Autumn Budget 2024

Baroness Neville-Rolfe Excerpts

Monday 11th November 2024 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I am speaking from the Back Benches today about productivity, but I want to start with a thank you to the Minister on two counts. He has rightly resisted the temptation to erode further horse racing’s competitiveness, vis-à-vis France and Ireland, by increasing betting duty—I declare an interest as a member of the racing APPG. I was also pleased to hear that the Government are going to tackle the ever-exploding level of retail crime. A few years ago, from the Back Benches, I sought an amendment to the Policing and Crime Bill to achieve just that, but although I worked constructively with the noble Lord, Lord Coaker, on a proposed amendment, I could not persuade him to be sufficiently radical. This Pauline conversion is most welcome.

As a country, our greatest economic challenge is to increase the growth rate, by which I mean GDP per person. The only sustainable way to do that is to increase productivity, and I was disappointed that the Budget includes so little to advance that aim. The truth is that the productivity figures since the financial crisis of 2008 make depressing reading. The situation is not the same everywhere, and I note that, in my old sector of retail, matters are somewhat better than elsewhere. According to the BRC, productivity in retail is 8.1% higher than in Q4 2019—which was before Covid—while the equivalent figure for the whole economy is 1.45%.

What should we do? The most important change is to have efficiency in mind when taking all decisions. The Government state that growth and productivity are right at the forefront of their concerns. That is a good start, but they have to act as though they mean it. They state in the Red Book that, in the medium term, above-inflation pay awards will be funded from improved productivity—good. It is a pity they did not follow that policy when, on attaining office, they awarded public sector bodies above-inflation pay awards costing £9.4 billion without any productivity conditions. I am glad the Government have seen the light on this, but will Minister look at my proposal for a new productivity and growth assessment to accompany all legislation, which I mentioned in our debate in the House on 9 October?

Other necessities are to reduce unnecessary bureaucracy and to examine environmental requirements. On bureaucracy, I do not believe that checks to counter money laundering need to be anything like as onerous and time-consuming as they are. The march of the data society, with its many benefits, has made government, regulators and others lazy. They do too much checking and collect too much information, instead of focusing on what really matters and doing that speedily. It creates some pretty awful jobs too, in both the public and private sectors. David Graeber, in his splendid book Bullshit Jobs, stresses how depressing this can be.

On environmental protection, I read with despair that HS2 has spent £100 million on building a tunnel to protect bats. Can we have a sense of proportion? Moreover, why are our electricity prices for industrial users, which make up the most productive part of the economy, treble those in India and the US? Both phenomena seem good candidates for early study by the new Office for Value for Money.

I turn to construction, including housebuilding and infrastructure; I have two points. The first relates to planning controls, which need simplifying and speeding up. The second relates to the building-related workforce. There is much evidence that more skilled labour of every kind will be required for the foreseeable future. What plans do the Government have to help in that regard?

Likes others, I am very concerned about the triple whammy of increased national insurance—especially the lower threshold—the new national minimum wage and the new regulation on workers’ rights. I know from my own experience that these are particularly difficult for SMEs because of the extra cost and bureaucracy that they will bring. The “good news”—I suppose—from a short-term productivity point of view is that this will send the less efficient into insolvency, but that is a very hard way to improve productivity.

As our new Conservative leader has so rightly said:

“It is not the Government that creates growth, it’s business that creates growth”.


The Government’s attitude to business and public sector efficiency so far is unsatisfactory. If they are to achieve their growth ambitions—which we all share—they need another Pauline conversion.

United Kingdom Declining Birth Rate

Baroness Neville-Rolfe Excerpts

Wednesday 6th November 2024 Lords Chamber

[Lord Livermore (Lab)]

My noble friend makes some very interesting points. I assure him that the Treasury is working closely with the Department for Science, Innovation, and Technology to advance the things that he mentions.

[Baroness Neville-Rolfe (Con)]

My Lords, we have just had a Budget which the OBR says will lead to a loss of jobs and the first ever taxes on education. What does this do for family life and for the birth rate in the shorter term?

[Lord Livermore (Lab)]

To clarify, the OBR is very clear that, over the next five years, employment will grow by 1.2 million people.

Working From Home: Public Sector Productivity

Baroness Neville-Rolfe Excerpts

Wednesday 23rd October 2024 Lords Chamber

[Lord Livermore (Lab)]

I am not sure I am going to be able to answer that right now, but, as set out by the noble Lord, Lord Darzi, in his investigation into the state of the NHS, productivity in the NHS has fallen significantly and is far too low. Improving productivity in the NHS is a key priority. What the noble Lord said about management was really interesting. Emerging studies show that, where workforces are well managed, productivity can rise with working from home. This is a point that the noble Lord who asked the original Question raised in a previous debate on this subject, which I read: the quality of management has a key impact on productivity when working from home.

[Baroness Neville-Rolfe (Con)]

My Lords, although good management certainly makes a difference, there is strong evidence from academic studies that working from home reduces productivity—although there are other benefits. So far, this Government have been coy about publishing office attendance figures for government departments, as we used to do. Will the Minister ensure that the publication of such figures is restarted and that working from home is limited to those areas where efficiency is not compromised?

[Lord Livermore (Lab)]

This Government have exactly the same policy in terms of civil servants working from home as the last Government: civil servants should be in the office for a minimum of 60% of the time. That is unchanged and those figures will of course be published in exactly the same way. The noble Baroness said that working from home reduced productivity: that is not actually the case, according to many studies. I read one from the IMF recently that said that the positive and negative effects of working from home roughly offset each other, generating no net productivity impact.

Finance (No. 2) Bill

Baroness Neville-Rolfe Excerpts

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords
Wednesday 26th April 2017 Lords Chamber

Moved by

[Baroness Neville-Rolfe]

That the Bill be now read a second time.

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

My Lords, this Government have long demonstrated that we can deliver a stronger, more secure economy. The economy continues to grow robustly, employment is at a record high and the deficit has been brought down by almost two-thirds. Following discussions, the Bill before us is shorter than on its introduction in the other place. None the less, the changes it will make take significant steps in helping to create a fairer and more sustainable tax system.

Following the parliamentary vote on the general election, the Finance Bill is proceeding on the basis of consensus. At the request of the Opposition, the Bill has been amended to take out a number of measures originally included. There has been no policy change. The provisions before the House will make a significant contribution to the public finances and the Government will legislate for the remaining provisions at the earliest opportunity at the start of the new Parliament. These include: corporation tax restrictions on interest expense and on loss relief; the reduction in the dividends allowance; changes to the tax treatment of the non-domiciled; anti-avoidance changes, such as the new penalty for enablers of tax avoidance; and the primary legislation for the Making Tax Digital programme. The Government remain committed to the digital future of the tax system, a principle which has been widely accepted in extensive consultation. I want, in passing, to acknowledge the work that the Economic Affairs Finance Bill Sub-Committee has done on the tax administration aspects of the programme. The Government have decided to pursue this measure in a Finance Bill in the next Parliament, in the light of the restrictions on time which now apply.

I now turn briefly to the main provisions included in the Bill before us. The UK has one of the highest rates of obesity among developed countries. Soft drinks are a major source of sugar in children’s diets. Obesity drives disease and it costs our economy. The NHS incurs direct costs of over £6 billion each year from treating ill health related to obesity. The Bill legislates for a soft drinks industry levy to encourage producers to reduce added sugar in their drinks. I am pleased that this change has gathered a wide degree of support here and elsewhere. I am even more pleased that the levy is already working, with Tesco—once my employer, so that is good to hear—and the manufacturers of Lucozade, Ribena and Irn-Bru among those already committing to reformulate their drinks and reduce added sugar. That is good news for our children’s health and, although revenues will be lower, we will maintain the full £1 billion funding committed to the Department for Education to give children a better and healthier future.

There has been debate as to whether the levy should go further and, in particular, whether it should apply to milk-based drinks. Milk and milk products are a source of calcium and other nutrients. One in five teenage girls do not get enough calcium in their diet, and the same is true for one in 10 teenage boys. However, we want milk-based drinks to contain less added sugar, so Public Health England will challenge and support producers to reduce added sugar content by 20% by 2020, and will publish a detailed assessment of progress in that year. Yesterday, in the other place, my honourable friend the Financial Secretary, Jane Ellison, committed to review the exclusion for milk-based drinks in 2020, based on the evidence from Public Health England’s assessment of producers’ progress against their sugar reduction targets. I am happy to reaffirm that today.

The Finance Bill also legislates for increases in duty rates as announced in the Spring Budget and that took effect shortly afterwards. These increase tobacco duty rates by 2% above RPI inflation for all tobacco products, which also makes an important contribution to the Government’s wider health agenda to reduce smoking prevalence. A minimum excise tax on cigarettes ensures that the cheapest cigarettes will pay a minimum level of duty, making it less profitable to sell cigarette packs below this level. Alcohol duties will be uprated in line with RPI inflation, while producers will continue to benefit from the effect of freezes and reductions in recent years.

The Finance Bill makes an important contribution to securing the nation’s public finances, reducing the deficit while allowing the Government to support our critical public services. For that reason, we announced in the Autumn Statement an increase in the rate of insurance premium tax from 10% to 12%. The Bill provides for this increase, which will take effect from 1 June and is expected to contribute over £800 million annually to the public finances.

