Lisbon treaty, that they had provided an overcomplicated form of information to the people, and subsequently corrected this at the next referendum. Nevertheless, people are still passionately in favour of their constitutional rights. If one goes to anybody in the Republic and says, “This is too complicated—the Government put forward all this stuff and we could not understand it because it referred to treaties and articles”, and then asks them whether they want to retain the right to have the final say, they will say yes. Even though there is a complication in a referendum on a single issue—it can be very difficult—the people in the Republic passionately believe in their right to choose. You would not find anybody in the political establishment in Dublin who would challenge that.

The noble Lord has the advantage of coming from the northern part of the island of Ireland. As I said, I have the advantage of having lived in the southern part for many years as a blow-in. Is he aware of the fact that the reason that the constitution has been interpreted to apply so indiscriminately to so many referenda is not that the Irish people decided that but that a very narrow majority of the Supreme Court of Ireland so decided, against the powerful dissents of others? In other words, it was a curious judicial decision and not a popular one.

I take the point that the noble Lord makes. However, he will also know that if there was any groundswell of opinion to change the constitution, proposals would come forward in the Dàil for that to occur. I know of no current or recent Member of that Parliament who would stand up on a platform to advocate it. While the noble Lord is no doubt correct in his judicial interpretation, there is no support in the Republic for removing the right of the Irish people to make decisions on these issues.

The underlying danger of the proposed new clause goes back to the reason why we have the Bill in the first place. It is the “we know best” syndrome: in other words, in both Houses of Parliament, we know best. In many cases that may be true: I believe in parliamentary democracy. However, the reason that we are in this position is that the usage of that right to represent the people has resulted over time in a breakdown in their confidence in the decisions of Parliament on this subject. That is why, as I understand it, the Government are putting forward a proposal which they hope over time will bring a resurgence in that confidence. Noble Lords have suggested reviews. Perhaps, in time, if that confidence is restored, such measures may no longer be required. It is a response to a particular set of circumstances that we face today.

I do not wish to put words into the mouth of the noble Lord, Lord Kerr, or to apply a motive to what he said or to his proposal, but this is effectively a kill-the-Bill amendment. The Bill would be better not passed than passed with this clause in it. What we are actually saying to the public is, nod-nod, wink-wink, “We’ve found a way round this. By the time we get to the next general election, we’ll be able to tear it up again and go back to our old ways”. That would further undermine people’s confidence that we are listening to them and taking this issue seriously. Therefore, I see this as a kill-the-Bill amendment, and I sincerely hope that we do not include it because it will affect every subsequent election. We would open Pandora’s Box. Let us suppose that Brussels, as it is perfectly capable of doing, comes out with a proposal a few weeks before the election requiring us to have straight bananas or something stupid. It could turn the election into a referendum on Europe. Everybody who believes in the European Union, and many here are clearly passionate about it, would not be serving their cause. I hope under these circumstances we will vote not content on this amendment.

I have not taken part in these debates, which have been going on for a considerable time, but I have been listening with great interest to the speeches that have been made in this debate. The noble Lord made a very seductive argument against this amendment when he said that if we were to pass it, it would make continued membership of the European Union a cause célèbre at every general election. I wonder whether that is right. There was a proposal to bring in legislation of this kind in the Conservative Party’s manifesto at the last general election, but not, I think, in the manifesto of the Liberal Democrats, but I am not aware that membership of the European Union was a major topic during that election. I do not think it featured in any of the television debates. Having initially thought that this was a very seductive argument against this amendment, on thinking it over, I am not quite so sure that it is.

I thank the noble Lord for his comments. While it was not an issue of huge significance at the last general election, if you put this into the statute book, at the beginning of every Parliament, this issue would be one of the first items on the agenda. It would have to be, otherwise, as the noble Baroness, Lady Falkner, said, nobody in Europe would know where the United Kingdom stood. If you put it into law that this must happen at the very start of every Parliament, I assure the noble Lord that it will become an issue. If that is so, why should we take the risk, even if he is right and I am wrong, because the next Parliament can do what it likes anyway?

It is unusual, and I find it surprising, but the noble Lord, Lord Empey, appears to have misunderstood completely the purpose of this amendment. I hope that Members of this House who are listening to this debate or who are outside but will come in later on will reflect carefully on the reality of this amendment. This new clause does not in any way damage any other part of the Bill. Whatever one’s views about the Bill—and I do not much like it—there is no damage to be done intrinsically and internally to the text of the Bill. The only differences are the three government defeats so far and what may happen with this amendment when the vote is called. That is all. The rest of the Bill goes through intact. That is part of the Government’s programme, and no one can gainsay that. The noble Lord is raising fears that should not exist in anybody’s mind. I hope he will reconsider because it is very important that the review process that my noble friend Lady Williams referred to, in such a step in the dark with this legislation, is essential at the end of this coalition period to start with and later on too.

My Lords, I tend to agree with the noble Lord, Lord Empey, that this is really a kill-the-Bill amendment. I listened with great interest to the very erudite and eloquent arguments put forward by the noble Lord, Lord Kerr, and others, but if you go out in the street tonight and ask anybody you come across in a pub or a square whether they think that the European Union Bill, which seeks to prevent Parliament passing further powers to the European Union without your consent, is otiose, I think you will find that people’s enthusiasm for this Bill will be further increased.

Amendments to introduce sunset clauses were debated at length in Committee, and I regret that I have heard nothing new today to persuade me that this Bill would gain in any way from the addition of one. It is clear that those who like the Bill do not want a sunset clause and that those who do not like it do. As my noble friends Lord Risby, Lord Lamont and others have explained, there certainly are occasions when the addition of a sunset clause is logical and sensible. Even though another place did not agree, I believe that your Lordships' House was right in trying to amend the Prevention of Terrorism Bill in 2004 and 2005 to include a sunset clause. Similarly, the Anti-terrorism, Crime and Security Act 2001, as enacted, contained a sunset clause. It is surely reasonable to include a sunset clause when a particular set of circumstances, which requires a particular measure to be enacted, prevails, but it is considered that that set of circumstances is likely to change in the foreseeable future. Similarly, it is arguably sensible to include a sunset clause when there is doubt about how an Act will work in practice. In such a case, it would be reassuring to a sceptical public to have a sunset clause that would act as a guarantee that Parliament would have to revisit the question within a specific period of time. However, I do not think such circumstances apply in this case because the purpose of the Bill is to draw a line in the sand and make it clear to the people that the Government will stop doing what they said over a period of years they would not do, but nevertheless continued to do, which is to pass powers and competences to the European institutions without seeking the people’s consent in a referendum. The public do not think that it is likely that this situation will change. Rather, the tendency for this Parliament to surrender powers to Europe is thought by many to be likely to increase and escalate.

Noble Lords should be aware that more than 30 directives covering financial services activities are currently being drafted in Brussels. This morning, I was visited by representatives of a trade association representing a section of the asset-management industry who were extremely concerned about this trend. It is absolutely right that we should work closely and collaboratively with other EU member states on improving the structural framework of the financial services industry, but it is equally important that we work equally closely and collaboratively on those matters with other international partners, especially the United States, Japan, China, Singapore and other countries that have significant financial markets. I believe this is necessary to stop the drift towards a centralised European state. Furthermore, I believe that it will still be necessary to stop that drift in three years, five years or 10 years. There is no reason to include a sunset clause unless you are one of those who honestly and sincerely believe that a federal state is our destiny.

I accept that there are noble Lords who believe that that is the right road for us to follow but I believe that the vast majority of the British people absolutely do not want that. I am delighted that this Government have had the courage to stand up and say that they will not let it happen. Noble Lords who support the amendment have argued that the Bill attacks parliamentary sovereignty. I believe that it does the reverse by preventing the Government permanently surrendering parliamentary sovereignty. If a future Government wish to remove such a safeguard, they will be free to do so—God forbid—but there is no need for this amendment because they will be free to do so by repealing the Act.

I fully agree with the noble Viscount, Lord Trenchard. I have listened carefully to all the points that eminent legal and other brains have put forward, including those from no less than former high eminences from the FCO. But I am a former Member of the other place and I prefer to put my confidence in the House of Commons European Scrutiny Committee of which I used to be a member. The committee suggests:

“The arguments over binding future Parliaments are interesting and the debate will continue among constitutional lawyers and experts. But, in our view, as the UK does not have a single codified constitutional document from which legislative power is derived, there are no unambiguously constitutional ‘higher’ laws. All Parliaments legislate for the future. Laws passed by one Parliament do not contain a sunset clause at the Dissolution. The real point is whether a government can, in law, make it difficult for a future Parliament to amend or repeal the legislation it has passed; in our view it cannot. Our conclusion therefore is straightforward—that an Act of Parliament applies until it is repealed”.

As Professor Hartley commented to the committee:

“[T]he Bill, assuming it becomes law, will be an Act of Parliament. We know that Parliament cannot bind future Parliaments, so a future Parliament could always change it. It could repeal it—totally repeal it—or amend it, or repeal it in part. I don't think that this Bill limits the powers of Parliament, any more than the European Communities Act 1972 does—the original one”.

I agree with that profoundly. I also welcome and support the coalition Government’s commitment to the use of a sunset clause in certain types of regulation—secondary legislation. It is a very good idea because it gives greater scrutiny of secondary legislation, which so often has just flowed through and frustrated many of us who wish that it did not. I congratulate the Government on their Sunsetting Regulations: Guidance, which was published in April 2010. The core purpose of this Bill is greater scrutiny by Parliament and the British people, as well as greater attempts at explanation by the Government of the day.

The referendum in Ireland has already been mentioned. I recall very well going to Ireland and promoting the knowledge that flowed throughout Ireland during its referendum. I cannot allow the moment of this sunset clause to pass without reminding noble Lords that in a 2009 survey, which took place at the time of the previous European Parliament elections and was published in April 2011, a huge number of people in the United Kingdom—81.4 per cent—believed that treaty changes should be decided by referendums—no less than 81 per cent, nearly 82 per cent. In all but two EU member states, more than 50 per cent of respondents thought the same. The level of dissatisfaction in the UK with the EU has increased over the years. The only two countries that have bucked this trend are those which have held referendums on treaty changes—Denmark and Ireland.

In December 2001, I recall very well that, in Laeken, EU leaders declared that EU citizens,

“feel that deals are all too often out of their sight and they want better democratic scrutiny”.

We worked enormously hard from Brussels—in the Commission, the Council of Ministers and the Parliament—to try to “reconnect” with the people of the European Union and we completely failed. It has to be done at grassroots level. It cannot happen from Brussels because it is too far away. The attempt in this Bill is what I would hope would be a beginning of that reconnection. I challenge the Government to offer us more once this Bill has become law, which I sincerely hope it will, but without the sunset clause.

The sunset clause would be a vote of no confidence in the British people. It would say, “Well, we really do not trust you at all. We think that you are okay maybe for this Parliament where we do not think that there is going to be a referendum anyway or at least we do not think that there is going to be a treaty change. But we don’t trust you any further than that. We don’t really want your opinion. We’re going to pick away and pick away at this every single time. We don’t have confidence in you the British public”.

