Category Archives: Politics

How would a court treat a breach of the coalition agreement were it a binding contract?

Some Liberal Democrat spokespeople have over recent days come to favour the analogy of the coalition agreement as a contract between the Conservatives and Liberal Democrats, deeming the Conservative failure to support Lords reform as the first breach of the contract.

Which got me thinking: how would a court treat such a breach (if indeed it is a breach) if the agreement actually were a binding contract?

First off, the coalition agreement is not a binding contract (because the formalities needed to make a contract are not present) so a court would throw out the case on this basis. But let’s assume for now that it is.

The claim that the Lib Dems would bring against the Conservatives would be for breach of contract, so as you might expect the court would usually, after deciding that there is indeed a contract, go onto consider whether a party has breached it.

In many cases this is a fairly straightforward process: if you agree to buy 10 tomatoes but are only given 5 then the supplier has breached the contract and you are entitled to be compensated for that breach.

But in other cases things are not so straightforward, primarily because there is a disagreement between the parties about what exactly each of them was promising to do. It looks likely that this would be the case here.

In their defence to the claim, the Conservatives would be likely to say that in the clause on Lords reform they did not promise to ensure the legislation was passed. They only agreed to “bring forward proposals”.

The court has now got a different question to consider: what obligations does the clause that has alleged to have been breached actually impose on the parties.

In deciding what a clause in a contract means, the court will take an objective view. That is, they will consider what a reasonable person, having all the background knowledge of the parties, would take the clause to mean.

But there is another complication. The courts have long taken the stance that “background knowledge” does not include the pre-contractual negotiations of the parties. This is a decision taken by the courts for reasons of pragmatism: it provides a level of certainty to contracting parties that the agreement they have entered into actually does constitute the whole agreement, so the other party can’t, in the event of any minor breach, run off to court clutching a load of evidence that a different interpretation was intended before the contract was signed.

Unfortunately, then, we couldn’t have David Laws, Andrew Stunnell, Chris Huhne, Danny Alexander, George Osborne, William Hague, Oliver Letwin and Ed Llewellyn on the stand giving evidence of what was intended by this clause when they negotiated it.

However, there’s plenty of evidence to be considered. There’s the parties’ manifestos, the last three of which for the Conservatives at the very least spoke positively of democratic Lords reform and arguably committed them to it. There’s public statements: by the prime minister in the TV debates, by the Conservative’s former shadow home secretary chastising Labour for their woeful progress.

The “background knowledge”, then, is arguably this: unwavering Liberal Democrat support for Lords reform and a series of pretty unambiguous statements from Conservative documents and individuals expressing support for a democratic Lords over a long period of time.

Given this, would a court really be convinced that the clause on Lords reform in the coalition agreement wasn’t an intention to legislate? I’m not so sure.

And if the court decided that it was intended that legislation would be passed, the Tories would almost certainly have breached the contract.

But now the equally important question: what remedy would the Lib Dems seek?

The usual remedy for breach of contract is damages. The court would order a sum of money to be paid by the party in breach to, so far as possible, place the innocent party in the position they would have been had the contract not been breached but had been properly performed.

A fundamental breach of a contract – one that essentially renders it worthless – allows the innocent party to ‘repudiate’ the contract – ie treat themselves as discharged from any further obligations. This would clearly not be such a breach.

Money damages would clearly be a pretty inadequate remedy in this case, so the remedy I would be pushing for on behalf of the Lib Dems would be what is termed ‘specific performance’ of the contractual term. In other words the court would order that the Conservatives do what they promised to do in the contract and vote through Lords reform.

A failure to comply with such an order for specific performance would be held to be contempt of court and might see the Conservative rebels end up with a jail sentence.

And however attractive that solution might seem at times, I think we can all agree that it’s probably best that politics and contract law stay well and truly separate.

Six examples of Tory support for an elected House of Lords

The first three come from the last three Conservative general election manifestos – 2001,2005 and 2010:

Fourthly, here’s how the Lib Dem and Tory commitments to Lords reform combined in the coalition’s programme for government:

We will establish a committee to bring forward proposals for a wholly or mainly elected upper chamber on the basis of proportional representation. The committee will come forward with a draft motion by December 2010. It is likely that this will advocate single long terms of office. It is also likely that there will be a grandfathering system for current Peers.

