Clause 4 - Expenditure

European Union (Referendum) Bill – in a Public Bill Committee at on 11 September 2013.

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Question proposed, that the clause stand part of the Bill.

Photo of Emma Reynolds Emma Reynolds Shadow Minister (Foreign and Commonwealth Affairs) 8:55, 11 September 2013

It is a pleasure to serve under your chairmanship yet again, Mr Benton. You have done the hard yards in this Committee by chairing the first sitting. That seems like a long time ago now, but I want to put on the record my thanks for your patience and guidance.

Clause 4 is about the expenditure provisions for holding a referendum in the future. The Opposition do not seek to amend the clause at this stage. Although the Government have not yet calculated the exact sum of money a referendum is likely to cost, during the money resolution debate in the House the Minister for Europe quoted the sum of £75.3 million, which was the cost of the alternative vote system referendum.

We will return to the details of the Bill on Report. However, if the Bill were amended in the ways that we have sought to amend it in this Committee, it would have cost implications. For example, we discussed at length whether the franchise of the referendum should be extended to 16 and 17-year-olds. That would have a cost implication. We discussed whether the question should include another option. For example, in 1975, during the consultation on the White Paper, it was asked whether there should be an additional question, which would be “should the UK remain a member of the EEA?” It is open to colleagues to seek to amend the Bill on Report. I simply want to put on the record that if such amendments were made there would be cost implications because the counting of the vote would become much more complex.

We have discussed whether the franchise should be extended to Gibraltar. I am firmly of the opinion that Gibraltarians should have a say about whether Gibraltar and the UK remain a member of the European Union. However, again, there would be cost implications to including Gibraltar.

Finally, we discussed yesterday, in relation to an amendment tabled by the hon. Member for Cheltenham, how a referendum and an election could be combined. The hon. Gentleman used the alternative vote referendum as a guide to how that could happen. If the referendum were not held on the same day as a local, European or national election, the cost of the referendum would be much higher than the figure quoted by the Minister for Europe during the money resolution debate.

Before we return to this matter on the Floor of the House—I am not asking for an answer to this question today—it would be instructive if the Europe Minister would set out how much a referendum would cost if it did not coincide with another election. He gave us the  sum of money that the alternative vote referendum cost. However, that referendum coincided with the local elections that year, which reduced the cost. It would be helpful for colleagues on both sides of the House—and both sides of the argument—to have a clearer estimation of what the cost of a referendum will be if it does not coincide with another election.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

It is a pleasure to serve under your chairmanship once again, Mr Benton.

The hon. Member for Wolverhampton North East has made some telling points about the potential costs and the assumptions that are being made in the presentation of the Bill, as if the referendum would have a completely smooth passage, with everyone co-operating fully. Different scenarios need to be explored to establish whether we have taken on board all the cost implications of the possible referendum.

As the hon. Lady quite rightly pointed out, we have discussed some arrangements in Committee but that has not resulted in amendments to the Bill. If there were changes to the franchise, in particular a different electoral register for the referendum—if we decide to extend the vote to European Union citizens and to make special arrangements for Gibraltar and foreign citizens different from those for Westminster, European and local elections—there might be additional costs with the registration process, and costs to local government and returning officers to carry out the process. It will be interesting to hear the comments of the right hon. Member for Aylesbury on those points.

In particular, regarding Gibraltar, the right hon. Gentleman has clearly suggested that he is minded to look at arrangements that would allow the people of Gibraltar a vote on their own future in the European Union. We have had every indication, though no amendment, that that is a shared ambition among all parties. However, would the Government of Gibraltar be expected to defray the cost of the referendum, given that they had not requested it? That is an interesting discussion to be had. Is the right hon. Gentleman able to advise us on the likely cost of holding the referendum in Gibraltar if its Government are not willing to defray that cost? Has he had any discussions with the Government of Gibraltar on the referendum and its likely cost and timing?

I want to ask a further question in the same vein. Has the right hon. Gentleman had any discussions with the devolved and regional authorities in the United Kingdom about the cost of carrying out the referendum in their particular jurisdictions? Has he had discussions with the Welsh Assembly Government, the Mayor of London or the Administration in Northern Ireland about the possible cost of the question and the administration of the referendum in those areas?

In particular, has the right hon. Gentleman had discussions with the Scottish Government? We have explored various scenarios of what could be the uncomfortable interaction between the Scottish referendum and the proposed referendum. Let us imagine that, in 2014, Scotland votes for independence and enters a protracted period of negotiation with the United Kingdom, the EU, NATO and other international organisations—I do not know; I am not an expert in the matter, and perhaps other hon. Members are better informed. It is a  shame that the hon. Member for Glasgow North East, who is well informed on such issues, is not in his place today.

I am not aware of what the likely timing of the actual moment of independence will be if Scotland goes ahead and votes for it in 2014. It is quite conceivable that those protracted international negotiations would still be ongoing when the proposed referendum took place. That would be an interesting scenario. We would be voting on English, Welsh and Northern Irish membership of the European Union, but not on Scottish membership—that question, logically, ought to have a separate referendum. The Scottish Government might fully intend Scotland to be a member of the European Union regardless of how the rest of the United Kingdom voted. Should Scotland even vote in the referendum if it had already voted for independence from the United Kingdom? If so, would the Scottish Government be willing to defray the cost?