I do have confidence in the British public. I see this as a reform Bill, which seeks to address—I believe that it will do so successfully—and can achieve some form of resolution of the fundamental requirement from which our authority in this Parliament derives. What do the British people want? It is for us to ask them, which is what happened in the Irish referendum. We went out with the package of information. The European Union opened the office and made a huge effort to allow freedom of information flows.

The comment that this Bill is effective only for this Parliament because there will not be a referendum in this Parliament is not the case at all. This Bill has already begun to achieve its purpose. It has got us discussing far more openly for the first time for a very long time the primacy of British legislation and the sovereignty of Britain, which I recall very well we agreed in the coalition document. Yes, we did not agree that there would be referenda on passerelle. In the coalition document, we said that it would be primary legislation but we most certainly guaranteed that no further powers should be transferred to Brussels without a referendum. The passerelle would require primary legislation. We commented on the case for a UK sovereignty Bill, which comes in Clause 18. The coalition document states that there will be,

“no further transfer of sovereignty or powers over the course of the next Parliament”.

If I recall correctly, in the coalition document we declared that the Government would pass down power to the people and away from the centre. The coalition agreement states:

“We share a conviction that the days of big government are over: that centralisation and top-down control have proved a failure … it is our ambition to distribute power and opportunity to people rather than hoarding authority within government. That way, we can build the free, fair and responsible society we want to see”.

The sunset clause would give us a long night of further discontent with the British people and rightly so. I urge noble Lords, despite the feeling of frustration that somehow they do not like referenda, to understand that, as the noble Lord, Lord Waddington, has commented, the British people are thoroughly dissatisfied with the fact that they have not been consulted. This is our opportunity. I think we should grab it and forget the sunset clause.

My Lords, I will not delay the House for long and I certainly will not repeat many of the arguments that have been made extremely well by my noble friends. But I should like to take up a point made by my noble friend Lady Falkner who was seriously worried that the problem would be one of delay when this Bill has to be renewed at the beginning of each Parliament. I am afraid that I come from a more paranoid side on this. My view is that we do not want a sunset clause because, if we had, say, a non-Conservative Government, it might be quite attractive for them to let this Bill lapse. There would be a bit of a row that would last 24 hours and they would get away with it. It would be much more complicated—indeed, almost politically impossible—to put forward a Bill to cancel this Bill, put it out of business all together and repeal it. So I come from a rather different angle but I reach the same conclusion as my noble friend.

My Lords, I congratulate the noble Lord, Lord Hamilton, who has just answered the noble Lords, Lord Dubs and Lord Flight, and has come to the right conclusion. I am no longer bamboozled by this Bill or this amendment.

I am not sure that my erstwhile noble friend should take such comfort from that. One of the reasons people join UKIP is that they are worried that they are going to be drawn further into the European Union, and certainly they will be much reassured when this Bill reaches the statute book that that is not going to happen. I suspect that he will see his membership going into reverse, but that will be his problem rather than mine.

I was interested in the opening remarks of the noble Lord, Lord Kerr. He said that the whole of this Bill is otiose because it would not have any effect in this Parliament. My noble friend the Minister intervened to say that of course it would in terms of updating the stability and growth pact because it was going to be exempted, and there might be other amendments from the European Union. I am afraid that I do not take quite such a phlegmatic view. The eurozone is in a state of crisis at the moment. That makes one wonder, when one looks at the people proposing these amendments, how many of them would have suggested that it was a good idea to join the eurozone some years ago. We all mistakes in politics, but that would have been a major one. If we had joined the eurozone and we were in it today, I can tell the House now that the asset bubble we have seen over the past few years would have been even bigger because the interest rates we would have enjoyed in the eurozone would have been much lower and this country would be in even greater difficulties than it is today.

Let us return to the eurozone. I believe that it is reaching a crisis point, one where a decision has got to be made. Members of the eurozone either have to let the thing collapse and completely disintegrate with defaults happening one after the other, starting with the periphery countries and moving steadily towards the centre, or they have to completely revamp the eurozone so that there is probably a finance ministry or a massively beefed-up European Central Bank. The reason I am boring the House with all this is that that would need a treaty change. The Government would argue that such a treaty change would concern only members of the eurozone, not the United Kingdom, but I have to say that that treaty change would have come through both Houses of Parliament and possibly could be subjected to judicial review as to whether there were transfers of sovereignty as a result of such a treaty change coming through.

Noble Lords might say that that is not going to happen in this Parliament, but is it not? At the moment there is a guarantee on sovereign bonds within the eurozone that will last until 2013, but we have to ask what will follow after that. I have to remind noble Lords that 2013 comes two years before the time when we are to have a general election in 2015. I give way to the noble Lord.

My Lords, I am obliged to the noble Lord. Is he seriously suggesting that we should have a referendum in this country on treaty changes that affect the eurozone, of which we are not a member?

What I am saying is that I am sure that that will be the position of the Government, and I did say that it would be subject to judicial review. It may not necessarily pass the censor within the terms of judicial review that we do not have any transfers of sovereignty involved in such a treaty change. I think that we may well be involved in a referendum, and if we are, I can reassure the noble Lord—I am sure he would like to know this—that I shall very much advocate that we actually support any treaty change of that sort. That is because if the eurozone disintegrates, there might be a bit of schadenfreude from people like me in the Conservative Party, but I have to say that it would give us another major financial and banking crisis on top of the one we have already had. So I will campaign enthusiastically that we should accept such treaty changes.

I do not think we should sit here and imagine that there are going to be no more treaties coming in the life of this Parliament. Things change, and they can change very fast. The eurozone is in a state of major crisis and I am not sure that they can go on putting sticking plasters on it for another four years.

My Lords, a short while ago the noble Baroness, Lady Nicholson, said that the legislation had already served part of its purpose in that it has engaged us in debate. I have to confess to her that I have not run into a huge amount of discussion of it elsewhere. Nevertheless, I do not deny the truth of the point that we have had a major debate, but the points made by many noble Lords still bear testing. It is plain from this legislation that it is not intended that anything other than the passage of the Bill and the discussions on it will happen during this Parliament. I listened to what the noble Lord, Lord Howell of Guildford, said in an intervention, but unless I misunderstood it Clause 4(4) provides for an exemption around the stability mechanism, so that will not become the subject of the whole package of a parliamentary decision and a referendum either. So let us start, if we may, with the reality of the position: there will not be an event of that kind.

The tests that may arise would be likely, if they happen at all, to occur either in the Parliament that follows this one or in the Parliament beyond the one that follows this—some way off. Those are exactly the circumstances which my noble friend Lord Grenfell described—I think he was the first person to use the words—as a step in the dark, and the noble Lord, Lord Williamson, made more or less exactly the same point. One of the things that concerns me, and one of the reasons I have added my name to the amendment so that the Front Bench is offering its support, is that inevitably we will have a period during which we test whether these new constitutional arrangements make sense, work well, are deliverable, do not undermine the Government of the day and do not undermine the parliamentary process. But the plain fact is that we do not know. I doubt if there is a noble Lord in this House who could do more than I can do, which is to suppose what might happen, but we do not know. What we do know is that when it is tested, we are more likely to know. Those are the circumstances under which we will gain any kind of authoritative understanding of what this constitutional change may mean. I do not think we do ourselves any favours by pretending that we know when we do not.

There may well be minor issues or whole treaties. On the former, the noble Lord, Lord Howell, may be right to say that referendums would not arise around smaller things. Periodically, if he is right, they could be around whole treaties, which are much larger things. Moreover, I accept what the noble Lord, Lord Kerr, said, that these are likely to be very unusual events in themselves. What is more, I shall go on to assert something which is critical to the clause because I want to try to deal with this as a debate on an amendment tabled at the Report stage. I continue to assert that some of things which might be considered to be large and significant issues, and therefore may well call for referendum conditions after decisions reached by both Houses of Parliament, will not themselves create the need for a referendum either.

I say that because I do not believe that any Government in the foreseeable future will carry legislation in either House about joining the euro—I can assure the noble Lord, Lord Hamilton, that I have never advocated it, so I can say that with a clear conscience. I cannot believe that either House will succeed in persuading a majority of either House that we should relax the Schengen conditions and change our border arrangements. I know from first-hand experience as a Minister in the last Government that there was not the smallest chance of that happening, or of anyone believing that it would be desirable for it to happen. I shall not regale the House with arguments about an island people and so on, but noble Lords will understand the temperamental mindset of this country over a very long time. I do not believe for a moment that either House would carry by a majority the need for legislation which would then go to a referendum on changing the fundamentals of our legal system from what it is now to one based on Napoleonic law or some of the other systems of law in Europe, and I do not believe that either House, whoever is in Government, would succeed in conceding decisions on our taxation regime to anyone else and put that to a referendum vote. The things that really might bite on the people of the United Kingdom, if they were asked to think about them, will not be put to them. I shall come back to the insurance policy that the Bill claims to be in that context and why the sunset clause is a reasonable solution.

I said in earlier debates, and it has been quoted back at me, that in those areas we should just say no. It is our belief that any Government in the foreseeable future will just say no. Their just saying no will probably have the consequence of protecting what we most seek to protect; that is, the credibility of our parliamentary system in the eyes of the public.

I think that it was said from the government Benches that it would be pretty much inconceivable that anybody would go back with propositions of this kind at a general election or at any other time in the foreseeable future. I do not believe that our elected representatives—I shall not use the phrase “political class”; it is intended to be derogatory and I am not going there—or those of us who have had the good fortune to be made Members of this House will go back with propositions of that kind. There will be an expectation on the part of the public that, in those fundamental areas, we would say no. It undermines public confidence if they believe that we do not have sufficient courage of our convictions to say no to things that are of such importance, and that we require somebody else to do it.

I said a moment ago that I have understood the point of this Bill to be that, in an atmosphere where people do not trust politicians to say no and there has been too much drift, we need to insure ourselves against failing the political test in Parliament. I do not believe that we would do so, but the point is, were we to fail the test or to continue to fail it, this Bill as an Act would be insurance against it. It is like saying that you need insurance against that moment when you have totally lost your marbles, when you really have not understood the fundamentals of political life and have decided to embark on a politically suicidal course of action which nobody would have expected. It is like buying very expensive household insurance but routinely trying to set fire to one’s own curtains, not in order to claim the insurance but just to prove that, somehow, there was another fallback proposition which would sort it all out once you had set fire to the building. It is essentially a silly proposition.

The test of this Bill as an Act will be a test in practice, but the test in practice has the following characteristic—which the noble Lord, Lord Kerr, introduced and a number of noble Lords have described far more eloquently than I can. It is a test of a very profound constitutional change; it cannot be diminished or dressed up in any other way. It is a profound constitutional change, argued for by those who believe that it is necessary as insurance against setting fire deliberately to one’s own curtains.

There is significant merit in bringing together the two themes that I am trying to put to your Lordships this evening. The first is that we are going into an area where nobody can claim to know what will happen; the second is that it is very profound. For those reasons together, I ask what could be the sensible objection to a new Parliament concluding as to whether the legislation was working or whether it wanted to renew it.