Turning now to personal tax, the tax system needs to keep pace with the different ways in which people are working. As the Chancellor set out in both the Autumn Statement and in the Spring Budget, the public finances face a growing risk from the cost of incorporations. Indeed, the Government estimate that by 2021-22 the cost to the Exchequer from people choosing to work through a company will be over £6 billion. Part of this arises from people choosing to work through their own personal services company who would otherwise be classed as employees. The off-payroll working rules, also known as IR35, are designed to ensure that, where individuals work in a similar way to employees, they pay broadly the same taxes. However, non-compliance is high, costing an estimated £700 million each year. The Finance Bill therefore addresses this by transferring the liability for compliance with the rules in the public sector to the body for which the individual is working. We expect it to improve compliance significantly, raising revenue, while simply ensuring that the correct amount of tax is paid under the existing rules.

Finally, while some changes to address tax avoidance and evasion originally included in the Bill have been omitted and will be legislated for at the next available opportunity, the Bill includes a number of changes that advance the Government’s aims in this area. This Government are committed to tackling tax avoidance and evasion at all levels in order to ensure that everyone, no matter who they are, pays the right amount of tax at the right time. Since 2010, we have invested more than £1.8 billion in HMRC to tackle evasion, avoidance and non-compliance, helping to secure more than £140 billion in additional tax revenues. This includes more than £45 billion from large businesses and more than £2.5 billion from the very wealthiest. The UK also has one of the lowest tax gaps in the world, and the Government have announced more than 35 policies in this Parliament which are forecast to raise more than £18.5 billion by 2021-22. The Finance Bill extends that record by making changes to ensure that those who promote tax avoidance schemes cannot circumvent the rules by reorganising their business while continuing to use high-risk tactics in promoting avoidance schemes. It tackles abuse of the VAT relief for adapted motor vehicles and introduces a new charge on loans from disguised remuneration schemes that have allowed beneficiaries to avoid paying the tax that should have been due on their employment. The Government’s record on tackling avoidance and evasion and making sure that tax is paid fairly is one of which I am proud.

So to conclude, this Finance Bill supports our commitment to a fair and sustainable tax system, one that can support our critical public services and gets the country back to living within its means. I beg to move.

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, I thank noble Lords for their valuable contributions to this select debate. In his wide-ranging speech, the noble Lord, Lord Haskel, mentioned the importance of social measures and, as usual, made a number of interesting suggestions, including the point he often rightly makes about the importance of digital. On this occasion he not only referenced the workplace generally but the importance of getting it right in Whitehall.

On care and the NHS, to which he referred and which was also tackled by the noble Lord, Lord Davies of Oldham, we announced at the spring Budget an additional £2 billion for social care. This will help to ease pressures on the NHS by supporting more people to be discharged from hospital and into care as soon as they are ready. We are giving the NHS the funding that it needs. The Five Year Forward View plan asked for annual funding to rise by a minimum of £8 billion above inflation by 2020-21 and for investment to be frontloaded. The Government have delivered what the NHS asked for on both counts: the NHS’s annual funding will increase by £10 billion above inflation by 2020-21 and £6 billion of this £10 billion will be delivered by the end of 2016-17, which is particularly important. I was pleased that to help manage demand on A&E we have committed to provide £100 million of new capital investment in A&E departments because that will help to ensure that patients access the most appropriate care as quickly as possible by improving the space for assessing patients and providing on-site GP facilities. This can help with bed blockers and is a good example of how things can be improved through management and efficiency, which I always regard as extremely important.

The noble Lord, Lord Haskel, talked about business investment and growing consumer debt. The OBR forecast business investment to grow by 15% over the forecast horizon period to 2021 and to rise as a share of GDP. Households’ financial positions are certainly stronger than they were before the financial crisis, and debt interest as a proportion of income is at a record low.

The noble Lord also talked about productivity, a subject that we have often debated here. At the Autumn Statement, we announced £23 billion of extra investment through the national productivity investment fund, and tackling the UK’s productivity challenge is a priority. To respond to the noble Lord, Lord Davies: the Chancellor mentions it often, it has pride of place in the Prime Minister’s industrial strategy consultation and I agree that it is important. The Government are taking targeted action to invest in important things such as innovation, infrastructure and digital, to promote skills, to improve management and—I see my noble friend the Minister for Trade here—to encourage firms to export, which always tends to be associated with strong productivity growth. There is work to do, as has been said, but productivity as measured by output per hour grew by 0.4% in Q3 of 2016 and by 0.4% in Q4 of 2016.

The noble Lord, Lord Haskel, asked about Brexit resourcing. The Treasury is working with all departments to understand the work required to prepare for a successful exit from the EU. Although aggregate spending plans for this review period remain in place, I can assure the noble Lord that the Treasury continues to engage with departments to ensure the right resources are allocated to the right places. I would add that I know from my own experience in dealing with Brexit for financial services that there is very high-quality Civil Service and external support, both in the Treasury and in DExEU.

The noble Lord, Lord Davies, asked about HMRC resourcing. The Government have always ensured that HMRC has the resources it needs. It makes sense to do so, and since 2010 we have invested over £1.8 billion in HMRC, and steps have again been taken to improve its effectiveness and efficiency.

I, too, was grateful to the noble Lord, Lord Kerr of Kinlochard, for joining us in the gap to share his view on making tax digital and for referring to the two recent parliamentary reports on the subject—particularly the one that was done in this House by the Finance Bill Sub-Committee, which I mentioned in my opening remarks. I am always very grateful for the work that is done on Treasury areas in the House. It really helps us to improve policy formation. Although there has been no change of policy, I entirely accept that time is needed for proper debate and scrutiny of the provisions for making tax digital. The Government remain committed to the digital future of the tax system—it was good to hear support for that from the Opposition Benches—and it was of course, in principle, accepted in the extensive consultation we held. But more time is needed for parliamentary scrutiny, and that will be made available at the earliest opportunity in the next Parliament.

I am grateful to noble colleagues for their contributions. We will debate some of the wider issues in the country, when we will demonstrate that we have a programme for a stronger, more secure and more productive economy under a Prime Minister who is also determined to lead a country which works for all people and for all regions.

I have this evening outlined the benefits that the finance Bill, in this form, will bring in advancing our aims for a fair and sustainable tax system. I take this opportunity to thank Treasury officials for their high-quality support on the Bill and for getting it quickly into a state in which it could be considered today. On that basis, I invite the House to give the Bill a second reading.

Bill read a second time. Committee negatived. Standing Order 46 having been suspended, the Bill was read a third time and passed.

UK Convergence Programme

Baroness Neville-Rolfe Excerpts

Monday 24th April 2017 Lords Chamber

Moved by

[Baroness Neville-Rolfe]

That this House approves, for the purposes of section 5 of the European Communities (Amendment) Act 1993, HM Government’s assessment as set out in the Budget Report and Autumn Statement, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook and Fiscal Sustainability Report, which forms the basis of the United Kingdom’s Convergence Programme.

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

My Lords, the major political events of the past few weeks have been the calling of a general election and the triggering by the UK of Article 50 of the Lisbon treaty, giving notice of our withdrawal from the EU. Given that background, today’s debate, which stems from arrangements and rules in essence designed to ensure economic convergence among EU member states, might at first glance look a little odd. But the oddity, if it exists, is on the surface only, and there is good reason for submitting the 2016-17 convergence programme before us. Most importantly, there is the fact that, until we leave the EU, we have all the rights and obligations of a member state. Of course, we continue to exercise our rights of membership in this period, and the document before us, which explains UK economic policy, especially in relation to maintaining stability and bringing down the deficit, is one such obligation.

In practice, drafting the paper was relatively straightforward, since it is based on the Spring Budget report and the OBR’s most recent Economic and Fiscal Outlook. I am sure that noble Lords who have examined it will have seen much familiar content.

I should draw to the attention of noble Lords one detailed but vital point. It is the Government’s assessment of the UK’s economic and budgetary position, and not the convergence programme itself, that requires the approval of the House. There is one further point which I should stress now. It is that, as the UK is outside the eurozone, we cannot be subject to any sanctions under the EU fiscal rules encompassed in the stability and growth pact of which the convergence programme forms part.

It may be helpful to the House if I provide a brief overview of the information that we have set out in the UK’s convergence programme, even though much of this will be familiar. Perhaps the most pleasing point is that in March 2017 we were in a better position economically than many—indeed, most—had predicted. The IMF recently revised up its 2017 growth forecast for the UK by 0.5 percentage points and growth in the second half of 2016 was stronger than the OBR anticipated in the Autumn Statement. In fact, last year the UK grew faster than most other advanced major economies, with near record employment, too. The deficit has also been reduced. Overall public sector net borrowing as a percentage of GDP is predicted to fall from 3.8% last year to 2.6% this year. It is then forecast to be 2.9% in 2017-18 and to fall thereafter to 0.7% in 2021-22—its lowest level in two decades.