As I mentioned yesterday in a debate on my amendment, when we look at the administrative arrangements for taking the votes together, would we even have co-operation from the Scottish Government? Will the right hon. Member for Aylesbury expand on whether he has had discussions with the Scottish Government about such details and scenarios and their cost implications? If he has not, we have clearly not discussed all the potential cost implications, suggesting that, yet again, not all the i’s have been dotted and all the t’s crossed in the Bill, which was brought forward in a rushed and minimalist format, without pre-legislative scrutiny and without many of the details being thought through in the normal way for good and proper constitutional legislation.

Inevitably, therefore, much greater debate must take place in the later stages of the Bill. There must be more debate on Report and Third Reading and greater debate still in another place, where our noble friends are noted for their careful scrutiny and sometimes extended exploration of some of the detailed implications of legislation of this kind.

I look forward to hearing the answers, in particular about any discussions on cost that the right hon. Gentleman might have had with the devolved Administrations and the Government of Gibraltar.

Photo of David Lidington David Lidington The Minister for Europe

Let me comment briefly on the points made by the hon. Member for Wolverhampton North East and my hon. Friend the Member for Cheltenham. The figure of £75.3 million, which I gave during the debate on the money resolution, is not a Government one, but was produced by the Electoral Commission, reflecting the actual known cost of carrying out the AV referendum in 2012 on the same date as local government elections. That is an actual cost, which comes from the Electoral Commission and not from Government, so we can all, throughout the House, have confidence in the accuracy of the figures.

Photo of Emma Reynolds Emma Reynolds Shadow Minister (Foreign and Commonwealth Affairs)

Surely the referendum was in May 2011, not 2012.

Photo of David Lidington David Lidington The Minister for Europe

I apologise to the Committee; it must be something to do with the early start. The referendum seemed vivid and recent in my memory.

It is more difficult to give even an estimate for what a referendum would cost if it were held on a day when other elections, whether local or regional, were not taking place. We do not have a precedent for that since the 1975 referendum on staying in the European Union. Until the AV referendum, other referendums in the United Kingdom in the past 15 years have been mini-referendums, taking place in parts only of the United Kingdom, and not in the country as a whole. Clearly, there would be an increased cost and, if the Bill becomes law, we would need to do more detailed work on the estimates.

My central point is that the Bill is about the principle of giving the British people the final say. That is a political judgment and, frankly, the difference in expense between holding a referendum on the same date as local elections and holding one on a separate date, as a self-standing referendum, should not detract from the central decision that the Committee and the House are being asked to take: whether to endorse a Bill that gives the British people the final say.

The hon. Member for Wolverhampton North East and my hon. Friend the Member for Cheltenham both said that were the franchise for the proposed referendum to be different from the normal United Kingdom franchise, it would inevitably impose additional costs. I am no technical expert in such matters, but I suspect that the marginal cost of printing some thousands of additional ballot papers would be pretty insignificant in the big picture. What is right, however, is that if the process of registration had to capture data on people who were not normally included on the electoral roll, there would be an additional cost to some extent for electoral registration officers.

Photo of Jim Dowd Jim Dowd Labour, Lewisham West and Penge

The evidence is already there in a number of cases. I am thinking back to the most recent general election, when, for the first and so far only time, polling was on the same day as the borough council elections in London. If we are to remain on a fixed-term Parliament, that may subsequently happen every four or five terms. But of course there were people, principally EU citizens, who were eligible to vote in the borough council election but ineligible to vote in the general election. Having spoken to the returning officer in Lewisham about this, it caused some inconvenience, because of course the polling station staff were used to being given a name and then giving them both papers. I am sure that was replicated across the other 32 London boroughs. It caused some marginal difficulty for those EU citizens who wished to vote, but I do not think that the problems were either intractable or particularly inconvenient.

Photo of David Lidington David Lidington The Minister for Europe

The hon. Gentleman is right. There is an administrative challenge, but it is far from insuperable. While 2010 was the first occasion on which London borough elections took place on the same day as the general election, in some of the shire counties it was the first time for some years that a general election had taken place on a day which was not also the day of local government elections. It is not a new challenge or unique to London. The technical challenge is how electoral registration officers ensure that for a general election, or for a referendum fought on the general election franchise, there is a proper mark or designation  somewhere on the register to show those who are eligible to vote in European and in local elections, but not in elections conducted on the general election franchise.

