Financial Markets: Stability

Baroness Kramer Excerpts

Thursday 3rd November 2022 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I join in welcoming the Minister to her role and thank all noble Lords who have spoken. It has been a quite exceptional debate, both for its quality and new ideas and the wide range of contributions. But while we have been standing here, the Bank of England has raised interest rates by 0.75 of a point to 3%. That is the biggest hike since 1989 and it is forecast that the UK is facing a “very challenging” two-year recession, which would be the longest on record.

I say to the Minster, since she is here, that this calls for the Chancellor to come to Parliament and to speak more generally to the nation. So many people will now be desperately worried about what will happen to them. Several speakers today—I am thinking of the noble Lords, Lord Young, Lord Best and Lord Campbell-Savours—focused on housing, both on mortgage costs and the immediate impact on the rental market. That will feed through to people long before we get to the Autumn Statement on 17 November. Will the Minister ask the Chancellor to reassure the nation before then, rather than leave people twisting, quite frankly, with overwhelming concerns? All three of those speakers talked about longer-term reforms. Those things matter, both for housebuilding and for the rental sector, but we have an immediate crisis, and that is what I ask the Minister to focus on and deal with immediately.

After the events of the past weeks, I hope we no longer have to deal with discussions that question the need for financial stability. It is a prerequisite for a functional economy, and fiscal responsibility clearly underpins that stability. I have been listening for years to people who have claimed that we can print money, borrow, cut taxes and spend, with almost no limit. I pick up the phrase of the noble Lord, Lord Kestenbaum, who said that one day the music will stop. We have to take proper responsibility.

We also need to recognise that we are not the US economy with the almighty dollar and a domestic market of 350 million people. We are not in the EU with a domestic market of 450 million and 27 countries at our back. We are a medium-sized European economy, adrift since Brexit from any significant trading bloc and with a currency that is no longer a globally used trading vehicle. We have made our economy significantly more vulnerable. I pick up the point made by the noble Lord, Lord Desai—that the UK is an inherently fragile economy and we have to recognise that in the decisions and actions we take.

I also hope—I really disagree with the noble Lord, Lord Bilimoria, here—that we have heard the last from those who claimed that very low corporate taxes, reducing taxes on the richest, slashing regulation and cutting public services are the answer that will hand us growth.

[Lord Bilimoria (CB)]

I did not say cutting public services.

[Baroness Kramer (LD)]

I misunderstood; I thought the noble Lord was advocating cuts in public services to balance the books.

[Lord Bilimoria (CB)]

I said efficiencies.

[Baroness Kramer (LD)]

I would like to deal with that issue of efficiencies and cuts. After so many years of cutting out the fat and getting to the bone and flesh, the word efficiency is used extremely casually. Very often, it is expensive to make the change that underpins efficiency, so I will be looking to see if the noble Lord, Lord Bilimoria, speaks out against cuts in the real financing of public services.

We have been through this low-tax strategy and, frankly, it is an ideology that has been proven to be wrong. It may have suited or looked sensible when first implemented, but we have seen consistently over a long period that it does not deliver growth in the UK economy. I shall be fascinated to hear speeches from the Conservative Benches after the Autumn Statement. I am sure there will be lots of support for whatever the new orthodoxy is, and I look forward to seeing how Members opposite align that with the enthusiastic speeches in favour of the mini-Budget.

Businesses are now trying very hard to get the Government to hold back from their other false growth claim, which is slashing regulation. I noted that even the noble Lord, Lord Wolfson, said in this House that business is not looking to cut or change existing regulation. Last week I was at Mansion House to hear the Lord Mayor of London trying to impress on the Government and regulators that the City and financial services depend on the accreditation and confidence that regulation provides. If ever we needed to understand that regulation, having standards and getting it right are important, it is in light of the crisis triggered by LDI.

Numerous speakers picked up that point, including my noble friends Lady Bowles and Lord Sharkey, the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Sikka, as well as the noble Lord, Lord Davies, who looked specifically at the need to reform the way we think about and structure pensions. These are not deregulatory actions; they will often incur different, but firm, regulation. Regulation is a mechanism for enforcing standards, and the casual notice that a deregulation agenda somehow leads to growth is something most of industry is pleading with the Government not to adopt.

