Spending Review and Autumn Statement
Baroness Royall of Blaisdon Excerpts(8 years, 5 months ago)
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Lord O’Neill of Gatley
My Lords, my noble friend Lord Tebbit goads me to spend a lot of time talking about the economy, which—looking at the clock and avoiding my own tendency—I will desist from rising to. But I implied in my answer to the noble Lord, Lord Davies, that I was somewhat baffled by his tone about the economy. I suspect that many noble Lords have not yet had the chance to read everything that has been said, particularly by the OBR, but in a number of areas of frequently highlighted vulnerability, particularly the balance of payments, the OBR is somewhat cheerier than is typically the case. As the Chancellor pointed out very clearly at the start of his speech, our economy continues to perform at the highest levels of the G7 economies and somewhat better than generally expected by the consensus over the medium term, including the OBR’s own forecast beyond this year and next year.
Baroness Royall of Blaisdon (Lab)
My Lords, there is much in the Statement about housebuilding and it is very welcome that the Government want to enable more people to buy homes, although I see that few of them will be in London and the south-east. But the only mention of social housing is the enabling power to allow housing associations to sell off their own homes, which will detrimentally affect housing, especially in rural areas. What is the Chancellor saying about building more social housing all over the country?
Lord O’Neill of Gatley
My Lords, I beg to differ with the substance of the question. While the new policies announced today go more broadly than social housing, the Government continue to focus on the needs in this area. What is particularly exciting about housing policy today is a stronger commitment, and specific policies to go with it, to encourage more housebuilding in general, including specific targeted measures to help those in London.
Assisted Dying Bill [HL]
Baroness Royall of Blaisdon Excerpts(9 years, 6 months ago)
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Baroness Howe of Idlicote
My Lords, my Amendment 7 is a very simple one which deals with an issue that might arise as a result of the Bill—what one might call suicide tourism. I am sure that it is common ground between those who support and those who oppose a change in the law that we would not want to see any such law being abused by people from other jurisdictions travelling here to commit suicide. I feel sure that that is what the noble and learned Lord, Lord Falconer, had in mind when he included a requirement in Section 1 that an applicant for assistance with suicide must have been ordinarily resident in England and Wales for not less than one year. I certainly applaud the intention of that provision, but I fear that it does not go far enough.
Let us consider a hypothetical but far from impossible situation of a couple who have lived in England and Wales then retired to the Costa Brava. One of them is diagnosed with a terminal illness and wishes to take advantage of a law along the lines of the one proposed here, so he or she returns to this country and qualifies as having been resident in England and Wales for more than a year, but not for a year immediately preceding the application. And what about Scotland? Returning home from the Costa Brava is one thing; coming south into England is something else. There must be thousands of people who have been ordinarily resident in England and Wales for not less than a year but who, at a time when they may wish to avail themselves of a law along the lines of the noble and learned Lord’s Bill, are living north of the border. Are they to qualify for assistance with suicide, too?
It is a simple matter to guard against such suicide tourism by stipulating that the applicant for assistance with suicide must have been resident in England and Wales for a specified period immediately prior to making the application. I feel sure that that is the intent of the Bill, which should make that clear, as well as the stipulation that the specified period required should be not one but two years.
Baroness Royall of Blaisdon (Lab)
My Lords, I find this procedure extremely confusing. I realise that when a complex amendment is passed which subsumes other amendments it makes life complex, but for future reference, we would be very grateful as a Committee to have clear procedural guidance from the Whips as soon as possible. This has been a very confusing discussion on an extremely important issue.
The Earl of Listowel
My Lords, I will speak to Clause 1, and in particular to the concern about young people aged from 18 to 25. As I stressed before, this is a very small group within the larger group we are discussing, and one has to be very concerned that they get the appropriate healthcare and health professional treatment so that they can make fully informed, proper decisions. It is notorious that the transition from children’s services to adult services often causes issues in the treatment of young people.
Many young people may have some difficulty in fully appreciating their own mortality. While it is easy for us to recognise, it may be more difficult for an 18 or 19 year-old to realise that ending one’s life is absolutely final. Therefore I would appreciate consideration being given to the welfare of that particular group, so that whatever progress is made on the Bill in the future, the welfare needs of 18 to 25 year-olds are taken into very careful consideration.
Barnett Formula
Baroness Royall of Blaisdon Excerpts(9 years, 6 months ago)
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Lord Newby
My Lords, I think that we need to remember that Wales receives greater per capita expenditure support than England; in 2012-13, while in England as a whole the level was just over £6,000, in Wales it was just shy of £7,000.
Baroness Royall of Blaisdon (Lab)
My Lords, my noble friend Lord Barnett was an extraordinary man, as an MP, a Minister, a colleague and a friend to all Benches in this House. He diligently held the Government to account and did his utmost to ensure the best for the people of this country until just a few weeks ago. He believed, as we all do, that government should be a force for making life better for the people of this country. I have just been joined by my noble friend Lord Davies of Oldham, who used to be a PPS for my noble friend Lord Barnett.
