Economy Update
Debate between Baroness Penn and Baroness Falkner of Margravine
Baroness Penn (Con)
My Lords, the increase in universal credit was always brought forward as a temporary measure as, through the restrictions needed to deal with the Covid pandemic, large parts of our economy were effectively shut down. We face a different set of challenges now. They are severe for many households, but they are to do with inflationary pressures and a large part of that is driven by energy prices, so we are targeting our response towards dealing with that. Under our plans, the lowest-income households will receive around £1,200, which is roughly equivalent to the expected increase in costs for the energy price cap rise. Some people benefited from a UC uprating or temporary uplift, but pensioners who struggle with energy bills did not benefit under that system. People with disabilities, who can face higher energy costs, did not necessarily benefit from that UC uplift. This is a targeted set of measures to deal with a specific set of problems and it should be welcomed.
Baroness Falkner of Margravine (CB)
My Lords, I welcome the support for people with disabilities, but why have the Government taken so long and yet not come to a view or set out the tax on the power generation sector? The peroration from the noble Lord, Lord Sikka, was perhaps overly long, but he made a very important point: one way to deal with the energy price crisis specifically would have been to emulate the French by having a price cap. I accept the point from the noble Baroness, Lady Kramer, that it is not only an energy crisis; nevertheless, that would have been far more targeted and directed.
Baroness Penn (Con)
My Lords, the structure of the French energy market is different from our own. Different interventions are appropriate in different circumstances, but the generosity of the approach we have taken is comparable. On electricity generation, it is more complicated. As I have said, we have taken time to design the levy so as not to deter investment and we are looking very carefully at the scale of the extraordinary returns in the electricity sector and measures that could be taken in response. We have longer-term plans to reform that sector, but there may be a case for doing something in the interim and we are working urgently to look at that.
Inheritance Tax: Cohabiting Siblings
Debate between Baroness Penn and Baroness Falkner of Margravine(3 years, 9 months ago)
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Baroness Penn (Con)
My Lords, the Government understand that individuals work hard to build up their assets to pass on to their families. That is why the nil rate for inheritance tax exists and, as my noble friend has noted, exempts the vast majority of estates from paying inheritance tax. I also note that it makes an important contribution to the funding of public services in this country, equivalent to around 1p on income tax.
Baroness Falkner of Margravine (CB)
My Lords, the Minister tells us that 95% of estates do not pay any inheritance tax. In that case, could she tell us what estimate Her Majesty’s Treasury has done of the infinitesimally small number of people who would come under this situation? Has it done any research? Does it have any evidence to show what the impact on revenue from inheritance tax would be if it were to make this legal change, so that those of us who want to see that change can bring about Private Members’ Bills to so address this issue if it is unwilling to do so?
Baroness Penn (Con)
My Lords, the Government are of course aware of my noble friend’s previous Private Member’s Bill on this subject. The question is not just one of cost; it is about legal relationships between individuals. Married couples and couples in civil partnerships have a unique legal status and it is difficult to see why cohabiting siblings should benefit where other cohabiting family members, for example, would not.
Covid-19: Levelling-up Agenda
Debate between Baroness Penn and Baroness Falkner of Margravine
Baroness Penn (Con)
My Lords, I do not pay too much attention to rumours circulating, and the Government remain committed to the High Speed 2 project.
Baroness Falkner of Margravine (CB)
What is the noble Baroness’s assessment of the Treasury’s 80:20 rule, which decrees that 80% of funding for Homes England goes to the areas where homes are most unaffordable? This naturally ends up being the south and south-east of England. Will she accept that, when 46 of the red wall seats are only eligible for 20% of the funding for homes, this creates a blatant unfairness for the north? Can she tell the House what Government are doing to resolve this?
Baroness Penn (Con)
I reassure the noble Baroness that funds from the £400 million brownfield fund announced in the Budget will unlock up to 24,000 high-quality homes across the country, with 90% allocated immediately to seven mayoral combined authorities to allow them to begin delivering projects that will benefit local areas.
G20: Debt Cancellation
Debate between Baroness Penn and Baroness Falkner of Margravine
Baroness Penn
The noble Baroness is right that the scale of the economic crisis facing these countries is significant. The IMF predicts that global GDP will fall by 3% in 2020 and says it is the worst global recession since the great depression and much worse than the 2008 financial crisis. We are providing a huge amount of additional support, including through the IMF, which has doubled to $100 billion the emergency financing support available to its members.
Baroness Falkner of Margravine (Non-Afl) [V]
My Lords, I am second to none in wanting to assist poorer countries, but will the noble Baroness accept, in the context of debt forgiveness, that the World Bank has done recent research to show that aid flows through the poorest countries straight back into the wealthier countries—something called aid leakage? So unless we want to give money to Switzerland, Luxembourg, the Cayman Islands and those sorts of places, the best way to help the poorest countries is through a vaccine, through medical and pharmaceutical products and, most importantly, through the special drawing rights of the IMF mentioned by the noble Baroness, Lady Kramer.
Baroness Penn
The noble Baroness is correct that we need to ensure that the support we give to these countries actually flows into supporting social and health programmes that help to tackle this virus. That is why one of the conditions of the debt service suspension initiative is that the financial headroom it creates for those countries is actually directed towards those services.