Now, a few Tories have tried to weasel out of these commitments by saying they are too ambiguous to be regarded as clear support, so here’s David Davis – now a leading opponent of reform – attacking the then Labour government in wholly unambiguous terms for its woefully slow progress in delivering their 1997 promise to deliver an elected second chamber:

Are the Government planning to make the upper House democratic? Did I miss that aspect of the Queen’s Speech, or have the Government redefined, in some Orwellian fashion, what democracy means? If the Prime Minister does not stand by his commitments, the House and the people of Britain will be left with no other conclusion than that the Government’s reforms are simply a sham. They will be seen as nothing more than an attempt to bring to heel an upper House with principles and powers that have proved inconvenient to the Government, and nothing more than an attempt by the Prime Minister to stuff the upper Chamber with yes men who will do his bidding.

Finally, here’s the prime minister speaking just weeks before the 2010 general election in the leadership debates, where he couldn’t have been clearer in his support for a mainly or wholly elected chamber, and again criticising Labour for failing to deliver this:

What the strategic defence and security review said about joint strike fighters

The Guardian reports:

The Ministry of Defence is to abandon plans to buy the preferred fighter for the Royal Navy’s new aircraft carriers, in an embarrassing a U-turn for David Cameron.

The prime minister personally endorsed the decision to equip the over-budget carriers with “cats and traps” so they could catapult and recover a version of the F-35 joint strike fighter (JSF) from their decks.

But the cost of converting the carriers has already reached £2bn, and the JSF model Downing Street wanted has been beset by delays and technical problems.

Here’s what the strategic defence and security review said about the need to abandon Labour’s plan to buy the F-35B version of the joint strike fighter and switch instead to the more capable F-35C, and the consequent need to adapt the new aircraft carriers already ordered:

  • A single carrier needs to be fully effective. As currently designed, the Queen Elizabeth will not be fully interoperable with key allies, since their naval jets could not land on it. Pursuit of closer partnership is a core strategic principle for the Strategic Defence and Security Review because it is clear that the UK will in most circumstances act militarily as part of a wider coalition. This will delay the in-service date of the new carrier from 2016 to around 2020. But it will allow greater interoperability with US and French carriers and naval jets. It provides the basis for developing Maritime Task Groups in the future. This should both ensure continuous carrier-strike availability, and reduce the overall carrier protection requirements on the rest of the fleet, releasing ships for other naval tasks such as protection of key sea-lanes, or conducting counter- piracy and narcotics operations.
  • The strike needs to be made more capable. Installing the catapult and arrestor will allow the UK to acquire the carrier-variant of Joint Strike Fighter ready to deploy on the converted carrier instead of the short take-off and vertical landing (STOVL) variant. This version of the jet has a longer range and greater payload: this, not large numbers of aircraft, is the critical requirement for precision strike operations in the future. The UK plans to operate a single model of JSF, instead of different land and naval variants. Overall, the carrier-variant of the JSF will be cheaper, reducing through-life costs by around 25%.

It will be interesting to see what Philip Hammond, the defence secretary, has to say when he appears in the Commons later.

Liberal Democrats in government must u-turn quickly over snooping proposals

I’m very wary of rushing to judgements. I think it’s a good character trait to be considered; to think things through before expressing an opinion.

So yesterday, when we heard that the government was considering new proposals to retain yet more of people’s data, I hesitated before condemning. The selective briefing, I thought, was simply not enough information on which to come to a decision whether this was so terrible that I needed to condemn it.

Today, I find myself in a position to do so. The proposals are wrong. They represent a massive increase in the amount of data about our private lives that will be held by companies and accessible to various branches of government.

They tip the delicate balance between liberty and security far too far the wrong way. Not that that has not happened already.

One of the reasons I support this coalition is its strong commitment to civil liberties as expressed in the coalition agreement. I anticipated a decisive shift from Labour’s authoritarianism. And on many fronts the coalition has not disappointed: ID cards and control orders are gone, and the Freedom Bill is working its way through Parliament.

But if it presses ahead with these new snooping proposals all of that will be in vain.

If the coalition does not u-turn on this issue I will, for the first time, have to question whether I can continue to support this government and my party. I really, really, really do not want to have to do that. I really do not.