I am in absolutely the same frame of mind as the noble Baroness, Lady Williams, in that the one thing that I do not fear is discussion of renewal in a general election. I have heard all sorts of arguments produced during this debate that somehow it would make Europe so contentious that it would hijack the election. Elections are about a wide range of things; we should not delude ourselves otherwise. They are about, among many other things, health, pensions and the economy. It is a very broad canvas. If we had a serious discussion of Europe in the midst of that, I would regard it as a red letter day rather than the opposite, because we have so seldom had that in the past. Discussion of Europe has so often been a set of parodied arguments, on both sides. It has been wholly unsatisfactory and never really given people the opportunity to make a strong assessment of the advantages or disadvantages of our involvement in Europe. I do not accept any part of the argument that, following a general election in which this matter may well have been discussed with great rigour and precision, we should not then say, “Has the test shown us this works? Is the constitutional innovation one that we want to live with for the foreseeable future?”. Those are absolutely sensible political preoccupations.

People have playfully talked about the record of the noble Lord, Lord Kerr, as a civil servant rather as though that should frighten rather than inspire us all. He put the question broadly in these terms: does each Parliament want to see its authority revoked and, therefore, does each Parliament want to conclude that it does not want to see its authority revoked? It may or it may not—I do not know the answer to that either—but it would be a very bizarre understanding of the authority of successive Parliaments in the constitution, unwritten as it is, of our country for that not to be something that a Parliament would be entitled to consider when it was considering constitutional change of this kind. A sunset clause gives that opportunity.

My Lords, I am, as I have said, in danger of repeating myself in these long debates. As I said in Committee, however, it would be completely unprecedented to bring a sunset clause into this kind of legislation, which has constitutional implications and addresses constitutional developments of a kind which have already gone on in the past. The noble Lord, Lord Triesman, in his eloquent summing-up from his side, talked about profound constitutional change. For many people that has already recurred. That is the problem. That is where we are. That is where the disconnect begins. That is where people feel that great changes have taken place but that Governments have not give them adequate assurance that they were in their interests. It is to give people in this modern age of changed patterns of democracy—still a very democratic age, still a very powerful parliamentary age—a say in profound constitutional change that we are putting forward this Bill and seeking to construct something for the longer term.

A sunset clause, I have no hesitation in saying, would terminate that say. It would seriously undermine our attempt to reconnect the British people with the European Union and with the whole European project as it evolves. It would weaken the whole momentum that we all want to see maintained—and I have been involved in European Union affairs probably as long as anybody in this House—in order to have a healthy European Union that has the popular support and consent in the 21st century which at the present it evidently and dangerously lacks. We need to focus on that point again and again unless we want this trend to grow worse.

The view has been expressed again and again, in this amendment and in previous discussions, that the Bill is an attempt to bind future Parliaments. I have to say again—I am not just saying this as a debating point—that that is simply not so. It is not just an exaggeration, it is a canard. It is a well established constitutional principle—to which we have rarely adhered over some say 200, some say 300 years—that no Parliament can bind its successor. It will always be open to future Parliaments to repeal some of the provisions of a Bill, including this Bill, through primary legislation, just as it is possible for this Parliament to seek to repeal or disapply any existing legislation which may well have been painfully and sincerely built up by previous Administrations. In fact this Administration, the coalition, have inherited many aspirations and some excellent work from the 13 years of the previous Labour Government. It has been done. We did not at the time sit over there and say, “You mustn’t pass these laws because although we like them it would be binding future Parliaments”. That is absurd. I will return in a little while in more detail to the non-validity of the whole line of thought that somehow there is a binding of future Parliaments in the Bill.

If the Bill were to have disastrous effects on the UK’s relations with the European Union and tie our Ministers’ hands—all of which effects also are canards because they simply do not begin to match with the reality, which is of course that Ministers will be absolutely free to negotiate, deal and involve ourselves in the many articles under the enormous competencies at present available to the European Union—there is a remedy: the Bill can be amended or repealed. In fact, the Government resisted amendments in the other place that would have entrenched the provisions of the Bill and made repeal more difficult.

So although we hope that the provisions of the Bill will become an enduring part of the UK’s constitutional framework—that is a perfect, sincere, legitimate and well founded aim and ambition—we did not think it right to single this Act out to be entrenched. However, we do think that it is right that any repeals or amendments should have to go through the same rigorous process as the original Bill. We do not think it right that the powers that the Bill gives to the people and to Parliament should just be snatched back or taken away in a cavalier fashion by minor arrangements. In other words, amending or repealing parts of the Bill should be done through a further Act of Parliament, which is the usual approach for primary legislation. I make that point at the beginning because we have seen common misconceptions run through Committee day after day, and they are not founded on fact, reality, present practice or past experience.

Another misconception repeated today—I was bold enough to intervene when the noble Lord, Lord Richard, was speaking about it—is that the Bill will not apply until the next Parliament. I do not understand how that idea has crept into the debate and gets repeated and repeated, because it is simply not the case. Within three months of the Bill coming into force, as I hope it will, we will use its provisions to make a statement on whether the recent European Union treaty change to Article 136 constitutes a transfer or power competence. As we think that it does not, we will then introduce a Bill to ratify that change. Without the EU Bill, none of that would happen.

The noble Lord, Lord Triesman, is right: that will not trigger a referendum because of the items under Clause 4(4). However, the Bill will certainly operate and apply in this Parliament to a treaty change that goes through the necessary procedures in this Parliament. It is true that we do not expect to hold a referendum under the Bill during this Parliament, because the coalition Government have said that that they will not agree to any treaty or passerelle that could transfer competence or power from the UK to the EU in this Parliament. However, the existence of the Bill is still a binding force. It is binding on this Government and their actions and views. What I have stated is a political view and an intention of the coalition. It is not the will of Parliament or some entrenched and deep unavoidable force. It is the will of the Government. As we know—perhaps I should not add this point—it is possible for the will of the most determined Government suddenly to go into little U-turns and reverses from time to time. It has happened to us all.

The Bill provides for the promise that we have made, and for that promise to be tested. I hope that we can stand up to the test. It provides an additional safeguard of a referendum should the Government fail to keep their promises. In short, it is complete nonsense to assert—and for some reason people I admire very much in this House have kept asserting—that the Bill somehow does not apply to the present Government and the present Parliament. Of course it applies. It will apply from the moment it reaches the statute book.

I also point out that the same noble Lords are coming at the Bill from two opposing directions, which makes defending and promoting the Bill a little confusing for those of us standing in my position. On the one hand, we have had the heavy criticism that it could lay us open to frequent and trivial referenda. The more that one examines how the whole system of Brussels works—works today and has worked in the past, as many noble Lords know very well—the more obvious it is that that will not happen. Yet in the same breath we are criticised for saying that we do not expect there to be a referendum in the next four years. Both those propositions simply cannot be true.

Noble Lords raised the concern that we are setting a precedent for the extensive use of referendums in areas to which they are not suited. First, I do not think that it will be extensive. I will come to the point about the seriousness of the issues to which various items in Clause 6 and Schedule 1 relate, but we are certainly not the first British Government to devolve power to the British people to decide on important issues. Just think back to the Scottish and Welsh devolution referendums at the end of the 20th century, or those for regional assemblies.

We would not be alone among member states in having requirements for referendums on EU matters; one has only to look to Denmark, Ireland or the Netherlands for examples. Indeed, I am advised that only five member states of the present 27 have never held a referendum on an EU matter.

The sunset clause proposed would set a thoroughly undesirable precedent. It is perfectly true that sunset clauses have been used, for example, where the policy is time-limited, as some of my noble friends said and the noble Lord, Lord Risby, pointed out, as is the case with the Public Bodies Bill, or where there is a need for parliamentary supervision of short-term emergency measures such as those relating to counterterrorism, as was pointed out by some of my noble friends. However, sunset clauses have not been used to limit the applicability of legislation on a long-term policy. It would be completely the wrong message to provide for a means to consult the British people on important issues only to use an obscure technical device to remove that provision before it could be used.

In this case we are not talking about a sunset clause to limit the powers of the Executive—the high and mighty Government—which should, after a while, be removed again. We are talking about a sunset clause to limit powers that have been given to the people: powers that have been devolved from the central authorities, with Parliament fully involved all the way along. Another canard in all this is that Parliament is not involved in any of these arrangements and the referenda processes where they do occur. Clearly the proposition in this case that a sunset clause would limit the powers of Government is upside down: it would limit the powers handed over to the people.

The noble Lord, Lord Grenfell, rightly said that, in this case, it really is different. There is a huge difference. The difference is that we would be seeking to limit and take away powers that had been devolved from the central authorities and from the state instead of using the sunset powers that we normally have to limit the powers of the state for certain purposes over a certain length of time.

If I sound a shade negative to your Lordships, one aspect on which I would like to strike a more positive note is that I welcome very much the acknowledgement put most eloquently by my noble friend Lady Williams but echoed by others that there now seems to be general acceptance of the provision for a referendum lock on key constitutional issues. There is also consensus on the provisions in Part 1 giving Parliament greater control, which is very good. That is certainly an advance. I suppose that one is left with a little puzzle. If this is now accepted as the right way forward, why would we want a sunset clause or legislation to question all those principles? The only difference that remains between us—and it is getting narrower—is what those fundamental issues of constitutional significance are.

The Bill is complex, as I recognised the other evening when answering the noble Lord, Lord Rowlands. It sets out a whole range of what look like small issues but are in fact the wires sticking out of the six big, red-line issues that are of fundamental constitutional importance. Some of your Lordships have found difficulty in grasping that and yet here they are before me. Under my hand are the six great issues of foreign and defence policy, justice and home affairs, citizenship and elections, rights of membership and enlargement, social security and employment policy, and economic and tax policy. Successive Governments, both before and after the Lisbon treaty, have said that these matters must be ones of great significance to our country and that we do not intend to see any further transfer of power or competence in these areas—or, if we do, we have to put a very good case to the people and they should have a say. The proposed new clause goes the other way. It risks disconnecting the British people from important decisions being taken in their name. It removes the certainty that the Bill provides and leaves an unstable foundation for building a better relationship between the people and the European Union.

I will say a word in detail about sunset clauses and legislation because that is what the amendment is about and we must focus precisely on its provisions. I repeat that a sunset clause in this legislation would be an undesirable precedent. We have used sunset clauses elsewhere in legislation, for example where the policy objective is time-limited—as is the case, as I have already said, with the Public Bodies Bill—or where there is need for parliamentary supervision of short-term emergency measures. However, they have not in principle been used to limit the applicability of legislation on long-term policy and certainly not for Acts which limit rather than expand governmental powers. That is an extraordinary inversion of the past use of sunset clauses. Prior sunset clauses have generally been for cases where power has been given to the Executive to act on a given issue for a given period of time. The contrast with what is proposed in the Bill is glaring. The Bill seeks to devolve power from the Executive to Parliament and the British people. The amendment would take that power away and in effect give it back to the Executive. That is the big difference. If your Lordships want happily to validate the taking away of power at a certain point in the future from the people then let the amendment go forward on that basis, but it seems a profound rejection of the whole spirit of this age in which we seek to devolve power to the people and not take it from them.