In the end, it is ordinary people and small businesses that pay the price of decisions that fly in the face of the real world and the experience we have been through. The noble Lord, Lord Kestenbaum, made the point that market instability hits many ordinary people. I will not repeat the many conversations that have taken place today on the impact of the rising cost of living, mortgages and rents; that has been very well laid out. The noble Lord, Lord Liddle, made the point that we cannot ignore poverty, the right reverend Prelate the Bishop of St Albans talked about the problems of in-work poverty, and all the conversations about rental reform very much feed into these concerns. I have simply no idea how most families manage when the cost of the very basics for living are up by 17%.

The Government are going to have to confront the impact of declining real wages. You cannot clap nurses one week and push them to food banks the next. I disagree again with the noble Lord, Lord Bilimoria, that uncapping bonuses is just a timing issue. You cannot say that one group of people cannot work effectively unless they have uncapped bonuses, then look at nurses and say that they can work effectively even with declining real wages. That bonus system, together with light-touch regulation, played a huge role in driving the 2007-08 crash that still scars us today. There is an old saying: fool me once, shame on you; fool me twice, shame on me. We have to be very careful about how we handle the financial services industry, for which I have great respect but where the wash of money tempts people to find a workaround in so many different ways. Indeed, LDI is a very good example of the industry trying to find a workaround.

We wait to see the Autumn Statement on 17 November. I think everyone here is very well aware that Shell announced last week not just quarterly global profits of $9.5 billion, over twice those for the same period last year, but that it also paid no windfall taxes. BP had almost the same earnings and paid a tiny bit of windfall tax. The House might be interested to know that the oil and gas sector has in just this quarter paid out $29 billion to shareholders. This, if anything, demonstrates that this tax has been very badly structured. I understand the Chancellor wanted to put in many thoughtful loopholes, but they desperately need to be removed and this must become a meaningful tax. To pick up on points made largely by the noble Lord, Lord Liddle, one of the things we need to think through is a shift from taxing earned income so heavily to looking at unearned income.

I agree with the noble Lord, Lord Bilimoria, that small businesses are under terrible pressure, and that needs to lead to reform of business rates and various schemes that will let them manage the debt they are carrying, many for the first time. Of course, I also join with others in calling for the uprating of benefits in line with inflation and protection for the triple lock.

There are many things that I do not forgive this Government for, because for years they have ignored the fundamentals of growth in the economy. That may be a point for a different debate—I would love the opportunity to develop it. The Chancellor faces hard choices. The Conservative Party has over the last decade brought those choices on itself, but the unfortunate part is that it has also brought them on the country.

UK Green Taxonomy

Baroness Kramer Excerpts

Thursday 3rd November 2022 Lords Chamber

[Baroness Penn (Con)]

I agree that the green taxonomy is an essential part of being a leader in green finance. The UK has led the way: we were the first country to lay regulations to make reporting mandatory under the TCFD framework and firms listed on the London Stock Exchange have the highest sustainability disclosure rate of any global financial centre. But, if we want to continue that leadership, we need to continue to make progress. We have laid out a number of future steps under our road map. I accept that some have been delayed, and it is for us to continue to work to make better progress, to ensure that we continue to lead in this area.

[Baroness Kramer (LD)]

Last night in this House, the Lord Mayor of London underscored that retaining our leadership position on green finance is essential to retaining a leading role in financial services far more broadly. Understanding the pressures generated by that, could the Minister please tell us when we will get the green finance strategy? Given all the government changes, could she publicly recommit to the earlier commitments to become the first net zero-aligned financial centre, as described by the noble Baroness, Lady Hayman?

[Baroness Penn (Con)]

My Lords, that commitment has not changed. On the importance of retaining our leadership position on green finance for London as a financial centre, I completely agree with the noble Baroness: that is why we have been so ambitious in this area. We have taken a number of steps to ensure that we lead the way, and we work with our international partners to bring them along with us. When we chaired the G7 last year, we got commitments on sustainability disclosure requirements, for example, from all the G7 Finance Ministers. So we are not just leading the way; we are also trying to bring other countries with us.