And on that I am not alone. Many pro-coalition Liberal Democrats are furious, and rightly so. For the Liberal Democrats this could be more serious than tuition fees or the health bill because on civil liberties the entire party can unite.

That Nick Clegg has already made statements supporting the change is extremely worrying. But it shouldn’t stop him reversing his position. That is far better than the alternative, which, frankly, I don’t even want to think about.

What does the Strategic Defence and Security Review say about the monitoring of communications?

In its response to the story in today’s news about the government’s plans to legislate to make it easier to monitor people’s communications, the Home Office said the following:

As set out in the Strategic Defence and Security Review we will legislate as soon as parliamentary time allows to ensure that the use of communications data is compatible with the government’s approach to civil liberties.

What, then, does the Review itself say? The following paragraph, on page 44 (pdf), seems to be the crucial one. It states that the government will:

The language is such that this paragraph could mean the government plans to legislate to do just about anything, which is perhaps why there has been little or no comment on this in the media until now. And presumably the reason we are now seeing media coverage is because of some tactical briefing by some interested party – be that the Home Office hoping to soften people up ahead of the Queen’s Speech or opponents hoping to drum up opposition before any proposal gets off the ground.

What is clear is that the detail around this policy is very much unclear, and I hope Liberal Democrat parliamentarians will be pressing the government to make clear its intentions so we can all respond to a concrete policy rather than mere speculation.

Phil Woolas: political consultant (no, really)

Phil Woolas  – remember him?

He was, of course, the Labour MP for Oldham East and Saddleworth between 1997 and 2010. In November 2010 he was unceremoniously kicked out of Parliament after being found guilty by an election court of telling serious untruths about the character of his Liberal Democrat opponent, in what were undoubtedly the most shocking election leaflets of modern times.

But now Woolas has returned to the political scene, only this time as a “consultant” at a new firm called Wellington Street Partners. It’s not exactly clear from the website what in the political world Phil Woolas will be providing advice on. Presumably not election law.

The website does, though, provide this very interesting biography of the former MP:

Phil Woolas was Labour MP for the marginal seat of Oldham East & Saddleworth for 13 years. He served as Parliamentary Private Secretary to Lord Gus MacDonald, Minister of State for Transport, Lord Commissioner of the Treasury, deputy leader of the House of Commons, Minister of State for Local Government and Regeneration, Minister of State for Civil Contingency, Minister of State for Environment and Minister of State for Immigration and Customs. He also served as Minister for the North West of England.

Phil was a leading member of the Tony Blair and Gordon Brown Governments.

Prior to his time in Parliament, Phil served as a national official for the GMB trade union. His early career was in television where he worked for ITV, Newsnight and Channel Four News. He has published numerous articles and essays and is a Fellow of the Royal Society of Arts.

I can’t quite put my finger on it just now, but I’m sure there’s something missing there…

The budget is an opportunity for boldness, but is Osborne ducking it?

Fiscal crises are actually a good time to take a strategic look at the tax system. While the books are being balanced, and some taxes increased to help do so, it makes sense to step back and think about where we want the burdens in the system to fall most heavily.

So this week’s budget was the coalition’s chance for boldness. Some think it does look set to be a radical budget, relatively speaking. But I can’t help thinking that – if the leaks provide an accurate picture – George Osborne might be ducking out and playing it safe.

Just think what this budget could have done. The Liberal Democrats were pushing for the immediate raising of the income tax personal allowance to £10,000. A few Tories agreed, but more wanted the 50p rate scrapped.

If Osborne had been being radical, he could have done both of these things immediately, paid for by taxes on expensive properties, further increases in taxes on capital gains and measures to crack down on the well-known specific instances of tax avoidance.

If he had done so, this week’s budget would have been a multi-billion pound shift in the tax system, both from taxing income to taxing wealth and, overall, shifting the burden further onto the wealthiest and off the poorest.

From media reports, it seems clear that the impediment to such boldness was actually the prime minister himself, who doesn’t like the idea of wealth taxes like a mansion tax, which actually George Osborne is quite open to.

So don’t let it be said that it’s the Liberal Democrats in the coalition who are impeding radicalism.

This budget does look set to do some fairly big things. But on taxation in particular, it looks like the coalition is failing to turn the fiscal crisis into an opportunity.