We are all aware in your Lordships’ House that we have set out a new approach to reducing regulation by requiring some form of sunset provision for all new regulation where there is a net burden or cost to business. That is in order to reduce the regulatory burden that unnecessarily halts growth, reduce the overall volume of regulation, help improve the quality of design and so on, and ultimately reduce the cost of regulation on business and society. None of these aims will be fulfilled by including a sunset provision of any type in this legislation. Moreover, it has previously been claimed that, where there is a proposal for legislation that would address short-term or specific policy aims, there should be a sunset provision included in that legislation so that it expires once the aim has been fulfilled. That was part of the argument given in favour of the sunset clause put by this House into the Fixed-term Parliaments Bill last month, and was part of the rationale for the inclusion of a review clause in the Prevention of Terrorism Act six years ago. Those things make excellent sense.

The Bill is not being proposed to address a short-term issue. That is not what we are doing. The erosion of trust between the people of this country and the people who serve them and make decisions on their behalf on whether to transfer further powers or competence to the European Union means that we need to do something now. What we do should become part of an enduring, constitutional framework so that the British people can have their rightful say on the issues where they want one. The noble Lord, Lord Triesman, touched on this—that the matter ought to ride above political parties. It is in the interests of the established structure of this Government that we can develop a pattern and framework of this kind. I find this extraordinary, though I can see some people’s motives here. I suspect that some of those motives run very deeply and sincerely into issues about our whole attitude to the European Union. The general proposition that we should provide this kind of lasting framework, and not one that you simply knock out with a sunset clause, ought to be supported by all political parties and indeed by those of independent mind who play a key part in the legislature and work of both this House and Parliament generally.

It is our firm intention that the provisions of the Bill should become an enduring part of our constitutional framework. That is not a new proposition. Other areas of policy have been established successfully on a long-term basis. I gave the example in Committee of privatisation. A previous Government of whom I was a member established the privatisation provisions in the hope that they would endure—they have done. That was not binding a future Parliament but setting out a new pattern of industrial structure and accountability in this country which endured. I do not remember anyone in the successor Government under Mr Blair saying that they had been bound in some wicked way by the previous Tory Government. It has always been open to Parliament to repeal or disapply the relevant legislation. There are lots of other examples. The national curriculum was set up more than 20 years ago and the essence of it remains in place today. There was the devolution of Scotland, Wales and Northern Ireland, approved by a previous Parliament. The Governments of whom I was a member did not feel bound by that. Then there is the European Communities Act itself.

In short, the amendment would be going back to the old ways. It would take power to the centre again, back to the central authorities and to ministerial discretion. The principle behind it seems to be that we had better not put these matters to a referendum, or not for long, because people might be wrong. I am reminded of Bertolt Brecht’s sardonic remark that when the government and the people disagree the answer is to change the people. That is the implication behind those who seem to shy away all the time from sharing parliamentary power with the people through appropriate referenda at the appropriate points. That attitude belongs to the 20th century. The Bill belongs to the 21st century and those who support the amendment tonight are looking backwards, not forwards. They should withdraw the amendment, which damages the Bill to the point of destruction.

My Lords, I thank the Minister warmly for responding with his customary courtesy and patrician patience to our obtuseness. I thank all those who have taken part in this little debate. Sometimes it seemed like Second Reading again but it was good to see some new faces not seen in the seven or eight days of Committee. I am always glad to see new people join the debate.

I was particularly grateful for the contribution from the noble Lord, Lord Jopling, who speaks with great authority and who gave the answer to the noble Baroness, Lady Falkner, on how the procedure set out in the amendment could be made to work. I believe that it could be made to work here in this Parliament and I know that it would work perfectly well in Brussels. I have been there during a general election. I recognise that the night, though it could be very short, will not be short enough for the noble Baroness. I accept that.

I agreed very much with what the noble Lord, Lord Waddington, said. There is no doubt that, at least in the first general election, the two parties would make pledges. That is not a bad idea. I agree with the noble Lord, Lord Triesman, and the noble Baroness, Lady Williams, that bringing EU issues into general elections is exactly what we want to happen to deal with the disconnect. It is a far better way of dealing with it than the obscure provisions in this extraordinary Bill.

It makes sense to have a minimum reappraisal of at least once every five years, if we are having fixed-term Parliaments. At the start of each Parliament, it would make sense to ask Parliament whether it agreed that in relation to EU business—though not in relation to any other business—its rights and sovereignty should be subscribed to this extent. It would also make sense to consider who is right about the effects in the outside world, on the developments in Brussels and the British standing there, as well as on the British ability to support and advance the national interest in Brussels. I may be completely wrong, and I accept that, but I think that it makes sense to have a look every now and again and see who is right. Therefore, I would like to test the opinion of the House on this amendment.

Amendment 36 not moved.

Arrangement of Business


My Lords, as this brings the Report stage to an end we are now able to take 90 minutes rather than 60 minutes for what was to be the dinner-break business. That now becomes the last business of the day, which means that the debate will be time limited to 90 minutes rather than 60 and that speakers other than the noble Lords, Lord Barnett and Lord De Mauley, are limited to four minutes.

Barnett Formula

Question for Short Debate

Asked by

To ask Her Majesty’s Government what plans they have to change the Barnett formula to a basis of need.

My Lords, I thank the Minister very much indeed for what he has just said. Perhaps I should wait a few minutes.

My Lords, I know that we have just had an interesting afternoon but we still have great interest in the Question for Short Debate asked by the noble Lord, Lord Barnett. There are 15 speakers—a long list. I invite him to start his speech now.

My Lords, I am grateful to the noble Baroness. I have spoken on this subject fairly often and I have been pressing this matter for a long time. In many ways, I can do no better than to quote the Select Committee of your Lordships’ House in support of everything that I might say this evening. I am delighted to welcome to the debate four distinguished members of that committee: my noble friend Lady Hollis, the noble Lord, Lord Forsyth of Drumlean, and others who I see around. We also have a maiden speaker, who I am delighted to welcome in advance. He comes fresh from the Scottish election and he might be able to tell us rather more about opinion in Scotland, although I have a fair idea myself what the Scottish people are now thinking on this subject.

I have been pressing for a very long time for the formula in my name to be changed to one of need. I told the previous Government that if they had become so fond of my name, I did not mind if they kept it provided that it was based on need rather than on population, as it is now—unfairly, as it has turned out. The first question, of course, is: what is it? Most Members who will be speaking in this debate will know very well what it is. However, the question then is: what needs to be done?

I said that we have some very distinguished members of that Select Committee with us this evening. More than that, it was a very distinguished committee. I had difficulty initially in getting the House to agree to an ad hoc Select Committee but we got one and we got my noble friend Lord Richard, the former Leader of the House, to chair it. As I said, it had a distinguished membership including the former Chancellor of the Exchequer, the noble Lord, Lord Lawson. He was a distinguished member of that committee, as were my noble friend and the noble Lord, Lord Forsyth. Many others, including the noble Earl who is a Lib Dem and those from all parties and all regions of the country, were members of that committee and I am happy to say that they came up with a unanimous report. This report needs careful reading because it tells anybody who is the slightest bit interested, first, what the problems are and, secondly, what needs to be done.

The terms of reference were clear. I am not going to bother with quoting too often from the Select Committee's report, because it would take too long and I want to leave as much time as possible to the noble Lords and the noble Baroness who are going to speak in this debate. Even though it has been extended and is now going to be an hour and a half, I am a bit disappointed—I thought it might go on until 10 o'clock. However, I am sure that it will give time to noble Lords to make their feelings felt on the issue, which is: what should be done now? There was a Calman commission, as many will know, on Scottish matters but that had different terms of reference. It was looking primarily at devolution and even though it obviously had to refer to the Barnett formula, it did so almost en passant and did not really dwell on the main issue, as our House of Lords Select Committee did.

I come to the main question: what is the Barnett formula? In case people do not know, I shall quote, which I do not do very often, from paragraph 11 on page 13 of the report. The formula is,

“the mechanism used by the United Kingdom Government to allocate just over half of total public expenditure”,

to the regions. Certain parts of public expenditure are excluded, such as defence, foreign affairs and social security, which are already allocated according to need to a large extent, and do not need to come under the Barnett formula. When the Select Committee looked at the formula in 2007-08, total managed UK government spending was more than £582 million—rather a lot of money to be left entirely to changes in population, which is what happens now. It effectively results in approximately 80 per cent of expenditure in the UK going to England, 10 per cent to Scotland, 5 per cent to Wales and 5 per cent to Northern Ireland. This has varied slightly over the years because of changes in population and Governments amending the formula slightly.

The plain fact is that the formula was still based on population rather than need. That resulted in gross unfairness, as the Select Committee indicated. It noted clearly that the public expenditure allocated to Scotland has resulted in its obtaining substantially more than it would have on the basis of need. The current leader, Alex Salmond—a very shrewd political operator if I may say so—has used those extra funds to huge political advantage by helping the people of Scotland with, for example, university fees and prescription charges. I am sure that this is very welcome but the people of England do not get that. The people of Scotland have benefited substantially. I am told by many people who tell me what regularly appears in the Scottish papers that my name is reasonably well known there. Indeed, Tam Dalyell, the former Member for West Lothian, drops me notes from time to time to tell me exactly what is being said and how often.

What changes should we make? The noble Lords on the committee came up with a very clear answer: there should be an independent commission. Its name is not terribly important, but the committee thought of the UK funding commission. It would look at how the basis of need should be dealt with, and make clear and firm recommendations thereafter. Because there would be substantial changes to Scottish public expenditure, there should be a transitional period so that any changes would be spread over a number of years.

I know that there are political concerns. Any Government making these changes may lose out in elections. I can say only this about the formula that bears my name: when I published a book called Inside the Treasury, which covered my five years as Chief Secretary to the Treasury, the phrase “Barnett formula” never appeared. It appeared only later because the Thatcher and Major Governments not only created the formula but kept it going for 18 years. That is when it became well known. Those Governments did not want to upset the electors of Scotland or Wales. So what happened? In the 1997 election they lost every seat in Scotland and Wales. Please do not worry about upsetting people in doing the right thing and making the right kind of changes that need to be made.

When the Select Committee report was being worked on, the Chief Secretary to the then Government was Liam Byrne. I regret to say that, as his excuse for inaction on the Barnett formula and the need for change, he said that it was too complex. However, the Select Committee has shown that that complexity is just not a fact. It could have this commission that would look into the question of need, and that would be that. Therefore, I have a simple solution for what needs to be done now. My dear friend, the noble Lord, Lord Sassoon, the current Commercial Secretary in your Lordships’ House, who deals with Treasury matters, answered a Written Question of mine about what the Government plan to do. He said that,

“the Government recognise the concerns expressed on the system of devolved funding. However at this present time the priority must be to reduce the budget deficit and therefore any decisions to change”,—[Official Report, 2/11/10; col. WA 380.]

must wait.

I am sorry for going over my allotted time, but I shall just finish; what I intend to say is very simple. I was delighted to quote the noble Lord, Lord Sassoon, who has pleasure in quoting me from time to time, in support of what I now propose. He said that it should not be done because the priority is now the deficit. However, I suggest that it should be done in 2015. The Treasury cannot believe that all its policies will not have come true by that year. I shall formally move in due course on the Scotland Bill. I hope to hear that the Government’s current approach is one that will accept my proposal and hugely endorse everything that the Select Committee said.