Defined Benefit Pension Funds

Baroness Kramer Excerpts

Tuesday 1st November 2022 Lords Chamber

[Baroness Penn (Con)]

I thank the noble Lord, and all noble Lords for their welcome back, but I have to disagree with the noble Lord’s interpretation of the provisions in the forthcoming financial services Bill. Financial stability will remain at the core of our system, but I do not think it is wrong to also recognise the importance of competitiveness in that system.

[Baroness Kramer (LD)]

My Lords, the Minister, whom I welcome, said that the Government had handed off to a committee of the House of Commons the responsibility for looking at whether reform of the Pensions Regulator was required. Surely, the Government should be looking at whether reform is required because, very clearly, we have a regulator that neither recognised the embedded risk of strategies that it was allowing pension funds to pursue, nor understood the broader implications. This suggests that change is urgent.

[Baroness Penn (Con)]

If that was the impression the noble Baroness had of my Answer, it was not the one I meant to leave with noble Lords. The regulators, including the Financial Policy Committee, the Pensions Regulator and others, will want to look at and reflect on the lessons that can be learned from the events of recent weeks. In pointing to the Commons committee’s work, I merely sought to address the noble Lord’s point about a different or more independent set of eyes also looking at this.

Premium Bonds

Baroness Kramer Excerpts

Thursday 23rd March 2017 Lords Chamber

[Baroness Neville-Rolfe]

I think we can agree on the excitement, but there is also a more serious point underlying this. When you are choosing how to save, you need to look at a number of options, which we have debated here in this House, including having a pension through the auto-enrolment system and taking advantage of other savings products such as ISAs and so on. I see premium bonds as a very important part of the savings market. And I am so glad that the noble Lord likes to have a flutter.

[Baroness Kramer (LD)]

My Lords, I exclude my noble friend Lord Lee from this but many people who purchase premium bonds also have an adverse amount of credit card debt or personal loans outstanding. They are attracted rather to the prize element of the premium bond. Would it be sensible to have on the website some advice to encourage people to think first about paying down their debts before they go for a low-interest savings product?

[Baroness Neville-Rolfe]

As I said, it is important that people have choice and look at a sensible way of saving. Having material on different websites is important but, in the round, we try to make sure that government advice gives people a sound sense of direction on savings, including what is good value for money. Again, I emphasise the point about pensions: investing in a pension is a very good form of saving.

Budget: Saving for Retirement

Baroness Kramer Excerpts

Thursday 16th March 2017 Lords Chamber

[Baroness Neville-Rolfe]

As we have discussed before, living standards have been rising. Yesterday, it was announced that we had a record number in employment and a 40-year low in unemployment. Getting people into work makes a huge difference. We made a series of proposals in relation to both pensions—this step change with auto-enrolment—and savings products that help people to save. The most important thing is to have a plan to restore our finances—we inherited a considerable mess—for everyone in this country, and for our children and our children’s children.

[Baroness Kramer (LD)]

My Lords, most people, in their busy lives, just want a savings scheme that is trustworthy, has a reasonable rate of return and does not eat a large amount of their savings through fees. Instead, the Government—and previous Governments—constantly come back with competition, incredibly complex rival products and switching. Will the Government finally identify someone—I would almost say anyone—whether a government Minister or regulator, to make sure that a workable product that meets most people’s needs is actually delivered, rather than this endless tinkering, which only a sophisticated financial adviser can possibly unravel?

[Baroness Neville-Rolfe]

I certainly do not take such a gloomy view of the products. The NS&I investment bond, which we started on, gives a rate of 2.2% for three years. That is significantly higher than the market average of 1.38%. Savers know that they can trust products offered by NS&I. Obviously, rates of return on savings products have come down and that has to be reflected, but the £7 billion of additional government financing will be at a cost of £295 million compared to borrowing through gilts.