As a consequence of all this, we are forecast to meet the EU’s 3% stability and growth pact target this year, for the first time in almost a decade. Accordingly, the UK will cease to be subject to the EU’s excessive deficit procedure. Although we are leaving the EU, this is good news. We are within sight of bringing to a halt the increase in the national debt as a proportion of GDP. Nevertheless, at nearly 90% of GDP, the Government believe our debt level is too high. That is why they set out fiscal rules that combine the flexibility to support the economy if necessary in the near term with a long-term objective of returning the public finances to a sustainable position.

The OBR forecasts that business investment will remain subdued as we begin the period of negotiation with our EU friends and partners. It continues to judge that, in the medium term, growth will slow due to weaker growth in consumer demand as a consequence of a rise in inflation. Accordingly, putting the public finances in good order will remain vital for the foreseeable future, all the more so given that the deficit remains too high and that there is a range of risks in the global economy. That is why we are getting ourselves into a position of readiness to handle difficulties of any kind that might come our way.

Our fiscal rules, which enable us to do that, strike the right balance between reducing the deficit, maintaining flexibility and investing for the long term. Our Autumn Statement and Spring Budget set out our plans to build on recent economic growth and our strong employment record, and indeed to raise productivity, which has been disappointingly weak over a long period. We are taking action to improve skills, to give more children the chance to go to a good school, to support the care system and the NHS, to drive innovation and to invest in infrastructure and digital. We have consulted on a Green Paper about an industrial strategy aimed at delivering a high-skilled, productive, competitive economy that benefits people in all parts of the UK. Sound public finances are an absolute necessity to make this happen and to provide the level of public services we all wish to see. That is essentially what the convergence process is about.

To conclude, following the House’s approval of the economic and budgetary assessment that forms the basis of the convergence programme, the Government will submit it to the Council of the European Union and to the European Commission. Doing so also provides the EU with a useful framework for co-ordinating fiscal policies. A degree of fiscal policy co-ordination across countries can be beneficial to ensure a stable global economy, which is of course in our own interest. The UK has always taken part in international mechanisms for policy co-ordination, such as the G7, G20 and OECD. Although we are leaving the EU, we will continue to have a deep interest in the economic stability and prosperity of our European friends and neighbours. We will also continue to play our part in this process while we remain an EU member, and we will play our part in other international policy co-ordination processes once we have left the EU. The Government are committed to ensuring that we act in full accordance with Section 5 of the European Communities (Amendment) Act 1993, and I ask this House to approve the economic and budgetary assessment that forms the basis of the convergence programme. I beg to move.

[Lord Davies of Oldham (Lab)]

My Lords, the Minister made the best fist of a pretty thin case. First, it is somewhat absurd that we are debating and seeking to put through a Motion on the issue of convergence just at the point when the Government have set their sails in the opposite direction, away from any convergence as far as their direct relationship with the European Community is concerned. At least the Minister in the other place, when pressed on this particular obvious sailing point, said, “Well, I don’t really think the issues of convergence affected government policy a great deal”. It is quite clear that the Government have had their own agenda for the economy and have pursued it with considerable rigour, at particular cost to sections of our population—and, I might add, to the economy as a whole. But the issue of convergence certainly did not rank particularly highly in that agenda and the Government, I imagine, can therefore begin their approach to the question of Brexit untrammelled with any regrets that no British Government will have to face up to this issue in the future.

The Government are making much at this stage of economic growth over the last year and a half, with the prediction that it might last a little longer. That is against a background where their record on economic growth was close to catastrophic. They presided over the slowest recovery from a recession in more than 100 years and followed the worst policies for getting the country back on to an even keel. What has this meant? Their target was 2015, which was two years ago. They were meant to hit their target in 2015 but we now have a revision under a new Chancellor, who has slightly more elastic concepts on how rigorous an onslaught should be pursued on the debt position. He is saying that it may be the early 2020s but has not made too great an assurance about that. What would your Lordships say normally to anybody who had promised that they would bend every sinew to producing a position where they got out of debt in five years, and then after seven years said, “We haven’t made it—in fact, we are only half way there and we don’t think we’ll be able to do it for another five years anyway”? It suggests that there is a slight flaw in the Government’s thinking on how well they have done with the economy over the last few years.

The other dimension of it is quite clear: the absence of growth has reduced significantly the receipts to the Exchequer and made the Government’s onslaught on public expenditure even more savage. The Government boast about the fact that they have been conducting their position on public expenditure with a real sense of fairness. Tell that to the disabled. Tell that to the families where children are entering poverty in numbers that we have not seen for two decades. Tell that to the people who are seeing benefits for those in work cut at the levels which they are by this Government. That is to say nothing about what I hope the Government recognise is a crisis in the health service, or about the problems we have with regard to welfare and in particular with care for the aged. It says nothing about the real problems of so many in our community, who depend upon government handouts not because they are idle and have brought things upon themselves but because they live in a society, and an economy, in which it is difficult for them to earn sufficient to sustain their living standards. Yet the Government are busy eroding any support which they enjoy.

Let us turn as well to the question that the Government always emphasise as such a significant achievement: levels of employment. What kind of employment is it? It is no coincidence that when the Minister says that we have made painfully little progress—I am not sure whether she used quite that adverb but she was generous enough to concede that progress on productivity has been limited in recent years—it is a direct reflection of the employment conditions of so many of our people. Far from them being engaged in enterprises alongside employers who are seeking to promote the work, to engage the workers constructively and perhaps even from time to time to listen to them on how work could be done better, we have the exact antithesis. We have people on zero-hours contracts with no commitment to the company at all, apart from the hope that they will be able each week to sustain enough hours in work to keep their living standards.

What employers have been doing is worse. There are appalling examples. They have been saying to such people, “Sling your hook”. That phrase comes from dockers in the 19th century who turned up for work with their hook and if not so many were needed or those who were needed were carefully selected, they rest had to sling their hook, go away and receive no remuneration or sustenance of living standards. It is not surprising that the late 19th-century state had to react to that situation in the face of such discontent. The Government may feel that they are not presiding over a period of such discontent at this time. That may partially be because so many of the people who are in that position have no voice. They have no voice because the very vulnerability of the work they do renders them unable to challenge.

What does this all mean? It means that the Government are now engaged upon Brexit, which will dominate all political and economic debate for a considerable period ahead. What is conspicuous about Brexit—I hope the Minister may at least own up to this fact—is that the Government had absolutely no plans to cope with Brexit and had not anticipated that the vote might go that way. If they did anticipate it, they are very culpable for leaving us in this position, where it is quite clear that our negotiating position is a good deal weaker than it ought to be. The Government keep on saying that we are out on a deep, wide ocean and that we can greatly increase our trade with others whom we have neglected in the past. I have not noticed the British economy neglecting markets in the past. Our problem is being able to be sufficiently competitive to win them. We are walking out on the largest market of all. Whenever the Government mention the United States, India or China, do they not realise that trade with those countries adds up to only a fraction of that which we enjoy at present under the framework of the European Community? That is the nature of the risk being taken.

I realise that this is a straightforward Motion today. There is no question of the Opposition not seeing that we make a last gesture towards convergence, which is required of us as long as we are a member of the European Community, which we are at present. Underpinning it all—and this is what this Government have to face up to—is the basic weakness of their economic position. That may not worry Ministers in this House too much because, although they would probably like to continue in office, it is not quite as serious a threat as that to Ministers at the other end who have to retain not just their office but their seat as well. The confidence of Ministers in the other place may be shaken somewhat, and therefore, although I have indicated that the Opposition support this Motion, I offer some warnings as to the future.

[Baroness Neville-Rolfe]

First, I thank the noble Lord, Lord Davies of Oldham, for supporting the Motion and for filling the void in a debate with few participants today. I suspect he will not be surprised to learn that I do not agree with his cynicism. We have our own economic policy of course in this country, and as I tried to explain, the work to bring deficits down is important from both a European Union and a UK point of view, and we have made progress. It has been difficult, not least because of the legacy—the mess—that we inherited on the economic side, but since 2010 our economy has grown by 14.6%: faster than Germany’s and twice as fast as France’s. As I mentioned in my opening remarks, we have had good news recently from the IMF, and indeed the CBI published strong figures today. The deficit has been cut by almost two-thirds from a post-war peak of 8.8% and, as he acknowledged, employment is up, by nearly 2.8 million. The employment rate is at a record high of 74.6%.

This is, in my experience, the envy of other member states in Europe, alongside the small business creation that we have also managed to oversee. Our labour laws are strong, and will remain strong, but they also allow different types of employment which have helped us in this country to grow and to innovate. The rise in employment is not all in lower-paid or unskilled jobs. Three-quarters of the rise is in higher-skilled occupations. Zero-hours contracts have a part to play in a modern, flexible labour market, as we have debated before. They are also a small proportion of the workforce—2.8%. We have invested for the future and are at last tackling productivity in a comprehensive way, something which I am certainly very engaged in.

I do not think there is any point in us arguing about Brexit, but I am clear that our bold and ambitious plan offers this country a great future.

As I stated in my opening remarks, following this debate, and with Parliament’s approval, the Government will inform the Council of the European Union and the European Commission of our assessment of the UK’s medium-term economic and budgetary position. This is a legal requirement under the EU’s stability and growth pact, and the information we present is based entirely on information and documents already presented to Parliament and, in the main, debated. That includes the Budget we set out this spring, which upholds our economic stability, invests in the future and keeps the UK on a clear path to prosperity over the long term. The foundation of all those things lies in our work to improve the national finances, and that is the basis of the convergence programme that we are, this month, presenting to the EU. I am pleased to commend this to the House.