My Lords, I believe that we are heading for a real constitutional crisis. The Scotland Bill, which is still in the other place and heading for this Chamber, introduces powers for a separate rate of Scottish income tax. I congratulate the noble Lord, Lord Barnett, on securing this debate, and the Select Committee on which I sat.

As the noble Lord pointed out, the effect of the Barnett formula has been to give Scotland much more than it would have received on a needs basis. The needs basis is firmly established because it is the basis on which the Scottish Parliament distributes money to health authorities and local authorities. There is no magic about this. Professor David Bell of Stirling University has done some work on the size of that amount. Scotland gets around £4.5 billion extra. You cannot change that overnight. It would need to be phased in over a period of years, as the Select Committee indicated.

We need to get on with this. It is the height of stupidity to give a Parliament the power to set income tax rates, but at the same time not deal with the basis on which the baseline funding is achieved. Baseline funding would alter according to policy decisions taken in Westminster rather than in Scotland. That would create opportunities for conflict. Trying to raise £4.5 billion as a Scottish income tax would involve doubling the basic rate of income tax after you allowed for a loss of yield. It is a huge sum of money.

It is therefore imperative that we have a stable, well established basis on which the Scottish Parliament is funded. It should not be open to criticism, and must be seen to be fair to the rest of the United Kingdom for this policy to work. Otherwise, if the Government down here change their policy on health, education or law and order, that will in turn result in a change to the revenue gain to the Scottish Parliament. We now have—contrary to what we were assured would not happen when we had devolution—a nationalist Administration determined to break up the United Kingdom, which will use this as an issue. The noble Lord is right; we cannot have the Treasury deciding how the formula is created; we need to have an independent commission along the lines of the Australian system, which phases its results over a period of time.

I find it extraordinary that the present Government, whom I support, and the previous Government have both taken the same line in saying that it is too difficult to tackle this issue. It should never be too difficult to do what is necessary to maintain the unity of the United Kingdom and to end the resentment which has been created on both sides of the border because of these anomalies. This marriage that was created, the union between Scotland and England, is the most successful the world has ever seen. It is being put under strain because of a failure to address the policy consequences of constitutional change. Parliaments are about raising resources and voting means of supply. It is essential that this is addressed in the Scotland Bill before it has completed its passage through Parliament.

My Lords, the Barnett formula matters because something like half of all public expenditure in Scotland is funded by it. It is distributed on a population basis. However, as the noble Lords, Lord Forsyth and Lord Barnett, have said, if Scotland can distribute its own public finance downwards on a needs basis, as it does and as it should do, it can receive it on a needs basis, as it should but does not.

The House of Lords committee, this House and the other place in its January debate this year all said so, apart from HMT, whose coalition Minister said that the Government,

“do not plan to change the Barnett formula”.—[Official Report, Commons, 18/1/11; col. 206WH.]

Yet since our report was published two years ago, public finances have deteriorated and services have been cut while, as the noble Lord, Lord Forsyth, said, £4.5 billion of unmerited, inherited and unearned money is going to Scotland, allowing the SNP to provide additional services courtesy of the British and English taxpayer.

On the formula, if you assume that England represents £100 per head, Wales gets about £112 per head on population, and should get about £115 per head on needs; it is marginally underfunded. Northern Ireland is about right. Scotland should get about £105 per head but instead gets subsidised to the extent of £120 per head—or a subsidy worth about £1,600 a Scottish citizen or, as the noble Lord said, an overexpenditure of about £4.5 billion. No other public moneys are distributed solely by population in this reckless way. Local government, health and social security are all based on need, as they should be. This is not rocket science. It is not complicated. It is done in all other areas of local government policy. For example, in local government you look at needs, which may be the number of elderly receiving attendance allowance, children with special needs or whatever, and you relate that to resources and the capacity to meet those needs—the revenue support grant is often the difference between those two—so that, rightly, Winchester will get less than Wigan, even if their populations are broadly similar, as their needs and resources are different. That is fair.

I do not have much time in which to attempt further financial forensics, although that needs to be done. However, my second point is a moral point. Consider every teenager in Birmingham who is going to lose their education maintenance allowance; every young person in Cornwall who is discouraged from applying to university by virtue of the increased tuition fees; every large family in inner London who will face cuts in housing benefit and may lose their home; every frail pensioner in Norfolk struggling to meet increased care costs. That teenager, that would-be university student, that large family losing their home, that frail pensioner; they are all subsidising—effectively paying for—Scotland’s handouts of free tuition, free personal care and frozen council tax. I object. This House faces welfare reform bills with many of us pleading with the Government for £75 million here and £100 million there for some of the most vulnerable people in our community, yet £4.5 billion is going to Scotland on no other basis than that it always has done. Where is the Treasury’s much vaunted financial prudence? Where, indeed, is our collective moral compass? It is not fair. It is not right. It is not decent and it should end—gradually, slowly; I accept all that, but it should end.

My Lords, I congratulate the noble Lord, Lord Barnett, on his fame in Wales. In fact, he is almost a household name, but not perhaps for the reasons for which he would like to be known. The Barnett formula now has a sort of infamy as it is referred to as a formula in disrepute. The case is perfectly well made about a needs-based formula which would serve Wales much better.

The main problem with the formula is what is known as the Barnett squeeze. If any noble Lord can imagine being squeezed by the noble Lord, Lord Barnett, please carry that image in your mind, but the eventual ending of the Barnett formula—we are running towards it at a rate of knots—will result in every person in Wales being paid the same contribution from the public purse as anybody else in the United Kingdom. In other words, no matter where you are, you will be paid the same. The realisation is quite obvious; Wales is the part of the United Kingdom in greatest need. Two-thirds of the population of Wales are in a convergence zone of the European Union because their GDP level falls below 75 per cent of the average across the European Union. That has occurred not just once but twice and is likely, given current performance in Wales, to fall into that category for a third time, so Wales is in greater need than any other part of the United Kingdom as a whole. In fact, two local authorities in Wales compete in terms of their populations having the worst health of people in Britain. The money that is required to treat people well and appropriately across our country should be distributed according to need. The squeeze must be imposed over a period of time and we must move to a needs-based formula.

You could simply transfer the money from Scotland and give it to Wales but I am sure that that is not appropriate. That is probably why the previous Government always said that they were opposed to changing the Barnett formula. Alternatively, you could provide some new money to cushion the change which will take place over time. Timing is important because we now have devolution across many parts of the United Kingdom. We have asymmetric devolution, which means that powers have been handed over at different rates in different areas of public life in Northern Ireland, Scotland and Wales, but gradually the devolved regions are moving closer together in terms of the devolved powers that they have. Devolution involves being responsible for your finances as well. The Scotland Bill, which will come to this House very shortly, as has been said, looks at one side of that coin. It gives fiscal responsibility to Scotland. Undoubtedly, that will occur in Wales as well over the next few years. However, the other side of the coin is that in a United Kingdom it is important that we balance the needs of our country by offering the opportunity of a grant which is disbursed according to need around our country. It is just as important for Cornwall as it is for the north-east of England, Wales, parts of Northern Ireland and parts of Scotland. We need to address that need; it is two sides of the same coin.

Therefore, we will need that change over the coming years. It means that we will make a start on the process of moving towards a needs-based formula. It will take time. To get the financial accountability right, the Scotland Bill itself looks to 2018, and I hope that the Minister in his reply will tell us what steps can be taken now that will lead to the post-2015 change that the noble Lord, Lord Barnett, quite rightly talked about.

My Lords, the number of speakers in this short debate is surely evidence that this issue should be much higher on the political agenda. I thank the noble Lord, Lord Barnett, for this debate and for his long-standing recognition of the problems that have grown over the years.

I well remember debating in another place, in 1978, I think, the appropriateness of a formula that should be based on needs—in particular the need to help to bring up the level of GDP per head in Wales to the UK average, whereby we could stand on our own two feet. Since that time the GVA in Wales has fallen from 88 per cent of the UK average to 74 per cent. Wales has pressing economic and social needs, but the formula does not take these on board.

The problems are the assumptions that underpin the formula: first, that the base position of expenditure patterns in 1978 was a valid starting point; secondly, that the changes in spending levels in England represented a valid mechanism on which to base the changes in Wales, Scotland and Northern Ireland; and, thirdly, that circumstances in Wales had changed over the years in a way that reflected the changes in England, ignoring the massive changes in the basic industries, such as coal and steel, over that period. All three assumptions are faulty. Over 30 years those changes have compounded to undermine the validity of the formula. On top of this, as the noble Lord, Lord German, said, we suffer the effects of the so-called Barnett squeeze.

Successive studies have shown that the Barnett formula is underfunding Wales, as a number of speakers have generously recognised. A decade ago, papers were produced at Nuffield College showing the unfair nature of the problem. According to last year’s Holtham commission report, the extent of the problem is a shortfall of approximately £400 million a year for Wales. The Calman commission noted that the Barnett formula,

“is not well related to need”;

and the excellent report of the House of Lords Select Committee to which reference has been made—I thank noble Lords here for their contribution to that report—emphasised that the Barnett formula fails to take into account,

“the relative needs of the devolved administrations”.

The report recommended,

“A new system which allocates resources to the devolved administrations based on an explicit assessment of their relative needs”.

The response of the Labour Government was, frankly, flimsy, totally unpersuasive and showed contempt for the excellent work of the House of Lords committee. Labour refused to change the formula at all.

We need to get rid of the Barnett formula, which has been acknowledged by the noble Lord, Lord Barnett, as outdated, and urgently to replace it with a needs-based formula. The basic question is what the objective should be of any redistributive funding formula. Should it try to sustain broadly comparative levels of public services across these islands? Should it merely reflect the resources that can be raised within the territory of the devolved Administration? Or should it be a mixture of the needs and resources, as was for such a long time the basis of local government equalisation mechanisms?

Frankly, we have had enough of studies, commissions and investigations. What we need is action. In Wales, we need action very soon indeed. We need it urgently and we want it now.

My Lords, it is a particular pleasure to follow the noble Lords, Lord Wigley and Lord German, because, having had the honour to serve on the special Select Committee on the Barnett formula and having seen the outcome of our deliberations that were unanimously agreed, I feel particular sympathy for Wales and the circumstances that it faces in this battle. I will speak this evening on the Scottish front, but we are happy to join the noble Lords in that battle, because we think that the formula is unjust to Scotland also—not because it gives us too little money, but because it completely distorts the picture in Scotland when we have important matters to deal with.

I start with a word of sympathy to the noble Lord, Lord Barnett. Most former Ministers would be thrilled to have a formula named after them—one that may resonate through history. However, the misery on the face of the noble Lord is tragic to see. I have some good news for him. His formula actually worked. The squeeze—which as a former Chief Secretary, although he will not admit to it, he must have really wanted—did work. When I was Secretary of State for Scotland, I commissioned an annual report on government expenditure and revenue in Scotland that persists to this day. It was a kind of balance sheet. In the years 2000 to 2002, it showed that the Barnett squeeze had taken £17 million off the Scottish block. Unfortunately for the noble Lord, Lord Barnett, the special deals that we managed to negotiate with the Treasury at that time added £340 million to the Scottish block.