Budget Statement

Baroness Kramer Excerpts

Tuesday 14th March 2017 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I have had some moments of sympathy with the Chancellor as he has been variously described as decent and tidy minded—“realistic” was more complimentary. The debate this afternoon has been anything but dull. The House has been absolutely at its best across a wide range of issues on the economy. The terrible twins, as the noble Lords, Lord Skidelsky and Lord Desai, have now been named, have tackled some of the macroeconomic issues and the deficit issues. The noble Lord, Lord Haskel, focused on technical training and productivity. The noble Lord, Lord Palumbo, called for brave decisions, while the noble Lords, Lord Willetts and Lord Monks, talked about inter-generational fairness. I think that all of us on these Benches would like to see the noble Lord, Lord Porter, in the Treasury because he explicitly described our policy on council housing. The noble Lord, Lord Marlesford, called for an increase in road fuel duty, and I assume that by now he is being burned in effigy by the Road Haulage Association, perhaps supported by the noble Lord, Lord Porter. It has been a brave and fascinating gathering, and I am going to spend time reading many of the speeches, because there was so much content in them.

This has been the last spring Budget but in many ways we can look at it as the first Brexit Budget. We have seen a Chancellor with almost no room to manoeuvre, Brexit being added to the situation he faced with borrowing. Also, on the core economy, the Chancellor will be very well aware that in 2016, four-fifths of the growth came from consumer spending, as so many in this House have said, supported by eating into savings or, more significantly, by going into further debt. Consumer borrowing is now at levels we have not seen since 2008. It is entirely unsustainable, especially given the inflation that will surely follow from the 17% devaluation in sterling. The noble Lords, Lord Beecham, Lord Bhattacharyya, and Lord Gadhia, my noble friend Lord Wrigglesworth and many others focused on those issues. Others looked at the business context. Although the Chancellor did not call this the Brexit Budget, in today’s debate almost half the speakers focused on the impact of leaving the single market and the customs union—hard Brexit—and the consequences for our economy, with bad news for jobs, living standards and opportunities. All that is well reflected in the OBR figures.

I think it was the noble Lord, Lord Higgins, who said that the Chancellor did not outline the challenges, which is true. I am sure that the OBR has come up with many more scenarios than the one that ended up in our Printed Paper Office; they would have given us a far better feel for the range of options we face and the things we have to take into consideration as we try to define how to manage the economy over the coming years. I wish we had an opportunity to see those additional scenarios.

Many noble Lords have spoken tonight of the pressure on public services and focused on the NHS and social care, which are in a state of near crisis. The noble Lord, Lord Porter, said that £2 billion to support social care was really welcome. That amount in one year would have been really good, but over three years it does not meet the problem. We are going to have to bite the bullet. I am not going to get into the internal Conservative Party wranglings over the increase in national insurance contributions for the self-employed, except to say that this has not been much of a Budget for business—I will comment on that in a moment. To the noble Lord, Lord Willetts, I say that there might have been a far better reaction had the Government broken their pledge in a way that put additional levies on companies that deliberately push employees out into self-employment as a tax arbitrage, rather than focusing on people who are themselves self-employed and face the risk of unreliable income, among other challenges and burdens.

In the autumn, I called for an emergency £4 billion injection this year—half for social care and half for the NHS—to deal with this crisis. I am beginning to think that the Chancellor might wish he had heeded that call. I agree completely with the right reverend Prelate the Bishop of Chester: we have to look at a completely different way of structuring and funding the NHS and social care. Similar issues were raised by the noble Baroness, Lady Altmann, and the noble Lord, Lord Desai. They will be glad to know that Norman Lamb, my colleague in another place, has constructed an independent commission, which is well ahead in its work. It is made up of leading figures in the relevant fields of expertise and is looking at that exact issue. We will have something very significant to say on how this fundamental issue can be dealt with going forward. Other noble Lords have pointed out that the National Health Service and social care are far from the only public services that are feeling this wide range of pressures. My noble friends Lord Shipley and Lady Burt and the noble Lord, Lord Beecham, discussed many of those issues.