Motion agreed.

Premium Bonds

Baroness Neville-Rolfe Excerpts

Thursday 23rd March 2017 Lords Chamber

[Lord Lee of Trafford (LD)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I declare an interest as a bond holder—one among 21 million.

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

My Lords, premium bonds are a popular savings product. They date back to 1956 and were introduced by Harold Macmillan, the Chancellor of the Exchequer of the day. They provide a way for government to raise debt financing through the retail savings market. Depending on the Government’s financing requirement, NS&I promotes sales through its website, through direct correspondence with customers, through media coverage and through advertising.

[Lord Lee of Trafford]

My Lords, is it not time, after 60 years, to look again at the rules and aims of premiums bonds? Specifically, why cannot clubs, societies and charities own premium bonds? Could not those who win, say, £25 but do not wish to receive that prize have it designated and directed to a national charity by ticking a box? More radically, could we not think about reconstructing and converting premium bonds into something perhaps rather more popular, such as national care bonds? I think that would generate much greater public support, particularly if the unclaimed prizes were hypothecated to the care sector.

[Baroness Neville-Rolfe]

My Lords, that is for a debate, not a Question. I am not a fan of hypothecation. The Government raise premium bonds to fund government expenditure, as I have explained, and obviously there is nothing to stop anybody giving their tax-free winnings to charity as they see fit. We do not have any plans to introduce a direct transfer to charities, which would require stakeholder consultation and a systems change. The product is a good part of the portfolio of savings products that we have and, as I said, it is very popular.

[Lord Dubs (Lab)]

My Lords, would not more people buy premium bonds if there were not such a miserably low rate of interest?

[Baroness Neville-Rolfe]

We try to make sure that premium bonds are a reasonable deal in the market for savings. The noble Lord will probably know that we delayed reducing the rates on premium bonds until quite recently. They continue to be popular, and it makes sense to look at them in the round, aiming for a balance for savers and taxpayers, as well as stability in the sector, obviously, in which they have a role as part of NS&I’s work.

[Lord Lansley (Con)]

My Lords, will the Government consider giving pensioners who are eligible for the winter fuel payment the option of electing to receive premium bonds instead of a cash payment, thereby helping to meet the Government’s funding requirement and reducing the cash call on government?

[Baroness Neville-Rolfe]

That is another innovative idea for premium bonds. I will certainly think about it, but the basic point about premium bonds is that they have to be part of a portfolio of sensible savings, such as the investment bond that we are bringing in. That seems to me the right way to go. They are popular and successful, and they give people a bit of excitement, as well as easy access to saving, and there is a 100% Treasury guarantee.

[Lord Davies of Oldham (Lab)]

My Lords, every statistician and financial adviser can establish that premium bonds are a pretty poor deal, and the Government are in the business of reducing the rate yet again, so the deal is not getting any better. What they are is a flutter but, as my horse will fall at the second fence in the Grand National in the fairly near future, I am not going to argue against gambling at this point.

[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.

[Lord Forsyth of Drumlean (Con)]

My Lords, would my noble friend look at the rules, which, while respecting the importance of avoiding money laundering, make it extremely difficult for grandparents and others to gift premium bonds to young children? That would be a very useful way of encouraging saving.

--- Later in debate ---

[Baroness Neville-Rolfe]

I am grateful to my noble friend. I will certainly look at the point without commitment.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I am not sure whether the Minister is old enough to qualify for the silly £10 a year Christmas bonus that most of the people in this Chamber will receive. Apparently it was introduced decades ago and if it had been updated with inflation it would now be worth £187 a year. Building on the suggestion of the noble Lord, Lord Lansley, why should that not be converted into savings rather than paid out, when many people do not know what it is about, why they are receiving it or what they do with it?

[Baroness Neville-Rolfe]

The noble Lord highlights that there are many good pension benefits in this country. I take his point but this is a difficult area in which to make sudden changes.

Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017

Baroness Neville-Rolfe Excerpts

Thursday 23rd March 2017 Lords Chamber

Moved by

[Baroness Neville-Rolfe]

That the draft Order laid before the House on 9 February be approved.

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

My Lords, the order that we are looking at today forms part of the UK’s transposition of the markets in financial instruments directive II. The directive is accompanied by the markets in financial instruments regulation. I will, if I may, refer to these collectively as MiFID II.

Before I turn to the specific changes made by the order, let me start by explaining the important context in which the changes are made. MiFID II is a key part of our post-financial-crisis regulatory reform. Agreed by the EU in 2014, it will have a significant role in strengthening the regulation and transparency of our financial and commodity markets. This means keeping pace with market developments and strengthening the protections available for investors. MiFID II applies from 3 January 2018 and member states are under an obligation to transpose the directive into national law by July 2017. That brings us to why we are here today.

In the UK, we are transposing MiFID II through legislation and regulators’ rules. Last month, we concluded our consultation on the legislative changes needed to do that. This order therefore makes amendments to the regulated activities order, which sets the regulatory perimeter for financial services in the UK, to give effect to MiFID II.

The order makes three key changes. First, it brings the new activities and investments introduced by MiFID II within the regulatory perimeter. This includes, for example, structured deposits which are sold or advised to clients, emissions allowances and organised trading facilities. In accordance with the regulated activities order, this will mean that performing a specified activity in relation to a specified investment is a regulated activity for the purposes of the Financial Services and Markets Act.

Secondly, the order classifies binary options as a type of financial instrument. This means that the regulation of binary options will move from the Gambling Commission, where they are currently regulated as bets, to the Financial Conduct Authority. An example would be betting a sum of money against the FTSE 100 rising by 50 points. This is an important change that will ensure that consumers receive at least equivalent protections to those that exist with similar financial instruments.

Thirdly, the order updates definitions, references and makes a number of minor amendments to allow MiFID II to operate within our domestic legislative framework. I will be happy to answer any questions that your Lordships may have on the detail of the order as far as I am able. I beg to move.

[Lord Davies of Oldham (Lab)]

My Lords, I apologise to the Minister for failing to contact her yesterday and give her some indication of one or two of the anxieties that I had about the order, but I am afraid that the disruption that affected the Palace also affected my liaison. Consequently, I was not able to warn her of what is to come. Nevertheless, I am sure she will be able to answer the points I make with great facility, as she usually does, or, if not, perhaps she will write to me in due course on the issues which are not covered.

Of course, we support MiFID II and bringing it into our national law. It entrenches consumer protection. If we learnt one thing from the financial crash of 2008, it was the need to guarantee consumer protection in the most adverse circumstances. MiFID is a European response to that worldwide crisis, which affected our colleagues in Europe as it did us here in Britain. I appreciate the fact that the Minister has brought the instrument forward.

The consultation for the Government’s transposition plans revealed that, along with this order, two further statutory instruments were required in order to deliver MiFID II: the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations and the data reporting services regulations. When can this House expect to scrutinise and debate those instruments? They are a crucial part of the package. As the Minister will appreciate, they have at least an indirect impact on the workings of the instrument in front of us today—I am thinking particularly of the extended regulatory provisions and their subsequent impact on the FCA and PRA. Given this, perhaps it would have been more helpful to debate all three instruments in the round, but we are making progress on this one first.

The public consultation on transposing MiFID closed in June 2015, nearly two years ago. The Economic Secretary to the Treasury, when moving this order in the other place, stated that,

“last month we concluded our consultation on the legislation needed”.—[Official Report, Commons, Second Delegated Legislation Committee, 14/3/17; col. 1.]

What were those discussions, who were they with and why did they last so long? Where are the documents on those proceedings, which, as far as I know, are not available to your Lordships’ House?

We of course support the supervision of binary options being transferred from the Gambling Commission to the Financial Conduct Authority. We agree that they are financial instruments and as such the FCA is clearly better placed to regulate their use. When does the Minister expect the FCA to produce its guidance, particularly about how it intends to protect potentially vulnerable consumers? The Minister will clearly appreciate that consumers need full disclosure about the product they are purchasing and we need the greatest clarity. Related to this, the consultation document says:

“Ahead of the legislation coming into force, the Government will consider whether consequential amendments to the Gambling Act 2005 are necessary in order to support the transfer of the regulation of relevant binary options from the Gambling Commission”.


I was somewhat involved in the Gambling Act. The experience does not rate enormously highly on the list of my joys in speaking in this House and introducing legislation, so I am very glad to see that the Government are taking a very different view in this instance.

The consultation document goes on to say that further consideration will be given to the fee arrangements for firms that hold a Gambling Commission licence and to the implications of these legislative amendments for the relevant tax framework. Again, I do not expect an immediate, full answer today—perhaps I will get one—but I hope we will get an indication as to the progress that is to be made. Can the Minister say where the Government are on these issues, given that they are not included in the order? I am sure that firms will be grateful for clarification as to where they will stand when this legislation comes into force.

I feel particularly guilty about dropping my last question on the Minister at this point, but she has enormous support and great experience and she will handle it readily. I would have given her notice had I not been so disrupted by events yesterday. An issue was raised in the Explanatory Memorandum which accompanies this order. It says:

“The Treasury is working closely with representatives from local government and the FCA in order to mitigate the possible effect on local government’s participation in financial markets”.