Barnett has been used as shorthand for the whole complex of public expenditure. In reality, of course, one of Barnett’s problems was that it did not deal with the underlying block, the baselines in each of the countries; it dealt only with the annual increase. Many of those baselines were historically justified. They were the products of battles fought and won in difficult circumstances in parts of the United Kingdom where there were particular problems. Indeed, this happened in England also, because there were parts of this country—there may still be parts of the north-east and north-west—where, for all I know, public expenditure per capita in a defined area is higher than in Scotland, Wales or possibly Northern Ireland.

Scotland’s worst single problem was the nationalisation of all its primary industries. That was a tragic socialist disaster that led to those industries being badly managed, starved of capital investment and riven with industrial disputes. However, that was way back in the 1950s, 1960s and 1970s. Scotland was transformed in the 1980s and 1990s and, as a result, with new investment, increased productivity and unemployment falling below the English level, the baseline Scottish block began to look particularly out of place.

The real problem, as the noble Lord, Lord Barnett, identified, is that no account has been taken of need. That is unforgivable. It was all done in an arbitrary way, with special pleading. Inevitably, when you have territorial departments, you will get special pleading from their Secretaries of State and Ministers. Inevitably, they will win some of those battles. That is now less easy with devolution, but it is another reason why devolution is a less than perfect solution to the world’s problems. It was always hard to define need; and when we sat in the Lords Select Committee looking at this matter, we tried to find an easy way to find an accessible, simple and identifiable way of defining need that would be universally acceptable across the whole United Kingdom. We believe that we succeeded, and that is why it is particularly hard that the Government ignored the findings and shelved our report, almost before the ink was dry.

Add to that the constitutional change that besets us—the slow landslide of devolution, and what is now following, that some of us predicted. The demand for realism is absolutely overwhelming. Contemplating major constitutional change through the Scotland Bill and other measures that are happening, without realism and accuracy over the funding of these parts of the United Kingdom, is simply unacceptable. It would be disastrous. Billions of pounds are at risk, and it is demeaning to Scotland, if it is unfair to England, to be in this position whereby it cannot honourably and decently calculate the true justification of its case or of other cases without the facts. We must have the facts before any further damage is done.

My Lords, I, too, welcome the initiative and success of the noble Lord, Lord Barnett, in achieving this debate. I mean no disrespect to him or anyone else when I say that I fear that events have overtaken not just the Select Committee and its report but the Calman commission and its report.

Frankly, block grants are wrong and the Barnett formula should not be revived on a needs basis, or on any other basis, and should be scrapped. Block grants mean that all the easy decisions about spending money and priorities are made by the Scottish Parliament, which does not make any of the difficult decisions about raising that money. That is why no one has suggested the use of the plus-or-minus three pence in the pound that Scotland already has. The Auditor-General in Scotland has already indicated that free higher education, free prescriptions and free personal care will not be sustainable in the near future without substantial additional income. They will be under threat. What will happen? Alex Salmond, like Oliver Twist, will say, “I want some more”. He is already doing it—asking for more in the block grant and more taxation powers. If he does not get them, who does he blame? He blames Westminster.

That is why I think that the time has now come when we must seriously consider a more radical change in funding devolved Governments. It is described by some as full fiscal autonomy; I would describe it more appropriately as full fiscal responsibility; so that the responsibility for raising money as well as spending it goes to the Scottish and other Governments. Of course, there has to be an agreed pre-eminence of the United Kingdom Government in defence, foreign affairs, welfare and other reserved areas.

It also means that we have to start moving on from our present asymmetrical devolution towards a fully federal system. I am astonished that the Liberal Democrats, who, traditionally, have espoused federalism, are so quiet. Apart from the centralised system, which we have abandoned, or the break-up of the United Kingdom, it is the only stable, justifiable system. We should all be getting together to argue for it. If we do not, if we do not move towards a fully federal system with each of the devolved parts—I am open to argument whether it should be England or regions of England; we have tried regions of England—raising their resources and putting money into the central United Kingdom Government, if we unionists do not become federalists, we will see the break-up of the United Kingdom, which would be a disaster for all of us.

My Lords, it is a great privilege and honour to speak in this historic Chamber for the first time. It is exactly 20 years since I gave my maiden speech in the other place, but I guess that I am unusual as, in the intervening period, almost all of my political career has been spent in another other place—the Scottish Parliament. It is very supportive and reassuring to see many of my friends and close colleagues from across political parties—the noble Lord, Lord Foulkes, being one of them—in the Chamber this evening. I agreed with much of what he had to say.

It has been a great experience for me to be back in these Houses of Parliament, with all the history and ceremony, although, obviously, I was slightly disappointed that, unlike in the other place, there was no pink ribbon under my coat peg on which to hang my sword. Most important of all has been, not the surroundings that we see here, but the people. I have had incredible help from so many noble Lords and so many people who support the working of this House, from the doorkeepers through to Lyon, Garter, Black Rod, the Clerk of the Parliaments and many more. Never did I think that I would be present for a phone call that began, “Lyon, this is Garter calling”, and far less that it would be about my future title in this place.

In the Scottish Parliament, never would a week go by without mention of the House of Lords, and two noble Lords in particular. There was the noble Lord, Lord Sewel, and the so-called Sewel Motion, and the noble Lord, Lord Barnett, and his Barnett formula. The noble Lord, Lord Barnett, will be pleased to hear—or perhaps not—that he has outlasted the noble Lord, Lord Sewel, as the term Sewel Motion has now gone, to be replaced by the term Legislative Consent Motion, which is very disappointingly dull.

The Barnett formula, in contrast, is never dull. At times, it has taken on totemic proportions in Scottish politics, often seen as a touchstone of a political party's commitment to Scotland and supported over the years by all of the main political parties and— somewhat ironically, because under them there would be no such formula—by the Scottish Nationalists. That includes my party. It is not my place to be controversial this evening, but I fully share the objective of the noble Lord, Lord Barnett, of avoiding the break-up of the UK. However, as the noble Lord, Lord Foulkes, pointed out, not all share their view. The events of 5 May this year now mean that Scotland's political future is once again centre stage.

In my view, it was unsustainable for the Scottish Parliament to continue simply to receive this cheque, this £30 billion payment, under the Barnett formula, with its only role being to decide how to spend that money. I am very pleased that there was cross-party co-operation here and in Scotland between the Liberal Democrats, the Labour Party and the Conservatives to create the Calman commission and to progress so speedily now to deliver on its recommendations through the Scotland Bill. Creating a stronger Scottish Parliament with new powers, including tax-raising powers, is a vital step. It is a crucial test of any Parliament that it should have real fiscal responsibility. If the Barnett formula has helped, as I believe it has, perhaps through its controversy, to make that change more possible, it will have played a vital role in Scotland's history. It opens up the possibility of further change.

It has been a great privilege to participate in the debate led by the noble Lord, Lord Barnett. I have a hunch that the fame of the noble Lord in Scotland and, indeed, across these isles, will live on for quite some time.

My Lords, it falls to me to congratulate my noble friend Lord Stephen on his excellent and constructive maiden speech. We will have to guess which parts we would have been denied had the two minutes not been extended. My noble friend has excellent experience across a range of governance. Firmly rooted in Aberdeenshire, his career in law and politics has prepared him well for this House. Ten years as a Grampian councillor, a Westminster by-election winner for Kincardine and Deeside, an MSP for 12 years for Aberdeen South, a Minister for education and transport in Scotland, leader of the Scottish Liberal Democrats and Deputy First Minister. “Aye, and he's looking so young”.

My noble friend has, to his national credit, the signing of the order abolishing tuition fees in Scotland and, vital for those who live in Clackmannanshire, his coming to Alloa to speak up for the return of the railway after 39 years to the Railway Bill Committee, which wisely chose to sit in Alloa for its scrutiny of the Sterling-Alloa-Kincardine Railway and Linked Improvements Bill.

The last time I congratulated a maiden speaker was two weeks before the end of the hereditary peerage in 1999. I hope that my noble friend's career will last substantially longer than that of the hereditary noble Lord whom I was congratulating then. Again, on behalf of the whole House, I hope that we will hear from my noble friend often.

I was also a member of the Select Committee. I am very happy with the conclusion of our report: that the Barnett formula should be urgently brought to an end on account of its current unfairness to all constituent parts of the United Kingdom. Proceeding to a needs assessment approach would contribute to the much-needed reform of governance in this United Kingdom.

The unfairness which the outdated, but easy-to-use, formula delivers is as follows. My native Scotland receives more than it is due—perhaps £1,600 per person—largely because of a slight decline in population. Wales and Northern Ireland entered the scheme at a lower than accurate level. Wales has more chronically sick and Northern Ireland has disproportionately more young people. The English regions are treated in widely differing and, frankly, mysterious ways. Resentment against Scotland is, surprisingly, still only smouldering. For the people of Scotland, it is bad to know that you are being subsidised, even if there may be a justification, in part, based on the UK Treasury raids on the oil and gas fields by the Crown Estate Commissioners and the siting of the nuclear deterrent at Faslane and Coulport.

I hope to hear my noble friend say that the Government fully intend to sort out that fiscal unhappiness by adopting our suggested scheme, the bones of which are that each devolved institution would receive a universal sum of so much per head, with premiums paid for certain groups: the very young, the very old and the chronically sick.

Therefore, I encourage my noble friend to commit the Government to ending the Barnett formula, but I believe that it will be important that all citizens in Scotland become aware of the inevitable reduction in the block grant, which will certainly be morally correct. This will be a major consideration for all citizens who are likely to take part in a referendum on Scotland’s future governance. The challenge for those wishing to continue with the parliamentary union is to demonstrate that there is a way to distribute UK resources more fairly, as would be achieved by a Scottish Treasury collecting and spending Scotland’s taxes. I look forward to my noble friend’s reply.

My Lords, it can truly be said of the noble Lord, Lord Barnett, that he is a great man. His name is, in government-speak, legendary. Having seen it operate from the inside, I do not know what the Department of Finance and Personnel in Belfast would do without the name Barnett. Everything is consequential now that we have Barnett consequentials, and these things are looked at with great interest and concern. However, there are a number of very serious issues here.

Ten years ago, the Northern Ireland Executive entered into negotiations with the Treasury and we started a process of establishing a needs basis. It was our initiative. Work started and, before the first Northern Ireland Executive came to an end, the Treasury produced some needs-based assessments for a limited number of departments. Those established, for example, that we did not have enough money for health but they also established that we got more money for industry than we should have needed at that time. That process was not pursued because the then Executive did not survive and there was an interregnum. Northern Ireland does not fear a needs-based assessment, although the Barnett formula has, by and large, been good to us. We have had the fastest-growing population in the UK and therefore that has been reflected in the formula, but we have also had substantial pockets of real need, and the statistics are there for all to see. With a younger population, there is clearly huge pressure on our education and health systems. We have had substantial inward migration in recent years, and that is also now putting great pressure on housing, jobs and other services. Of course, we also have legacy issues that go back over 40 years to the Troubles, and we are still trying to come to terms with those.