This has not been much of a business Budget. The noble Viscount, Lord Chandos, was the last to speak on this issue and I join with him and other noble Lords who say that the cuts in corporation tax and inheritance tax are completely inappropriate in the circumstances that we face. Cuts in corporation tax below 20%—some would say 22% was a better number—have absolutely no impact on changing the minds of companies on where they invest and what they do. If it does not have that factor, the argument for cutting makes no sense. Large businesses will have seen a benefit from those corporation tax cuts but, as we see in this Budget, it is small businesses that have been getting it in the neck. For the self-employed this is through NICs, or the changes in business rates. The transitional payments are only for one year: a small relief but nothing like sufficient. Danny Alexander, as Economic Secretary to the Treasury, put in place a review of the whole business rates system, addressing the issue of online retailers who use out-of-town premises. It makes me absolutely furious that after the last general election, when the Conservatives came into government alone, the review was gutted. Had it gone ahead, we could now make changes and small businesses would never have faced the problems they face today. I forget which noble Lord raised the issue of quarterly digital returns but I agree completely—they should be entirely voluntary for small businesses.

In conclusion, this has been a limited, low-risk, fairly minimalist Budget because the Chancellor has been painted, and has painted himself, into a corner, and that is not a particularly healthy situation to be in.

Living Standards: Inequality

Baroness Kramer Excerpts

Tuesday 7th March 2017 Lords Chamber

[Baroness Neville-Rolfe]

I think the ONS keeps us honest; it looks at these figures over time and very helpfully updates us. The OBR forecasts are also updated all the time so that we can see what is happening. I come back to the point that the Resolution Foundation is looking at a forecast, but if we look at what has happened, five years ago it was predicted by the IFS, I think, that there would be a rise in inequality. In fact, that has not happened. Actually, things have continued to progress and we have seen a recovery. That is what we need to continue by having the right policies, which this Government are pursuing under our new Prime Minister.

[Baroness Kramer (LD)]

My Lords, I am shocked that the Minister does not recognise that young working families are facing serious financial pressure and are struggling, and that it looks as though it is going to be worse with inflation. Does she agree that part of the reason is the very high rents that most of these families face? Will she be willing, in the Budget tomorrow, to permit local councils to go out and borrow the necessary amounts of money to drive forward development of affordable rental housing? She has often acknowledged that the housing market is broken but all the Government’s solutions are on the demand side, and supply does not increase, especially not in the affordable area.

[Baroness Neville-Rolfe]

I would not want to steal the Chancellor’s thunder today. There is certainly some provision for prudential borrowing by local councils, but I come back to the support that we give to working families. The national living wage has already been mentioned by my noble friend. That has provided the fastest pay rise in 20 years. We have raised the personal allowance to £12,500 by the end of this Parliament; nobody had done that before. We are introducing universal credit, which has the benefit of making work pay, so that if you go out and work you are not held back by benefit dilemmas. We are committed to making work pay, and we believe that that is the very best way forward for the people of this country and for hard-working families, which I agree are a priority.

Tax Avoidance

Baroness Kramer Excerpts

Wednesday 18th January 2017 Lords Chamber

[Baroness Neville-Rolfe]

I am always very interested to hear from my noble friend on such issues. This is a complex point which, as a new Treasury Minister, I look forward to talking to him about to understand the implications in this important area of evasion and avoidance. Since the coalition, there has been a lot of agreement on the need to move forward sensibly, whether by statute or the intervention of the courts.

[Baroness Kramer (LD)]

My Lords, many of us have been very confused as to why the Government put so little effort into persuading the UK’s overseas territories and Crown dependencies to lift the secrecy that covers tax avoidance. Are we now finding that the answer, as the Chancellor expressed to the German Government, is that he sees a tax haven as a potential economic model, even if by default, for the UK economy—in contravention, I suggest, with long-held British values and the basis of our economy?

[Baroness Neville-Rolfe]

I think I have already made clear the context of the Chancellor’s remarks. We are seeking to get a good agreed deal, but clearly, you cannot forecast that. The CDOTs have now all signed up to the common reporting standard and started exchange of information in September last year. This is a result of the sort of international discussion and agreement that we need on these abuse issues, where I believe this country has led the way and, if I might say so, the coalition did some ground-breaking work.