Yet we have not been able to find anywhere in the impact assessment or the consultation document what the Government expect those effects to be. Is the Minister in a position to outline the key monetised and non-monetised issues involved in the transposition of MiFID II for local government in this country? What discussions have taken place between local government representatives and the Treasury?

My final point relates to costings. The estimated annual net cost to business has been calculated at £105.2 million, while the impact assessment states that the direct impact on business will be £148.5 million. Can the Minister clarify the disparity between these two figures?

[Baroness Neville-Rolfe]

My Lords, I thank the noble Lord for offering to accept a written response to some of his detailed points. We were all disrupted yesterday; it was an extraordinary day. My officials have had a great deal of difficulty advising me because nobody without a parliamentary pass is now allowed into the building. That makes it somewhat difficult for me to answer all his questions. I will do my best and will then follow up, copying the reply to anybody else who has an interest in the issues.

I very much agree with the noble Lord that these changes enhance consumer protection. We have to transpose vital parts of the post-financial crisis legislation into UK law and, indeed, until exit negotiations conclude we have an obligation to do so: we need to move ahead.

The noble Lord asked about the transposition of MiFID II in the round. As he said, in February we concluded our consultation on the legislation needed to transpose the instruments and there will be three statutory instruments. One is the order we are discussing today. As I explained, that applies from 3 January and we are under an obligation to transpose it into law by July, which I understand is very important in terms of people making preparations.

Of the other two statutory instruments, one transposes relevant requirements on the provision of data reporting services and the second transposes a wide range of other MiFID II requirements. For example, in accordance with MiFID II, it creates a position limits regime and imposes obligations on certain persons engaging in algorithmic trading. Regulators have also been consulting on the proposed rules to transpose MiFID II, one or two of which the noble Lord mentioned. I will obviously take away the point he made about consultation and debate on those issues.

I was glad to have the noble Lord’s support on the changes on options and I will look carefully at what he asked about the Gambling Act. However, there is a fair amount of agreement that it is right to bring that into the curtilage of the FCA. I am afraid that I do not have a reply on local government and I will ensure that I respond properly in my forthcoming letter.

It seems to be agreed that these are important reforms to ensure that our financial system is transparent and resilient. This is important to the City of London and other financial service operators right across the UK, which actually provide more employment outside London than in London. The changes form part of the wider regulatory reforms since the financial crisis to ensure the efficient functioning of our financial markets. I hope that we have learnt lessons from the past; this legislation puts those into practice by ensuring that our financial markets are effective and stable. There has been a fair degree of consultation. The noble Lord knows that I always value that, but I will ensure that his specific questions are answered and if necessary, we can have a further word about that.

[Lord Davies of Oldham]

Let me say how much I appreciate the Minister’s response. She will know that we are enthusiastic about the developments contained in the MiFID position. I was therefore not in any way being critical of the Government, merely seeking to elucidate things further. I am grateful for her response.

Crown Estate Transfer Scheme 2017

Baroness Neville-Rolfe Excerpts

Thursday 23rd March 2017 Lords Chamber

Moved by

[Baroness Neville-Rolfe]

That the draft Scheme laid before the House on 1 March be approved.

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

My Lords, this instrument seeks to ensure that it is Scottish citizens who benefit from the revenues raised from the wholly-owned assets of the Crown Estate in Scotland. That was a specific recommendation made by the Smith commission agreement in its report on the further devolution of powers to the Scottish Parliament. We have worked closely with stakeholders to make sure that we are ready to implement it, and to transfer the management of the Scottish assets efficiently. The draft scheme has been agreed with the Scottish Government.

Allow me to clarify two important aspects of the provisions in this scheme: first, the nature of the change and, secondly, the important protections it incorporates. Under this draft scheme, all rights and liabilities connected to managing these Scottish assets will be transferred to Crown Estate Scotland (Interim Management). Revenues will henceforth go to the Scottish Consolidated Fund and the commissioners currently managing these assets will have no further role in doing so. Assets will, however, continue to be managed on behalf of the Crown and maintained as an “estate in land”, which ensures that any sale receipts must be reinvested. This is in accordance with the Scotland Act 1998.

I should also be clear that the assets include both rural and urban holdings, and mineral and salmon fishing rights. This includes an area that incorporates around half of the coastal foreshore and almost all of the sea bed, covering all the Crown Estate’s activities up to the 200 nautical miles limit. Your Lordships will recall the amendment proposed by the noble and learned Lord, Lord Wallace of Tankerness, during debate on the Scotland Bill to ensure devolution of aspects of the management of the Scottish assets to the island authorities. As my noble friend Lord Dunlop said at the time, we believe that the devolution of management responsibilities will be quicker, simpler and come with fewer practical difficulties if the UK Government devolve these responsibilities in a single transfer to Crown Estate Scotland (Interim Management). This is what the transfer scheme delivers.

A consultation is now under way by the Scottish Government to consider the long-term management of the Scottish assets. The Government will make a Written Ministerial Statement to Parliament six months after the transfer of the assets. This Statement will outline the progress that the Scottish Government have made on the onward devolution of these assets.

I now turn to the second point, the important protections set out in this instrument. One of the key considerations is that this scheme ensures the continued safety of citizens across the UK by ensuring that the transfer is not detrimental to defence or national security. The Scottish assets are key to delivering strategic capabilities for the defence and security of the whole of the UK. It is prudent to ensure that there are powers which the Secretary of State for Defence can exercise where there is an overriding public interest to do so. These powers will enable the UK Government to protect all of their citizens both now and in the future. It also protects other UK-wide interests, such as maintaining a consistent approach to telecommunications throughout the UK and keeping pipeline rental increases at market value so as not to hold back our oil and gas industry.

Lastly, the draft scheme protects the rights of existing members of staff as they transfer to Crown Estate Scotland (Interim Management). Provisions are in place to cover dismissal, contract variation and pensions. They will ensure that the arrangements for transferred staff will be no less favourable than those that they currently enjoy.

We are now in a position to make this transfer of powers to Scotland smoothly on 1 April 2017. I beg to move.

[The Earl of Kinnoull (CB)]

My Lords, I thank the Minister for her usual eloquence in explaining the transfer scheme. However, I ask her for help on a number of matters in relation to the scheme. I should say that I am not in any way wanting to object to the devolution contained in the Scotland Act 2016, of which this forms a part and which was the statutory embodiment of the Smith commission agreement of November 2014. I emphatically feel, however, that where these precious assets are concerned, we must be very careful to go no further than the Smith commission agreement, especially in relation to their status.

The framework document between the Treasury and the Crown Estate puts the status of these assets well. It is,

“a trust estate, independent of government and the Monarch”.

These assets are not therefore available for political uses. The first issue I will ask the Minister about is that of the onwards devolution which she spoke about a moment ago. Paragraph 33 of the Smith commission agreement saw this onward devolution going to named local authorities and to other authorities that ask. We debated this at length. As the Minister pointed out, the noble Lord, Lord Dunlop, made a ministerial undertaking in respect of the report six months after the transfer. In making the commitment, he also said that the UK Government would continue to press the Scottish Government on this issue. Can the Minister can update us on what progress has been made on that issue?

The Crown Estate is governed by the Crown Estate Act 1961, which sets out the duties and powers of the Crown Estate Commissioners and the general environment under which the assets are held. In her remarks, the Minister went some way towards this, but can she confirm that these provisions remain fully in force, now and in the future, over the Scottish assets that are transferring and the only real change is in the people and institutions who will be involved in the management of those assets?

The Treasury and the Crown Estate have a framework document, which I have already referred to. It is four pages of common sense in plain English. It contains two further important phrases:

“The Crown Estate ... is not an instrument of government policy”,


and, when referring to ministerial direction:

“A direction may be given only within The Crown Estate’s statutory duties”.


Can the Minister tell us whether a similar framework document is ready for 1 April in Scotland, given its importance in underlining the independence of the Crown Estate commissioners and providing clarity?

Lastly, I turn to the Scottish Government’s Crown Estate consultation document. The noble Baroness referred to the consultation, which started in January and finishes on 29 March. The document is 70 pages and contains, early on, a “Way forward” statement which says:

“The Scottish Ministers intend to introduce legislation which puts in place a new legislative framework for management of Crown Estate assets in Scotland”—


then, the part I emphasise—

“that ensures … alignment with Scottish policy objectives”.

Later on, it says:

“After the transfer, the Scottish Parliament will have the power to legislate on the new framework for managing Crown Estate assets in Scotland”.


Then there is the part that I would emphasise:

“This will include the ability to depart from the Crown Estate Act 1961”.


Could the Minister comment on those two assertions as well?

--- Later in debate ---

[Baroness Neville-Rolfe]

I am grateful to so many noble Lords for taking an interest in this important order. Again, I apologise for not being able to answer every question due to the difficulties that our officials have had getting into our House, which I fear may be a problem for a day or two.

I think there is general agreement on the usefulness and timeliness of this order, which follows on from the Smith report and many hours of constructive debate in this House. It was good to hear the noble and learned Lord, Lord Wallace of Tankerness, express his general satisfaction. I will agree to check on the latest position relating to the conversations that my noble friend Lord Dunlop has had with the Scottish Government, and write to noble Lords with an interest.