Can the Minister confirm that the Government will agree to the all-party request from the Welsh Assembly for bilateral talks between the UK and Welsh Governments on fair funding, and to rapid implementation of a funding floor, which the Welsh Government suggest should be completed by January 2015?
Lord Newby
My Lords, as I said in my initial Answer, we have agreed that we will revisit the arrangements for funding in Wales in advance of each spending review. We will do the next review next year in conjunction with the Welsh Government.
Financial Services (Banking Reform) Bill
Baroness Royall of Blaisdon Excerpts(10 years, 6 months ago)
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Baroness Royall of Blaisdon (Lab)
I support my noble friend Lord McFall of Alcluith and the Motion that he has moved. The vast number of amendments to the Financial Services (Banking Reform) Bill are extremely complex. Clearly, more time is needed to consider the amendments before Report. As my noble friend has pointed out, the banking commission, which includes the most reverend Primate the Archbishop of Canterbury, is joined by the President of the Supreme Court, the noble and learned Lord, Lord Neuberger, and the former Governor of the Bank of England in suggesting that that is the best way forward to delay the Report stage of this Bill until after the Christmas Recess.
The noble Baroness, Lady Anelay, the Chief Whip, said in our exchange of views on Wednesday that the increased length of the Bill was due to the Government responding positively to the recommendations made by the banking commission. Undoubtedly that played a part, but in a Bill of such importance for the future well-being for our financial system, it is critical that noble Lords have a longer opportunity to look at the Bill as a whole to see how the many amendments to the amendments to the amendments, as my noble friend pointed out, work together to provide a clear, cohesive and coherent system. My noble friend is right to point out that good legislation is critical, and the critique of the noble and learned Lord, Lord Neuberger, is salutary in this respect. Bad legislation is often complex legislation. In such situations, it is always the lawyers and accountants who win, and our country’s citizens who lose.
The Deputy Chief Whip is aware that my strong preference for business next Monday is to have debates on non-legislative reports. That seems to be a simple solution to the problem that was not, as I acknowledge, of the Government’s making, but the result of the will of the House in relation to the lobbying Bill. As I have explained to noble Lords and others inside and outside this Chamber, it is not possible to have the Second Reading of the Pensions Bill on 18 November, because the opposition spokespersons are not available. I stress that they are not, as some have suggested, on holiday. They have long-standing commitments that cannot be changed, and I respect their diary commitments.
As my noble friend said, we do have a duty to ensure the necessary transformation of our banking system. This requires longer consideration before the Report stage of the banking Bill. However, I recognise that the House is anxious not only to try to ensure that Report is put off until after Christmas, but also to ensure that all Members of your Lordships’ House who are members of the banking commission can participate at Report, including, of course, the most reverend Primate the Archbishop of Canterbury.
I suggest therefore that, even if it were not possible to delay the commencement of Report until after Christmas, there may be other legislative options that could be discussed in relation to business on Monday. I know that my noble friend Lord Bassam is happy to discuss other suggestions with the Deputy Chief Whip. I trust that this can be taken forward outside this Chamber. I am sure that most noble Lords, although clearly they are not in their place this evening, would be anxious to ensure that all members of the banking commission can participate in the Report stage and that proper consideration can be given by all Members of this House with an interest in this most important issue.
Lord Newby (LD)
My Lords, on the substance of the Motion of the noble Lord, Lord McFall, as the House knows I am one of the Government’s spokespeople on the Bill, as well as being Deputy Chief Whip.
The Government tabled 155 amendments at Committee stage. By my reckoning, 116 of them were to respond to the report of the Parliamentary Commission on Banking Standards and were welcomed by members of the commission. The remainder set up the payments systems regulator, and were equally welcomed across the House. All but one of the amendments were tabled more than a week ahead of the Committee stage debate, and with an open letter of explanation addressed to the participants. I believe that this was a classic example of good practice.
Off the Floor, my noble friend Lord Deighton and I and other Treasury Ministers have had highly constructive and productive discussions with those interested in the Bill, and we continue to do so. Committee stage finished on 23 October. Usual practice would have been to have Report stage start a fortnight later on 6 November; instead, it will be on 18 November. That is a degree of measured consideration.
That is the substance of the matter. I will address two further issues. The first is that of the Chief Whip adjusting our future business in response to events. The Chief Whip had to rearrange our provisional forward business but, as she made clear last week at the Dispatch Box, she did so only because of the pressure in the House to delay Part 2 of the lobbying Bill—a position not initiated by the Government. In order to have a proper pipeline of parliamentary debate and proper progress of government business, it is necessary to have legislative business next week. The Financial Services (Banking Reform) Bill was waiting for Report. It was well beyond the necessary minimum interval between stages, and the Opposition Chief Whip made no alternative proposal. I think the Chief Whip not only did the best she could in the circumstances but acted entirely properly and reasonably.