Economic Forecasts

Baroness Kramer Excerpts

Tuesday 17th January 2017 Lords Chamber

[Baroness Neville-Rolfe]

I very much agree with my noble friend that we always need to look at the opportunities. As I have often said, I am glass half full, not glass half empty. Like the Prime Minister, I am determined that we should pursue a good Brexit and a bold and ambitious free trade agreement with the European Union, if I may pick up the comments that were made in relation to Mr Ricardo.

[Baroness Kramer (LD)]

My Lords, does the Minister understand some of the concerns at the kind of complacency that we have just heard expressed about a 20% devaluation of sterling, far higher than any recommended devaluation; soaring consumer debt, not quite yet at the crisis levels of 2008 but only a margin below; and inflation creeping into the system? I am sure that poor people will be glad to know that the noble Lord, Lord Lawson, celebrates the higher prices that they will be paying. Those have been recipes in the past for economic crisis. Should not the Government take more notice of what are not straws in the wind but major signals of problems ahead?

[Baroness Neville-Rolfe]

We have a system of carefully looking with the help of the independent OBR twice a year at where things are going and making the adjustments that we need. Indeed, I agree with the noble Baroness that there are long-term problems, and I am surprised that no one has mentioned the fiscal sustainability report that was published today—an independent and objective assessment, which looks ahead to the long term and will be an important catalyst for discussing some of the challenges we have in relation to the economy and how we fund the public services appropriately.

Finance Bill

Baroness Kramer Excerpts

Tuesday 13th September 2016 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I feel rather sorry for the Bill. In the number of fascinating speeches that we have heard, the only noble Lord who focused on the Bill to any significant extent was the noble Lord, Lord Turnbull. His description of the complexities of the taxation system—added to rather than diminished by the Bill—left us with our jaws dropping and terror in our eyes. But that has been almost the extent of the discussion of the Finance Bill.

I was in Alaska over the summer. There, when a mother bear is with her cubs, if a potential new papa bear comes along he slaughters the cubs. I rather think that we are in that situation now, with the Bill set for the slaughterhouse and unlikely to survive Brexit, the new Prime Minister and the new Chancellor.

Most noble Lords who spoke today covered broad issues, mainly Brexit-driven but with a very broad scope and range. I will extract two things from the speeches. The noble Lord, Lord Kerr, laid out the timetable according to which detachment from the EU has to progress. It is an exact timetable; it is not an issue but a series of representations of the actual fact of the timetable and the length of time it will take to go through Article 50, the negotiations, the WTO process and other stages. I hope that the Government will take on board that timetable. I have now had conversations with two government Ministers who seemed to have no idea that that is the timetable that we face and that has to be part of the thinking and decision-making of the Government.

The second issue is to say to the Government that the ongoing uncertainty is simply unacceptable. “Brexit is Brexit” three months after the referendum is not a satisfactory set of answers. I speak regularly with businesses, as do many noble Lords. We have gone from being asked questions about what we think the Government might be thinking to questions about whether the Government have any competence. That is dangerous territory to get into and I honestly think that we deserve to see the framework and the basic principles. One noble Lord said just now that it is possible that they will be told to the world at the Conservative Party conference. But this is Parliament and this is the place where those principles and frameworks should be brought before us. This is a big, important issue that goes far beyond the entertainment of a party conference.

I will talk a bit about the Bill. There are a few good measures that are worth saving, including raising the personal tax allowance to £11,500, which is a good Liberal Democrat policy, and cutting business rates for small businesses—a long-overdue relief for small businesses. But I hope that the Government will treat this just as a holding measure, because the framework for business taxes in this country is frankly unfit for purpose. I do not mind quick interim measures to tackle a problem, but we need something far more fundamental. Reforms of stamp duty must be right. Improvements to ISAs matter little with interest rates so low, but they go in the right direction. The whole issue around pensions, pension inequality and the structure of pensions was not tackled in the Bill—and it must be done.

The power of the Treasury to force companies to publish how much money they make and the tax they pay in each country where they operate, and the transparency amendment which the Government accepted, are both good as part of the programme to tackle tax avoidance. But again, this is a very timid and limited programme to tackle tax avoidance. On income tax relief for irrecoverable P2P loans—a small issue that pleased me greatly—if we are going to have challenges to the major banks, as surely we must, we have to make sure that issues like that are put on a level playing field.