The noble Lord, Lord Adonis, has asked me quite a detailed question about exactly how finances work. I would prefer to take advice and write to him with a proper answer on that.

[Lord Campbell-Savours (Lab)]

To all of us.

[Baroness Neville-Rolfe]

To all noble Lords, of course.

[Lord Adonis]

The Minister says my question was detailed, but in fact is it not a quite fundamental one? One-quarter of the profits of the Crown Estate in England are going to fund the monarchy. Under this arrangement, are one-quarter of the profits of the Crown Estate in Scotland going to fund the monarchy or not? If not, is the inference to be drawn that it is only the English who will be funding the monarchy henceforth?

[Baroness Neville-Rolfe]

In the absence of expert advice, I would rather write to the noble Lord and engage if the need arises.

[Lord Adonis]

I am very sorry to detain the House but, given how important a point of principle this is, if the House is not even aware of what the situation is, is it reasonable for us to agree to the order today with no knowledge at all of how the funding of the monarchy is going to continue henceforth?

[Baroness Neville-Rolfe]

If I may, I will answer the other questions that have been raised, and we will see if we can get an answer for the noble Lord.

The noble Earl, Lord Kinnoull, asked a number of questions following on from the debates in this House at an earlier stage. Devolution, as he knows and as I have said already, is a matter for the Scottish Parliament to determine. The Scottish Government are currently consulting on the long-term management arrangements.

On the question of whether Scottish Ministers will adopt the Treasury Crown Estate framework, particularly regarding the independence of the Crown Estate commissioners, Scottish Ministers will make their own arrangements for the oversight of Crown Estate Scotland interim management, consistent with the Scotland Act and the Smith commission agreement. The Crown Estate commissioners will not be involved in the management of Scottish assets once they are transferred. This will have no impact on the independence of the Crown Estate commissioners, who will continue to manage Crown Estate assets in the rest of the UK.

The Scotland Act 2016 will enable the Scottish Parliament to legislate for the management of Scottish assets. Section 1 of the Crown Estate Act will not apply since this makes provision for the giving of directions by UK government Ministers to the Crown Estate commissioners. Scottish Ministers are currently consulting on the long-term management arrangements, as I have already said. On the management of assets, the ownership will remain with the Crown.

To respond to the noble Lord, Lord Adonis, we will ensure fiscal neutrality by making a block grant adjustment, ensuring that the Scots do not profit from the transfer.

Finally, the noble Lord, Lord Davies, asked me about the process for resolving disputes between the UK and Scottish Governments and how independent experts will be chosen. In the current draft of the scheme, we have ensured that dispute resolution processes will be carried out by an independent person. Where there is a dispute about market value, an appropriate independent person with specialist expertise will be appointed by agreement between the interested parties, or between Treasury and Scottish Government Ministers, as the case may be, and in the event that agreement cannot be reached, the Royal Institute of Chartered Surveyors can be asked to nominate an appropriate person instead.

This is an important transfer of powers to the devolved Administrations. We want the administration to be seamless and to take effect, as I said, from 1 April.

[The Earl of Kinnoull]

I am not sure I have quite had an answer on the simple issue of whether the assets can now become political footballs: whether the Crown Estate Act absolutely applies, or whether the Scottish Government can depart from the Act or order the managers of the Crown Estate assets in Scotland to ensure alignment with Scottish policy objectives. Those are critical points—certainly for me.

[Baroness Neville-Rolfe]

Those points were considered. The order before us today reflects what was agreed during the passage of the Bill. We have consulted and come forward with these arrangements. I have reassured the House that the Scottish block grant will be adjusted to take them into account, so the Scottish Government will not be getting extra funding from the UK and Scottish taxpayers will continue to contribute to the sovereign grant. It is paid out of the Consolidated Fund, to which all taxpayers contribute and is calculated with reference to the Crown Estate revenue, but not paid directly out of it.

Motion agreed.

Budget: Saving for Retirement

Baroness Neville-Rolfe Excerpts

Thursday 16th March 2017 Lords Chamber

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

My Lords, the Budget has supported people saving for retirement through setting a market-leading rate for the NS&I investment bond. More broadly, the Government continue to support people to save through automatic enrolment into workplace pensions. This will lead to 10 million people newly saving or saving more by 2018.

[Baroness Greengross (CB)]

I thank the noble Baroness for that response but could she explain to the House how the ordinary person—we are given to understand that the Prime Minister is committed to protecting such people—can possibly plan for the future given changes such as those just announced to dividends, together with the introduction of lifetime ISAs, primarily designed to assist younger people in house purchase but which could undermine saving? How, with an ageing population and an ultra-low savings ratio, can we make sure of the vital necessity of younger generations saving for the future? What is the Government’s plan to improve savings for much longer later life, which people on the whole do not even realise that they will experience?

[Baroness Neville-Rolfe]

I thank the noble Baroness for that and for all she does in this important area. I think we have a clear sense of direction and a plan to restructure our finances and to invest in the future. Of course, all taxes and reliefs are kept under review through the annual Budget process. Our priority has been to increase the personal allowance, which benefits everyone. The lifetime ISA, which comes into operation very shortly, complements automatic enrolment, which will help people to save so much more. All these changes will help people. I know that the changes to automatic enrolment are expected to generate an estimated £17 billion a year more in total workplace pensions saving by 2019-20. I know noble Lords here were involved in that. It will make a lot of difference. Obviously, we have longer-term problems but the sense of direction is important.

[Lord Davies of Oldham (Lab)]

My Lords, the Minister is fiddling when, for so many people, Rome is burning. How are the just-managing meant to cope with a situation where there has not been a pay increase for the duration of this Government—a situation unparalleled since 1800? That is the crisis facing our people at present. It is therefore not surprising that unsecured household debt rose dramatically last year. No wonder the savings ratio fell last year from 2% to -0.03%. How can people save when living standards decline for the many—while, of course, lavish wage increases occur for the few, buttressed by a taxation policy that favours them?

[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.

[Lord Flight (Con)]

My Lords, while ISAs have their place, does the Minister not agree that pension schemes are the more attractive—and, tax-wise, the more generous—vehicles for people to save for their retirement? Does she also agree that many people have perhaps been mistaken in cashing in their pensions and incurring tax liabilities, when it would have been better for them to leave them to accrue for the ultimate stage of retirement?

[Baroness Neville-Rolfe]

I agree with my noble friend. The Government are at pains to make sure that our communications draw attention to the value of pensions on automatic enrolment, because of course the employer makes a contribution as well as the employee, and this has been a very important reform. However, ISAs, which now have an allowance of £20,000 from next month, and the lifetime ISA, which is particularly helpful to younger people and the self-employed, also have a place. We want to encourage people to save and I am glad that we are doing so.

Budget Statement

Baroness Neville-Rolfe Excerpts

Tuesday 14th March 2017 Lords Chamber

Moved by

[Baroness Neville-Rolfe]

That this House takes note of the economy in the light of the Budget Statement.

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

My Lords, it is a privilege to present the 2017 Budget to the House. As your Lordships will be aware, this will be the last spring Budget before we move to an autumn timetable. It is also the first Budget since the referendum and our historic vote to leave the European Union. We want to provide as much certainty as possible and therefore it is only right that we take a cautious approach in our stewardship of the economy. Further, despite the Government’s success in bringing down the deficit by two-thirds, it is still too high at 3.8% of GDP last year. These are two major reasons for prudence.

Accordingly, this Budget is designed to strengthen our financial position still further and prepare the economy for the challenges and opportunities ahead. It invests in making the UK more productive—the best way to raise living standards in the long term—and in the quality public services that we depend on. In short, it gets us ready to make the most of the opportunities ahead by laying the foundations for a stronger, fairer, better Britain outside the EU and to create a truly global Britain to compete internationally.

It is fair to say that in March 2017 we are in a better position economically than many predicted. Growth in the second half of 2016 was stronger than the OBR had anticipated in the Autumn Statement. In fact, last year the UK grew faster than most other advanced major economies, while employment remains at a record high. That is very welcome, but the OBR continues to judge that in the medium term, growth will slow due to weaker growth in consumer demand as a consequence of a rise in inflation. Business investment is also expected to remain subdued as we begin the period of negotiation with our EU friends and partners. The OBR is, however, forecasting that net trade will make a positive contribution to growth, as the recent sterling depreciation supports exports.

As I have said, the deficit remains too high, and a range of factors in the global economy present potential risks. So it is right that we get ourselves in a position of readiness to handle difficulties of any kind which come our way. Accordingly, putting the public finances in good order will remain vital for the foreseeable future. Our fiscal rules to do so strike the right balance between reducing the deficit, maintaining flexibility and investing for the long term. The OBR predicts that we will continue to make good progress, with borrowing forecast to fall to a two-decade low of 0.7% of GDP by 2021-22. As a consequence, we are within sight of bringing to a halt the increase in the national debt as a proportion of GDP. Debt is forecast to peak at 88.8 % of GDP in 2017-18 and then to fall in subsequent years. So we are on track to bring the public finances under control.