I believe that, whatever other faults it might have had, the formula of the noble Lord, Lord Barnett, at least found an efficient and effective way of distributing resources, which was one of the main problems. If it is proposed to move away from that, agreement will first have to be reached on how needs are assessed, because to some extent need is in the eye of the beholder. What I might consider to be a need, others might not. For example, we have industrial legacy issues, which we share with Wales and Scotland—in particular, the west of Scotland—where huge pockets of people suffer from asbestosis and other industrial-related injuries; we have climatic issues; and our pattern of population distribution is linear rather than grouped, which of course means that more money is required for services.

Because of the political and economic significance of this proposal, it is important that there is national consensus on how it is carried out. Otherwise people will feel a sense of injustice, which will have a political knock-on effect and will be used rigorously by those who want to smash up the union. That would be an economic disaster for any part of the country and we must not contribute to it. Therefore, consensus on the mechanism for assessing these matters will be a critical factor before we carry out this exercise. I urge noble Lords to bear that in mind when we come to take a decision on this issue.

My Lords, I feel a certain wry amusement in this debate because I agree with almost everything that has been said this evening. I last spoke on this subject on the Scotland Bill on 30 July 1998. On that occasion, I moved an amendment to suggest that the formula for distributing funds between the United Kingdom and Scotland should be based on the comparator of GDP per head, which is a pretty good comparator for needs. The late Lord Mackay of Ardbrecknish, in keeping with the philosophy of the times, quietly put me back in my box—I was a relatively new Member of this House—by saying that he did not like my formula because it was too mechanistic. It was mechanistic and I do not apologise for that, even today. If we had been able to work it out and apply it, it would have exposed everything that has been described tonight and brought it out into the open.

So here we are 13 years later discussing the same subject, and I could say, “About time too”. However, we now have to face a different problem. Whatever we do, it cannot be a unilateral decision by this country; there will have to be an element of negotiation with the devolved Assemblies and Parliaments, and I suspect that those negotiations will be very tense and difficult. In Scotland, another potential problem looms: the issue of whether there will be a referendum and a move towards independence there, in which case we will have a very much more difficult and very different type of negotiation.

I am speaking in this debate tonight partly to issue a word of caution—not to anyone in this Chamber or the Palace of Westminster but to the people of Scotland. My view, for what it is worth, is that, if they were to go down that road, they would be sacrificing a milch cow in Westminster for a very uncertain future in which they would assume that the oil and gas in what would become their section of the North Sea might provide an equal source of revenue. Looking at the long-term future, which we do not think about often enough, the fact is that we, together with the rest of the world, are going to have to move away from fossil fuels. They may be an asset at present but over time they are likely to become a diminishing asset. Therefore, the people of Scotland might run the risk of swapping what I would call a moderately safe and secure future for one that, in my view, holds the prospect of a steadily reducing income base for their country if that is the route they choose to follow.

I welcome this debate and pay tribute to the noble Lord, Lord Barnett. I bumped into him in the corridor the other day. That is why I am speaking tonight and I have enjoyed every minute of it.

My Lords, I have had a really pleasant surprise tonight. I came here expecting to see an ogre in the shape of the noble Lord, Lord Barnett—such, I am afraid, is his reputation in Wales—but he will be delighted to hear that after his discourse tonight I shall be going back and singing of his many virtues to the people of Wales.

Ever since I entered the political scene about 17 years ago, the need to reform the Barnett formula has been top of the political agenda in Wales. Sometimes I feel that it dominates the political agenda too much because it hampers our ability to talk about other issues where we need to increase our GDP and work on other methods in order to do so. None the less, I am afraid that the term “Barnett” has become synonymous with unfairness in Wales. It is something that we need to correct and the only way of doing so is to reform the formula. Of course, there is unanimous cross-party support within the Welsh Assembly for such reform. The current formula, as we have been told, rests on an allocation based solely on population. This year alone, £50 billion of public sector funding has been distributed to the devolved Administrations without even the most cursory attempt to see whether it is based on need or not.

The Assembly set up a panel, led by Gerry Holtham, which concluded that through the methodology that is currently used based on the English regions, Wales is being short-changed to the tune of about £300 million compared with its needs. The problem is that this situation will persist and will become worse if and when we see an increase in public expenditure. Something needs to happen. We need an intermediary step to ensure that we put a floor in the system, to ensure that things do not get any worse when that happens. I do not think any of us believe that this will happen any time soon. We need an immediate response and I would like to know whether the Minister has any plans to put that floor in place sooner rather than later.

I endorse the setting up of an independent commission. We need to ensure that there are representatives from all the devolved Administrations on that commission. I agree with my noble friend Lord Barnett that it does not need to impact negatively on the attempts at budget reduction. Indeed, a member of the Holtham commission, David Miles, made it clear that there is no reason to believe that replacing the Barnett formula with a needs-based system should be costly in aggregate for the UK Government. In fact, the reverse is true. Reform would be completely consistent with the UK Government’s focus on deficit reduction. The key point to remember tonight is how unjust the current system is. A civilised society should distribute on the basis of need and not on the basis of the number of the population.

I have a number of questions for the Minister. In the mean time, what is the current thinking on introducing a floor to the current Barnett system so that we have an intermediary step? Will the Minister commit to an open-minded dialogue, particularly with the Assembly, to progress the wider issue of Barnett reform? What is the timeframe for reform? We need to take account of much broader constitutional issues which are at play here.

My Lords, I am grateful to the noble Lord, Lord Barnett, for his continuing determination to bring an end to the distortions of the formula that bears his name. Years ago, it was understandable to introduce the formula, but ever since it has been right to want to get rid of it because it was always meant as a temporary solution to a specific problem.

Not long ago, I was interviewed by BBC Scotland and asked whether I approved of the Barnett formula, given my interest in it as the then leader of Newcastle City Council. I said I could be a strong supporter of it, just as long as the Scottish border was redrawn along the River Tyne.

I have a serious constitutional point as well as a serious financial point. First, the principle should be that public spending should reflect public policy which should then be financed on the basis of need, irrespective of nation or region. The Government's official measure of need includes such matters as age, housing conditions, health, crime levels, unemployment rates, travel costs, and scarcity of population. This is right. Needs assessments may not be perfect but they are better than just using proportionate population figures.

The public spending figures published by the ONS by nation and region in July last year show that planned public spending for 2009-10 was £8,559 per head of population in England; in Northern Ireland it was £10,662; in Wales it was £9,597; and in Scotland it was £10,083. In London it was £10,139, second only to Northern Ireland. In my own region, the north-east of England, it was £9,588, only the fifth highest. It is very hard for people in England to comprehend how this financial anomaly has been allowed to continue for so long when every English region has lower public spending per head than the four devolved Administrations and in some cases significantly higher needs.

That takes me to my constitution query. Why is it that all the devolved Administrations receive more from the Government than English regions? We must understand better the reasons for this, which is why I believe a UK funding commission should be established to assess relative need and a new method for distributing funds in the context of recent and pending legislation. We need fairness for all parts of our United Kingdom.

My Lords, I begin with my own words of congratulations and welcome to the noble Lord, Lord Stephen, and I hope that next time he addresses us he is able to do so at much greater length in a more leisurely debate. I also congratulate my noble friend Lord Barnett on his persistence in trying to abolish, in its present form, the formula that bears his name. I have very much agreed with his views over the years and I feel that his persistence should be rewarded with a new Barnett system that is based on needs and that, I hope, is agreed by all parts of the UK as a sensible way forward.

I would also like to express my general support for the conclusions of the report on the Barnett formula, which was the work of the committee chaired by my noble friend Lord Richard. I was taken by the comments of the noble Lord, Lord Forsyth, and my noble friend Lord Foulkes in talking about the new political situation and our need to keep that in mind as well as simply looking at the issue, as we have done over recent years.

I was very tempted to respond to the challenge laid down by my noble friend Lord Foulkes in talking about a federal system for the UK. However, he immediately hit on a particular problem in that suggestion, which is, given the size and the population of England, whether England would be treated as one unit or in devolved units. Despite the failure of the referendum in the north-east of England, I would be rather upset if we simply ended up with a very centralised English system within a devolved UK. I hope that that will not happen in future.

Like the noble Lord, Lord Shipley, I am very much influenced in my comments about the Barnett formula by my experience of belonging to the north-east of England. As he well knows, the formula and the way that it operates has been the subject of much public criticism in the north-east—in fact, it is almost as hot a political potato as it is in Wales. That criticism has also been supported by at times a very vigorous media campaign against the formula.

I certainly know from my own experience, having represented a north-east constituency in another place, that it was impossible to defend the formula to my constituents. I did attempt to do so once as a loyal Minister defending government policy and I very soon found that I was on a hiding to nothing. However, I will pay tribute to the way that, despite the operation of the formula, certainly under the previous Labour Government, many programmes of expenditure were directed to areas such as mine, and that has helped to redress the balance.

However, it remains true that over the years the less well-off regions in England, as well as Wales, have understandably felt disadvantaged by the formula. My noble friend Lady Hollis made the point to the committee that obviously there are more badly off people in populous, prosperous areas. Despite that, in any formula based on territories, a territory such as the north-east, which has a similar population to Wales and a slightly higher population than Northern Ireland, will compare its receipts to them, as it has compared its unemployment rates and general economic performance with Scotland, Wales and particularly Northern Ireland over the years.

We should learn from the international examples mentioned in the committee’s report. We should bear it in mind that although the systems are different to those of the UK, having a regular and automatic review of any funding system is important if you are to have a proper system based on needs. I hope that the Government will take that dimension into account in their future deliberations.

My Lords, I, too, thank the noble Lord, Lord Barnett, for raising this debate. I also congratulate the noble Lord, Lord Stephen, on his participation, and we all look forward to future contributions.

I am praising the noble Lord, Lord Barnett, not only for his enormous contribution to political life in this country, both in office and subsequently in your Lordships’ House, but also for the Barnett formula. Whether one likes it or not, it has a characteristic of having survived; it has a characteristic of having done what it initially set out to do—to stabilise expenditure and allow planning in Scotland and Wales; and it has a characteristic that it has allowed devolution to take place. It has some good points—the sorts of points that the previous Government made in reacting to the Select Committee’s report.

We speak as though the Select Committee report was an answer in itself. It was not. What it said is, “You want to get yourself a commission, then we have this thing called needs and we will write some words about it but the commission has got to fill in the gaps”—a non-trivial task. The committee made a case that there is concern about this formula in Scotland, Wales, England and, I suspect, Northern Ireland. However, one should also remember that any change will be enormously difficult to change again so it has to be got right.

What does getting it right mean? First, it has to be fair. The idea that the word fair is not political is absurd—it is actually a deeply political word—so it has to be both fair and it has to enjoy political consensus. If it does not, it will not sustain, and falling apart quickly would be much worse than where we are. The facts of life are that we are a long way from political consensus. As the noble Lord, Lord Foulkes, points out, perhaps we should consider something a great deal more radical. It has been pointed out by other noble Lords that we need agreement across parties, across the stakeholders, for this to work. We do not have that. The SNP simply failed to engage with the Select Committee—never mind disagreeing with it, it failed to engage. With its recent success in the polls we have to recognise it is a force and it has to be a force in anything that comes out of it.