I think there is a trickier technical issue when it comes to the proposal from some members of the Committee to include 16 and 17-year olds. We would of course have the data for 17-year olds, because when you fill in the annual return to your local electoral registration officer you are asked to include details of anyone in your household who is going to be 17 or over during the electoral year in question. To add in 16-year olds would mean a change to the form that is sent out to householders, except of course in Scotland. Under the arrangements for devolved elections which are the responsibility of the Scottish Parliament, information will already have been canvassed on 16-year old attainers. So there would be an additional burden there. I do not think that there would be a problem if the House were to decide to include Gibraltar on the electoral register, because Gibraltarians are of course already entitled to vote in European elections. Gibraltar votes along with south-west England as a region represented in the European Parliament, so the process for capturing that electoral data already exists.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

Does the figure of £75 million which the right hon. Gentleman quoted include Gibraltar voting, or does it not? He has just quite rightly explored various scenarios in which there would be an extra administrative burden if the franchise changed. Obviously that burden would fall in the first instance on returning officers, or in other words on local government. Does he imagine that central Government would fully meet the cost of any additional burden, or would that have to be met by local government? The right hon. Gentleman smiles and laughs at this suggestion. He may think that it is a minor point, but actually when we are making tough decisions about arts funding and central services at district council level, this is not a small question for local government.

Photo of David Lidington David Lidington The Minister for Europe

In fairness, I do not think that my hon. Friend can have it both ways. On the one hand, he is advocating the extension of the franchise to include 16-year olds, and now on the other hand he is saying that it will all cost too much. My hon. Friend really needs to be consistent about this.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

That is a complete misquotation. It was not at all what I was saying. I was not necessarily objecting to the cost; I was simply asking who would have to foot the bill.

Photo of David Lidington David Lidington The Minister for Europe 9:15, 11 September 2013

The additional expense ought to be relatively marginal, unless there had to be a separate canvass of electoral data in addition to the normal annual cycle. Otherwise, all that would be necessary would be for the annual circular to householders to ask for details of anybody who would be 16 or over, rather than 17 or over, in that household for the year in which the referendum on Europe was to be held. I do not think that need involve great public expense, either to local or central Government.

Photo of Jim Dowd Jim Dowd Labour, Lewisham West and Penge

On the second point made by the hon. Member for Cheltenham, it is not unknown for Governments of all kinds to will the ends without willing the means. Will the Minister give a simple undertaking that any expenditure involved in conducting the referendum incurred by local authorities’ returning officers will be covered by the Government?

Photo of David Lidington David Lidington The Minister for Europe

I am sure, as is always the case, that the Chancellor of the Exchequer, the Chief Secretary to the Treasury and the Secretary of State for Communities and Local Government will want to talk to returning officers closer to the time about all the practical arrangements, including the costs that might be involved in running a referendum. It would be premature for those discussions to start while the Bill is still in Committee in the House of Commons.

I was asked about the position regarding Scotland and other devolved areas. The United Kingdom’s membership of the European Union is a reserved matter under all three devolved settlements. Foreign affairs, including membership of international organisations, are expressly reserved to the Government of the United Kingdom, so that is a political decision for the UK Government and Parliament. We may then need to discuss the operations of a referendum where they start to come within the province of devolved Administrations. Again, that is something to be addressed if Parliament gives its consent to the Bill and we know that the referendum will go ahead.

I was also asked an interesting question by my hon. Friend the Member for Cheltenham about what would happen if Scotland were to vote in favour of independence but the subsequent negotiations about the future relationship of Scotland and the UK had not been completed by the time of a referendum on the EU, before the end of 2017. That was an ingenious question from my hon. Friend, piling a Pelion on Ossa of uncertainty and hypothesis.

I am going to take my stand with my right hon. Friend the Secretary of State for Scotland. He says repeatedly—I agree wholeheartedly, as I hope my hon. Friend might—that it is important that we do not, as the Government of the United Kingdom, engage in any kind of pre-negotiation about the terms or circumstances of the relationship of an independent Scotland, post 2014, with the remaining UK.

There is a very important reason for adopting that attitude. If the people of Scotland vote for independence, from the day that that decision is taken Ministers in the UK Government become advocates for the interests of the people of England, Wales and Northern Ireland. The Government and Parliament in Holyrood will become the advocates for the people of Scotland in those negotiations about the terms of Scotland’s withdrawal from the UK. However, up until that date it is the duty of the United Kingdom Government to speak and act on behalf of and in the interests of the people of Scotland as much as of any other part of the United Kingdom. That is why we are not engaged in any type of pre-negotiation.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

That was a rather convoluted but ultimately clear answer that no, the Minister has not had any discussions with the Scottish Government about  the potential scenario in which Scotland ends up voting in a referendum on the future of England, Wales and Northern Ireland in the European Union despite the fact that it has already voted for independence and has no interest in the matter, and it might well be expecting English taxpayers to foot the bill for the referendum taking place in Scotland. That, at least, was clear enough.

I would like to press the Minister on the other question I asked: has he had any discussions with the Government of Gibraltar about the cost or process of the referendum taking place there?

Photo of David Lidington David Lidington The Minister for Europe

I am in the process of consulting the Government of Gibraltar about the proposal that they should be included in the electorate in a referendum on Britain’s place in the European Union. It would obviously be open for the Government of Gibraltar to comment on technical matters as well as on the principle.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5 ordered to stand part of the Bill.