I want to address the calls that we continue to hear for a spending splurge. It is true that the OBR has forecast £16.4 billion lower borrowing in 2016-17 than it did at the Autumn Statement, but with the national debt nearing 90% of GDP, and while we spend £50 billion on debt interest every year, this would be unwise. Also, the reduction in predicted borrowing owes much to one-off factors unlikely to be repeated. So we must maintain the momentum of reducing borrowing, and getting debt down. Hence a responsible and balanced Budget of targeted spending, with modest increases in revenue, which more or less cancel each other out.

I turn now to the proposed revenue-raising measures. It has been wisely said that:

“To tax and to please … is not given to man”.


If we want evidence for the truth of this quotation we need look no further than the reaction to this Budget. Taxation is a serious matter. Our principles are that the tax base must be sustainable and fair. That is the only way we can continue to sustain public services. So it was with those principles in mind that we proposed changes to national insurance contributions and to the dividend allowance.

I start with the proposal which has attracted the most widespread comment, that on national insurance. This is about creating a fairer and more sustainable system, and 60% of self-employed people affected—those on the lowest incomes—will actually gain from our reforms by an average of £115 a year. We will also explore the rights and protections for self-employed workers, including on issues like parental rights and maternity pay. Legislation will not be brought forward until the autumn, as the Prime Minister has said.

It is also a fact that within the current system, the self-employed, who represent 15% of the British workforce, pay a much lower rate. There are historical reasons for this, reflecting the difference in contributory benefits received, but it is telling that the number of self-employed has increased markedly in recent years. Some—I would say not all—of these newly self-employed are motivated by the tax advantages. With that trend set to continue, it is simply not a sustainable way to fund the benefits self-employed people receive, which now, importantly, include the same access to the state pension. Lower rates paid by the self-employed—some of whom are on very high incomes—are forecast to cost our public finances over £5 billion this year alone.

We have also reduced the dividend allowance from £5,000 to £2,000 from April 2018. This reduces the incentives for individuals to work through a company. The OBR has estimated that increases in incorporations would cost the Exchequer an extra £3.5 billion a year by 2021-22. This measure also ensures support for investors is more effectively targeted.

All can benefit from the increased personal allowance, for example, which rises to £11,500 this April. Investors will also benefit from the ISA allowance of £20,000 per annum from 2017-18. General investors, typically only those with a share portfolio outside an ISA worth at least £50,000, will pay more tax as a result of this change. Over 80% of general investors will continue to pay no tax on their dividends.

I now turn to business rates, where we have recognised that for some businesses the 2017 revaluation meant a large change in bills. While the revaluation is itself, by law, fiscally neutral, last year the Government set out £3.6 billion of transitional relief to support businesses with rising bills, capping the increases that businesses could face each year. We have committed to a package of cuts to business rates now worth nearly £9 billion, with 600,000 small businesses taken out of paying rates altogether. And at the Budget, my right honourable friend the Chancellor announced a further £435 million of support for businesses facing the steepest increases in bills, including help for small businesses losing small business rates relief and funding for local authorities to support discretionary relief.

Overall, the changes we have made to the tax system, especially for business, should be seen in the context of the competitive tax environment we have already put in place on corporation tax, capital gains tax and the R&D tax credit regime.

The revenue raised by tax measures in the Budget has enabled the Government to invest more in the public services that people care most about. One of the most significant commitments was on social care and health, where we have taken action to deal with short-term pressures as well as looking to the longer term. We have allocated an extra £2 billion to councils, which will reduce pressures on the NHS and help them provide more social care to people in their communities over the next three years, of which £1 billion will be made immediately available. It is agreed that we face growing pressures for the longer term as populations become older and the costs of complex medical treatments rise.

Noble Lords may recall that the OBR’s Fiscal Sustainability Report in January predicted that without mitigating action, the percentage of GDP spent on social care would double in the next 50 years. We will publish a Green Paper setting out our proposals for dealing with this challenge later in the year, and I believe that this House will play a valuable ongoing role in considering this issue over the longer term. We are also putting an extra £425 million into the NHS for complementary measures to help assess and manage patients waiting in accident and emergency, and to enable local NHS organisations which already have good plans for long-term reform to put those plans into action.

As a nation, we face a major challenge on productivity. It is well established that we lag behind the G7 average by 18%, and we are even more behind leaders such as Germany. Noble Lords who know me know that this issue has exercised me since my very first day in this House. To meet this problem in the Autumn Statement, we announced a new national productivity investment fund, worth over an extra £23 billion and targeted at areas critical to boosting the UK’s long-run productivity, including housing, research and development, and economic infrastructure.

The Budget included further details on how we will use the new fund to make a real difference, improving the UK’s physical infrastructure and keeping up as a leader in global technological progress. I cannot be comprehensive today but examples are the £690 million competitive fund for local authorities in England to unclog the congestion that blocks our urban road networks, and the £113 million to address traffic pinch-points on our roads in the north and the Midlands. Both those measures will help to boost productivity quite quickly. A third example is the £200 million to speed up the rollout of full-fibre broadband and a new 5G mobile technology hub. I am passionate about Britain becoming yet more successful as a digital society. Important allocations were also made to keep Britain at the forefront of global science and innovation, including funding for 1,000 new PhD places.

That brings me to my final point: the importance of investing in people. I know from experience that it is the combination of capital and skills that can transform productivity. Here, perhaps the most important announcement concerned the new T-levels, which will give our students a much clearer system of qualifications and a much more enticing route into skilled careers.

It has long been recognised that our vocational education has been comparatively weak, especially compared with that in countries such as Germany, where I worked as a non-executive director, or Switzerland. It is hoped that the new routes, taken with other measures such as apprenticeships, will finally put us on the right track. We are also helping more people to take their technical skills to the next level, offering maintenance loans to those studying at our prestigious institutes of technology or national colleges, such as the new colleges for nuclear and for high-speed rail. This means that such students can get the same kind of support with their costs that university students can access through student loans.

We have also built on the far-reaching improvements we have made to our schools—improvements that have seen 1.8 million more children in good or outstanding schools than just six years earlier. We are putting an additional £216 million into our existing schools and funding an extra 110 new free schools, which will mean ever more choice for people in finding a good school place for their children or grandchildren.

This is not a large or a flashy Budget but it contains sensible, realistic measures aimed carefully and proportionately at the problems we face. I beg to move.

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, this has been a wide-ranging debate. I do not think that I will mourn the spring Budget; my noble friend Lady Wheatcroft said that she would not do so either. This is the last spring Budget and the last Lenten Budget, as the right reverend Prelate the Bishop of Chester reminded us. That I will not mourn it is perhaps surprising because I endorse what the noble Baroness, Lady Kramer, said—it has been a fascinating debate today. As the new Commercial Secretary to the Treasury, I have certainly learned a great deal.

We had a major debate yesterday, and indeed on previous days, on Brexit. I think that we can feel the influence of that debate here today. As has been said, this Budget must provide a strong and stable platform for the upcoming exit negotiations. As the Chancellor has made clear, we must be prepared for short-term economic shocks, so prudence with the public finances is even more called for than usual.

I can agree that in the negotiations with the EU we should avoid a disruptive cliff edge, which would be to no one’s advantage. We will work hard to get the best deal for the UK. We want the greatest possible access to the single market and the minimum possible disruption for business, so we will provide as much certainty as we can. We want the change from being an EU member to our new partnership to be as smooth and orderly as possible. We believe that a phased process of implementation would be strongly in the interests of both the UK and the EU, and it will allow businesses to plan and prepare.

The vote last June to leave the EU was a vote for change—to make Britain stronger and fairer. Although it was a vote to leave the EU, I emphasise that it was not a vote to leave Europe. We want to continue to be reliable partners, willing allies and close friends with European countries.

In these circumstances, we have adopted a prudent approach and given ourselves significant headroom in the public finances—£26 billion—to provide the flexibility to deal with shocks, given the wider global uncertainties, while supporting a fiscal plan to reduce the structural deficit to below 2% of GDP this Parliament. My noble friend Lord Gadhia rightly supported this contingency.

My noble friend Lord Crickhowell and the noble Lord, Lord Monks, talked about Scottish independence. As I see it, Scotland voted decisively to remain part of our United Kingdom in a referendum which the Scottish Government defined as a once-in-a-generation vote. The evidence clearly shows that a majority of people in Scotland do not want a second independence referendum. The Scottish Government should focus on delivering good government and public services for the people of Scotland.

I should add that within the EU we have always been the strongest advocate for free trade. As the noble Lord, Lord Bilimoria, said, we need to continue to invest in exports. He will be glad to know that I shall be speaking at the UK India Business Council this week. As he knows, we will continue to attract the brightest and the best to work or study in the UK, but there must be control. I can confirm that agreement on the future of EU nationals is an early priority for the Brexit negotiations.

In response to the points on customs and tariffs made by the noble Lords, Lord Razzall and Lord Wrigglesworth, I say that we want Britain to have the most frictionless and seamless trading arrangement possible with our European neighbours. We have no preconceived notions about the way in which we can achieve this but what matters is the end, not the means. This whole area is a key priority for my Treasury colleagues. I reassure noble Lords that we are working very hard on this and indeed with the industries that could be affected.