We have had continuous change and we are going to see this change in the Scotland Bill. We all look forward to the debate on the Scotland Bill because a lot of these issues will come out and we will be better informed after that. There are clear concerns in Wales that mean that any solution has to be a solution for all parts of the United Kingdom, not just for Scotland.

It is perfectly proper that the Government should be concerned about the issues raised tonight and I hope that they will indicate that at some point they will look at how to address these. Equally, I do not urge them to move in haste on this issue. In far too many places in the latest legislative programme we have seen legislation in haste. We do not need it in this case. They have to take a careful, measured approach to secure agreement about fairness and consensus. So I am not going to urge them tonight to act in haste.

My Lords, I am most grateful for the opportunity this evening provided by the noble Lord, Lord Barnett, to debate his eponymous formula. It is an important subject that is of great interest to all parts of the United Kingdom. I thank all noble Lords who have participated. I listened carefully to what they said. I congratulate in particular my noble friend Lord Stephen on his maiden speech, and look forward to many more of the quality that he showed us this evening.

It might help if I explain briefly the background. Changes in the departmental expenditure limit block budgets of the devolved Administrations are determined by the Barnett formula. The calculation in outline is the change in provision of the respective United Kingdom departments in the spending review, multiplied by the relevant departmental comparability factor—which, for example, would be 100 per cent for health, as health is fully devolved—multiplied by the appropriate population proportion. The population figures are updated at the spending review to reflect latest ONS estimates of population, and the comparability percentage is also revisited.

The previous Government decided at the time of devolution in 1999 to retain the block and Barnett formula arrangements for determining the budgets of the devolved Administrations. This was the basis on which the devolution referendums were held. It is worth noting that responsibility for allocating spending in England to the English regions and local authorities lies with UK departments. They make these decisions once departmental settlements have been announced in the spending review. There is no single formula for allocating money within England.

Several reports have recently been published that examined the funding of the devolved Administrations. All were referred to by noble Lords this evening. The Calman commission on developing the Scottish devolution settlement, which was commissioned by the previous United Kingdom Government and the Scottish unionist parties, reported in June 2009 and covered funding to Scotland. The Holtham commission on Welsh funding, commissioned by the Welsh Assembly Government, published in the summer of last year its final report on the Barnett formula and on devolving taxation and borrowing in Wales. The House of Lords Select Committee on the Barnett Formula reported in July 2009.

On the subject of the Calman commission, the Scotland Office published a Command Paper in November 2010. It accepted the recommendations that there should be improved financial accountability, including more tax devolution—the noble Lord, Lord Foulkes, referred to this—and that as a consequence the Barnett-determined block should be reduced by the forecast amount of the 10p devolved income tax receipts. It also accepted taking forward the devolution of other taxes, including stamp duty and landfill tax, and introducing new borrowing powers for the Scottish Executive. Implementing the Command Paper will require legislation: a Scotland Bill has been published and is currently going through Parliament. I listened to the comments of my noble friend Lord Forsyth and of other noble Lords, and certainly I will pass them back to Her Majesty's Treasury. The noble Lord will have ample opportunity to make his points on the Bill as it passes through your Lordships' House.

Why did my noble friend leave out, in his list of conclusions from the Calman report, the acknowledgement that we would have to move to a needs-based system of funding?

I was going on to say that the House of Lords report recommended replacing the Barnett formula with a needs-based formula. I will deal later with needs-based issues. The previous Government welcomed the House of Lords report, as noble Lords said, although they remained opposed to replacing the Barnett formula. Following the Holtham and House of Lords reports, the coalition Government said in their programme for government that they recognised the concerns expressed about the system of devolved funding, but that the priority must be to reduce the budget deficit and therefore any decisions to change the current system must await the stabilisation of the public finances. In addition, the Government announced in the spending review that there will be consideration with the Welsh Government of the proposals in the final Holtham report, consistent with work being taken forward in Scotland following the Calman commission.

The Government welcome all views on the future of the Barnett formula. I will ensure that Her Majesty's Treasury is made aware of what has been said this evening. In the past, the formula proved to be a durable and robust method of calculating changes for the devolved Administrations. Even the House of Lords report concluded that the Barnett formula had qualities such as simplicity, stability and the absence of ring-fencing. However, we recognise the concerns that are often expressed about it, and were expressed this evening.

There is perhaps a perception, especially in English regions such as the north-east, that Scotland in particular is overprovided for. Comparisons tend to be made using figures published in public expenditure statistical analyses on identifiable total managed spending per head. My noble friend Lord Shipley mentioned some figures. Those for 2009-10 are £8,531 per head for England, £9,940 for Scotland, £9,709 for Wales and £10,564 for Northern Ireland. On a comparable basis, the north-east has the second highest spending per head in England at £9,433.

The perception in England that the devolved Administrations may be overfunded may be exacerbated because they can afford more generous policies; for example, on university fees and the free provision of services. The noble Lord, Lord Barnett, referred to this. I must emphasise that the devolved Administrations have not received any additional money to fund those policies. They have accommodated them within their existing budgets. One of the purposes of devolution is to allow the devolved Administrations to make these different policy choices. This was set out in 1997 in the previous Government’s statement of principles:

“The key to these arrangements is block budgets which the devolved Administrations ... will be free to deploy ... in response to local priorities”.

I am sure that the devolved Administrations themselves do not regard their spending review settlements as generous.

My noble friend Lord German and the noble Lord, Lord Wigley, were concerned about the Barnett squeeze convergence property of the Barnett formula, whereby the percentage increases in spending tend to be lower than in England. The Holtham commission in Wales, in particular, has called for a floor to be placed under the formula to prevent further convergence with England. The expression “Barnett squeeze” reflects that the Barnett formula provides the same absolute increase per head but a lower percentage increase because of the higher baseline levels of spending in Scotland, Wales and Northern Ireland inherited from the past. Of course, the percentage reductions will tend to be smaller than those for many UK departments when spending is cut, as it was in the last spending review. I will return to the subject of Wales in a moment.

Some have raised concerns about the transparency of the existing system. The House of Lords report itself concluded that the quality of data on public spending has improved since 1999. The Government have provided further information about the allocation of grant to the devolved Administrations, based on data which the Treasury provided to the committee and which was published in the committee’s report.

Several, if not all, noble Lords criticised the Barnett formula because it does not take sufficient account of needs. In a similar discussion in your Lordships' House in 2009, the noble Lord, Lord Davies of Oldham, said for the then Government,

“there is no doubt that the Barnett formula has stood the test of time from its development 20 or so years ago”.—[Official Report, 15/12/09; col. 1392.]

The Barnett formula has indeed provided a simple, stable and robust method for funding the devolved Administrations over the past 30 years. It is, of course, for the devolved Administrations to decide how to allocate their overall budget to individual programmes reflecting their own policies. The Barnett formula allows them the freedom to do this, without being second-guessed by the UK Government or any other body on their needs.

Nobody tonight has queried the propriety of a block grant that allows the devolved Administrations to determine how they allocate their expenditure within that block grant, nor was it raised during the debate that my noble friend Lord Davies answered. The criticism has been about the size of that block grant, which is based on out-of-date, inappropriate and deeply unfair estimates.

Yes, my Lords, but as the noble Lord, Lord Tunnicliffe, highlighted, there are complications in reaching a consensus on a needs-based formula. I understand that in the 1970s a formal interdepartmental needs assessment was carried out by the Treasury in consultation with interested departments. It was published in 1979. The study was extensive, involved a number of experts and a large team of people and took two years to complete yet, despite a great deal of time-consuming work, it was unable to reach an agreed conclusion about the basis for a needs-based assessment, and therefore it was not implemented. Indeed, the Barnett formula was introduced at around that time. There is, of course, no consensus across the UK on how to measure needs at the country level and, as in the 1970s, it would inevitably be a contentious and very time-consuming exercise. The noble Lord, Lord Empey, explained some of the problems. A needs-based system would be highly sensitive to the chosen weightings and indicators, on which there is no generally accepted methodology or consensus. The perception of needs and the understanding of the relevant factors may vary over time. Additionally, as policies change, so may the relative cost of implementing them in different countries. The picture may be very different in, for example, 2015. A number of changes are being progressed, such as the Scotland Bill, discussions on the Holtham report, and Northern Ireland consultation on corporation tax. I am sorry to disappoint noble Lords but the Government’s position remains that the priority is to reduce the budget deficit and that any decision to change the current system must await the stabilisation of the public finances.

The noble Lord, Lord Foulkes, raised the arguments in favour of fiscal autonomy. The union dates from 1707 and is one of the oldest and most successful in the world. It has a single currency, central bank, monetary policy and system of financial regulation, which fosters trade, monetary stability and economic growth. Non-devolved risks are pooled and financed centrally. Fiscal autonomy could mean further spending cuts in Scotland, Wales and Northern Ireland, assuming uniform levels of taxation. Also, as my noble friend Lord Dixon-Smith cautioned, it would not be prudent to rely on volatile and uncertain future North Sea oil receipts. However, we believe that financial accountability can be improved in Scotland through greater devolution of taxation, as proposed by the Calman commission.

I spoke earlier about Scotland and I said that I would return to Wales. I know that some consider Wales to be underfunded, which was raised by the noble Baroness, Lady Morgan, among others. In fact, spending per head in Wales is 12 per cent above England and, furthermore, spending has more than doubled in cash terms since devolution. Wales also benefits from very large EU structural fund spending, which amounted to £208 million in 2009-10 and is expected to rise to £233 million by 2014-15.

On Northern Ireland, the Government attach priority to improving the security situation, including by confirming the £800 million financial package which accompanied the devolution of policing and justice just before the general election last April. A further £200 million was announced earlier this year for policing in response to the security situation. In addition, the Government believe that it is important to rebalance the Northern Ireland economy from the public sector to the private sector. They published a consultation paper in March, which included examining possible mechanisms for varying corporation tax. No decisions have been made yet.

Some are concerned that insufficient attention is paid to the English regions. The Barnett formula is not used to allocate spending within England. The Government have chosen to prioritise the NHS, schools and early years, security and the capital investment that supports long-term economic growth for reasons of prosperity and fairness. This means tough settlements for some other areas but, because we have chosen to reform welfare, departmental budgets other than health and overseas aid will be cut by an average of 19 per cent over four years, which I emphasise is the same pace as planned by the previous Government.

There are also claims that the Treasury is judge and jury, and that the Barnett formula should be administered by an independent body. The noble Lord, Lord Barnett, and my noble friend Lord Forsyth raised that. It is the Treasury’s core function to control public spending. But the statement of funding policy sets out the dispute resolution procedure under which, if all other avenues have been exhausted, disputes may be remitted to the joint ministerial committee.

The Government have no plans to change the Barnett formula at present but we will continue to keep all aspects of public spending under review. The Government listen to all views and I thank all noble Lords for contributing to the debate today.

House adjourned at 9.09 pm.