However, there are serious problems and omissions in the Bill. First, it was predicated on a fiscal mandate that made no sense from the beginning: creating an overall budget surplus by 2019-20, and not just in the current account. You can argue about the date but quite frankly, the way it was defined, not as a surplus in the current account but including investment spending, was always daft. That target has had the impact of diminishing the Government’s infrastructure ambitions. At a time when we need growth, that is not an acceptable way to treat investment spending, and is particularly misjudged, as other noble Lords have said, when borrowing is so cheap. We debated that to some degree in my Private Member’s Bill on Friday. The Minister today will be aware, although I am sure that he will not admit it, of our lack of ambition in housing, broadband, energy—especially renewables—hospitals, schools and even transport outside London. Today some noble Lords have criticised HS2. I remain a backer of HS2, because quite frankly the Indian system of strapping people to the roofs of trains is not acceptable. I do not know how you will deal with the number of people trying to travel north out of London without a new line, and HS2 is the answer.

The Bill cuts corporate tax rates. The Government cannot make a coherent argument for such cuts, especially when they are financed by welfare cuts to poor working families, disabled people and young people. We already have among the lowest corporate tax rates in the OECD. However, it has evidently done us absolutely no good in persuading businesses to invest in new projects or in R&D: both are already at exceptionally low levels and major companies are sitting on a mountain of cash. Further cuts in corporate tax rates may please business but we have already learned that they will not motivate it. A race to the bottom in corporate tax rates is not a wise move for any major economy. It simply becomes beggar-my-neighbour.

Despite toughening the tax anti-avoidance rules in line with BEPS, which I totally support, it still looks as if the online giants will have plenty of scope in the UK to limit their tax payments. Action on tax avoidance is timid in the Bill, which still focuses on abuse, leaving plenty of grey areas where many companies stake out their tax minimisation strategy. I look forward to the debate in the House we will have later tonight which addresses that issue. As Liberal Democrats, we have commissioned Vince Cable and a panel of experts to look at business tax as a whole. The annual exercise of trying to catch the loopholes has become a nonsense. We need a new framework for business tax that recognises that value has shifted from hard assets to intellectual property, from local to global, and from employees to what is optimistically called the shared economy, in which the workforce carries the risk.

As for the cut in capital gains tax, which the Minister presented as such a positive, in the coalition years we raised capital gains tax to be close to income tax, which is a genuinely sound principle. Frankly, how the Government could think of cutting capital gains tax at a time like this, when so many people are still feeling austerity, is beyond me. It shows this ongoing focus on people who are much better off rather than on ordinary people.

In closing I challenge the Government on just three narrow but important issues. The first is to join the noble Lord, Lord Hollick, in calling for much more support for small businesses to go digital in their tax filings; and to be absolutely certain that they stand by their commitment to make quarterly tax reporting voluntary and not mandatory, which is an impossible burden for many small businesses.

The apprenticeship levy—essentially a payroll tax—is structured in such a way that an employee share ownership company pays more levy than a conventional company because of the way the dividend exclusion is defined. That is wrong; we need to embrace and encourage those shared ownership and mutual companies, which should not be deliberately disadvantaged.

Young people have received numerous blows from Conservative Budgets. In this Bill they are hard-hit again by the hike in tax on insurance premiums, because young people pay—I often suspect unfairly—higher insurance premiums for just about every insurance product. The Government did not think this through and acted as if they were not aware of it. They need to remedy this rapidly.

The Bill may soon become an Act, but shortly after that it really will be forgotten. I hope that the Government will take on board what has been discussed in this debate; it has brought up a wide range of general issues, including intergenerational fairness and the oncoming impact of artificial intelligence and machine learning, which will completely change job structures in the next five or more years. There are so many issues to be looked at and this is a great opportunity to do so. I hope that the Government, before they get to the Autumn Statement, will allow this House and the other place to engage in a much broader debate on many of the issues that were raised today.