I respond to the noble Lord, Lord Monks, by saying that being out of the EU but a member of the single market would, to all intents and purposes, mean not leaving the EU. However, as I said, we want the greatest possible access to the single market.

The noble Lords, Lord Livermore, Lord Shipley, Lord Hain and Lord Palumbo, talked about our debt and our deficit, and there has been an interesting exchange on this subject. We have made progress in reducing the deficit from 9.9% of GDP in 2009-10 to 3.8% in 2015-16. Government spending as a share of GDP reduced from 44.9% to 40%. To reply to the noble Lord, Lord Bilimoria, I tell him that total government spending is forecast to fall to 37.9% of GDP in 2021-22. Returning the public finances to balance is the most reliable way of getting debt to fall and reducing our debt interest payments.

We have made real progress on reducing our deficit—it is down by two-thirds. This safeguards our economy for the longer term and keeps mortgage rates low. However, Labour left the UK with the deficit at a post-war high, at 9.9% of GDP in 2010, and—in response to the noble Lord, Lord Davies of Oldham—that is why we had to have austerity. The OBR now forecasts that the Government will reduce the deficit by almost three-quarters by 2016-17 at 2.6% of GDP. Therefore, we are making progress, but of course we need our cautious and prudent Budget.

I turn to the need for a fairer Britain. Whatever your background, you should have the opportunity to learn well, to earn well and to live a good life. Many contributions from noble Lords have implicitly supported that point, whether in discussing the challenges of social mobility, raising living standards or combating inequality. This is very much the Government’s objective, and we have taken a range of actions to support working people in their everyday lives. We have introduced the national living wage and will be raising the personal allowance to £12,500 in this Parliament and reducing the universal credit taper. By the end of this Parliament, we will be spending a record amount on childcare support, rising to over £6 billion a year. The statistics show real disposable household income going up. This rose per person in 2015 at its fastest rate in 14 years, reaching its highest ever level, and it is forecast to rise further over this Parliament.

We must also ensure that the tax system is fair. I take the positive points made by my noble friend Lord Lupton, who talked about global taxation. He knows that this Government have led international efforts to address tax avoidance by multinationals through the OECD, and the efforts on BEPS will continue.

Let me tackle head on the charge that changes that we have made to the tax system benefit the wealthiest at the expense of the poorest. The fact is that, as the IFS has stated recently, the highest earners have seen significant tax increases. In fact, the top 1% of taxpayers are expected to pay more than a quarter of all income tax this year.

On NICs, I agree that self-employment is vital to any dynamic economy, but the self-employed are taxed less than employees and the growth in the numbers of self-employed is eroding our tax base. Our proposals are relatively modest and fully justified in terms of fairness. I do not agree with my noble friend Lady Altmann. She said that business was being hit twice. People cannot be hit by the class 4 NICs increase and the dividend allowance cut in respect of the same business. People are affected by the dividend allowance cut if they are working through their own company because they are not paying class 4 NICs—unless of course they have a substantial investment portfolio. I was therefore very grateful to my noble friends Lord Horam and Lord Willetts and the noble Lord, Lord Macpherson, for their support in this matter of NICs. My noble friend Lord Willetts brought the Resolution Foundation’s research to our proceedings, which was very helpful. I also enjoyed the comments of the noble Lord, Lord Macpherson, on the difficulty of raising tax revenue, which I have already discovered in only two months.

My noble friend Lord Flight also warned of the limited scope for increasing taxes and highlighted the value of the self-employed as being vital to enterprise and growth. He is right. They are certainly not all tax dodgers, as I think the noble Lord, Lord Desai, almost began to suggest. My noble friend Lord Crickhowell called for evidence, consultation and continuity, and the changes will be the subject of a Bill that we have said we will introduce in the autumn when associated work has been progressed. We have also cut corporation tax to support businesses. I say to the noble Viscount, Lord Chandos, that this helps the country to be competitive. It has been cut from 28% seven years ago to just 20% today and it will fall to 17% in 2020.

The noble Lord, Lord Lupton, also talked about the benefits of venture capital and business support, of which the British Business Bank, which was mentioned, is part. My noble friends Lord Northbrook and Lord Flight and the noble Baroness, Lady Kramer, will also be glad to hear that we are giving 3.1 million small businesses and landlords an extra year until April 2019 to prepare for keeping digital tax records.

The long-term problem in social care has been widely acknowledged today. Although the Care Quality Commission currently rates about three-quarters of adult social care services as good or outstanding, the system is clearly under pressure, and this in turn puts pressure on the NHS. We have therefore provided extra funding for social care and for the NHS to deal with pressures on A&E. In a rather negative intervention, the noble Lord, Lord McKenzie, supported the extra funding for social care and for skills, as did my noble friends Lord Porter and Lord Horam.

But beyond managing short-term challenges, we are also looking to the longer term. We will set out our proposals for putting the social care system on a more secure and sustainable long-term footing in a Green Paper later this year.

Indeed, long-term planning has been a broader theme of this Budget. For example, we are looking in the medium term at how to find a better way of taxing the digital part of the economy and at how to make our tax system fairer and more certain with a commitment to set out proposals for smoother, more frequent revaluations for business rates in the autumn. I am sure that the noble Earl, Lord Lytton, will be glad to hear that, given the debates that he and I have had on rates on previous occasions.

One of the most important challenges for our long-term economic advance is improving productivity. It is the tide that lifts all ships and something on which the noble Lord, Lord Davies, and I seem to be in strong agreement. The Autumn Statement focused on investment in infrastructure and innovation and the new national productivity investment fund. This Budget outlined further details. We have, for example, announced funding for 110 more new free schools. Some will be selective, as has been pointed out. I see no reason to apologise for that.

I should also say a word about technical education, which I talked about at length in my opening speech, and about apprenticeships, which were mentioned by the noble Lord, Lord Haskel. I know from my own experience that these are valuable to businesses and we are working with employers to make them even better. As he said, better skills and training, and better people, will make firms stay in the UK. The apprenticeship levy is a necessary part of delivering 3 million apprenticeships. Crucially, our system puts control of funding into the hands of employees.

I was also asked about school inspections. Ofsted considers how well prepared pupils are for the next stage of their education, training and employment when it inspects schools nowadays. I think that was a concern expressed by the noble Lord, Lord Shipley, who rightly emphasised the importance of housing investment to productivity. We issued a White Paper on 7 February, setting out ambitious, lasting reforms to get more houses built faster. He and the Chamber have debated that with my noble friend Lord Young, who is on the Front Bench now and has given me such good support during this debate. My noble friend Lord Porter will be glad to know that more than 300,000 affordable homes have been delivered since 2010 and that more than double the amount of council housing has been built in the seven years since 2010 than in the 30 years before.

My noble friend Lord Willetts and the noble Lord, Lord Bhattacharyya, added useful suggestions on how we tackle the productivity dilemma, rightly referring to the work now being done by BEIS and by Greg Clark. My noble friend Lord Willetts also drew our attention to the intergenerational unfairness of younger workers having to pay to plug pension schemes. I will certainly look at the DWP consultation that my noble friend mentioned.

My noble friend Lady Altmann shared the benefit of her experience in pensions and social care. I took her point about pensions and insurance assets being possible vehicles for infrastructure and housing investment. The Green Paper on social care that I mentioned will give us an opportunity to look at some possibilities. I hope noble Lords will contribute.

My noble friend Lady Wheatcroft emphasised the importance of management to better productivity. That is certainly true in the retail trade. Sir Charlie Mayfield, whom she mentioned, is helping us with the productivity puzzle. Under his inspiration there was £13 million in the Autumn Statement to support firms to improve management skills. That work needs to cut through in the industrial strategy.

I have a little more time. The noble Lord, Lord Monks, whom I worked with for many years, talked about investment in people and in businesses. We have published a Green Paper on governance inviting views on how to have better engagement with workers in companies, as he will know. The noble Lord, Lord Skidelsky, gave his own personal perspective on productivity, but I was glad that he welcomed the investment in infrastructure that we are now beginning to make.

The noble Baroness, Lady Burt of Solihull, talked about equality. The Government are committed to fairness and the promotion of equality. That is why the old and disabled will benefit from the £2 billion to councils in England for social care services that we have discussed, and the young from investment in schools and skills. As she said, we have provided some very welcome seed funding for women returners. This is an area that I am very keen on too. I know that it can make a substantial difference.

My noble friend Lord Marlesford asked why the Chancellor had not taken any action on fuel duty. The Chancellor is mindful that fuel prices are a major cost-of-living issue for a very large number of drivers. It is an important input for business.

Various other suggestions have been made, from red diesel for council lorries to better uses for the tampon tax, to help for small shops from my noble friend Lord Carrington.

This has been a very good debate and I look forward to reading Hansard with great care. I say to the right reverend Prelate the Bishop of Chester on the NHS that the Government are supporting those geographic areas with strong cases for transforming the way that services are delivered to provide better care for patients and to put the NHS on a more sustainable footing, including investing a relatively small sum of £35 million over the next three years to back the first set of sustainability and transformation plans, which are so important.

To conclude, this is a prudent and fair Budget, with investment in skills, infrastructure and social care and with the longer-term perspective we need for sustained success. It paves the way for a truly global Britain and a country that works for everyone.

Motion agreed.