I cannot but regret that the Motion we find ourselves debating was tabled by the noble Lord, Lord McFall, not only minutes before House up on Friday afternoon, but without first agreeing a slot for the debate with the Chief Whip, or even consulting her. I realise that in theory every Lord has equal access to the Order Paper. Of course they do in theory, but that is not how we work in practice.
Baroness Royall of Blaisdon
My Lords, I should like to respond to two or three points raised by the Deputy Chief Whip. On consultation, I note what he said, but I suggest that it is not the case that there is consultation beforehand every time a Member of this House lays the sort of Motion that my noble friend has. My noble friend Lady Hayter was told of the dates when the Committee stage of the transparency of lobbying Bill would recommence in December. She was not asked when it would be done; she was told. There is room for further consultation on many issues in this House.
In the brief exchange we had on this issue last Wednesday, I concluded my remarks by saying that my door was always open, but nobody has crossed the threshold of my office to try to find alternative legislation that could be taken on Monday. While I note what the Minister is saying—it is his view and that of the Government that we do not need to wait until the new year for the Report stage of the banking Bill—it would be to the benefit of all Members of this House if all members of the banking commission were present for the first day of Report. I hope, therefore, that the noble Lord will be able to take up my suggestion that he have a conversation with my noble friend Lord Bassam following this exchange, to try to find some other legislation that could be taken in this House on Monday so that the banking Bill could start a few days later.
Welsh Government: Comprehensive Spending Review
Baroness Royall of Blaisdon Excerpts(10 years, 10 months ago)
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Lord Newby
That is obviously one factor out of a whole raft of factors relating to the different demographics and needs of the nations and regions of the UK. The elderly population are, of course, protected by the triple lock on pensions. It means that their state pension has done pretty well during this Parliament.
Baroness Royall of Blaisdon
My Lords, does the Minister agree that the impact of the comprehensive spending review on Wales could have been radically different if the £9.6 billion of VAT uncollected over the last period had been collected? Perhaps if HMRC’s spending had not been reduced by 5%, that would have enabled it to collect what was due and Wales could even have had two prisons.
Lord Newby
My Lords, I did not know that the noble Baroness was in favour of such radical spending on prisons. In terms of the tax cap and VAT, the next figures on the tax cap will be coming out in September. HMRC has been very successful during this Parliament in collecting previously uncollected taxes from a range of sources and, as the noble Baroness knows, we have put a lot of additional resources, almost £1 billion, into tackling tax avoidance and evasion.
Business
Baroness Royall of Blaisdon Excerpts(11 years, 3 months ago)
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Lord Newby
My Lords, this is a new procedure, agreed by the Procedure Committee. One way of dealing with the noble Lord’s point is for the Opposition to keep their initial comments and questions brief.
Baroness Royall of Blaisdon
My Lords, perhaps I might intervene following the statement from the Government’s Deputy Chief Whip. Clearly this is a new procedure. It is probably here for a trial period over a short time. Very valid comments have been made on the Floor of the House today. When this matter goes back to the Procedure Committee and then to the House, it is clear that we must take these comments into consideration.
Queen’s Speech
Baroness Royall of Blaisdon Excerpts(12 years ago)
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Baroness Royall of Blaisdon
As an amendment to the motion for a Humble Address, at the end of the Address to insert, “but regret the failure of Your Majesty’s Government properly to address economic recovery, especially promoting growth and jobs, and the issues of general living standards and the one million young people out of work, and deplore the incoherence and the lack of vision of the measures proposed by Your Majesty’s Government for the coming Session of Parliament”.
Baroness Royall of Blaisdon
My Lords, I move the Opposition’s amendment to the Motion on the gracious Speech. We on these Benches do not do so lightly, and we acknowledge that it is a serious step. To do so is not unprecedented, although we recognise that it is unusual. In fact, the last time it was done was back in 1999, in an amendment against the overall thrust of the policy of the then-Labour Government. The mover of that amendment was none other than the noble Lord, Lord Strathclyde, so we are completely confident that the government Benches will strongly support our right to argue for this amendment today.
Our reason for tabling the amendment is straightforward. We believe that the Government are putting the wrong priorities first because the Government are putting the wrong people first: tax cuts for the rich, but hard-working families being asked to pay more; nurses being laid off, but an expensive and wasteful NHS reorganisation; and police numbers being cut back—indeed, as the police themselves say, 20% cuts are criminal—but nothing being done to tackle crime. There is no legislation, as was promised, on ASBOs. Rather than concentrating on Lords reform, the Government should be concentrating on jobs, on growth, on living standards and on youth unemployment.
Let us consider the economic state of the nation. The economy is in a double-dip recession with no end in sight. Indeed, the latest dismal figures for the building industry suggest that the estimate of national GDP growth of minus 0.2% in the first quarter was overly optimistic, an underestimate of the true scale of economic decline. The UK, as a direct result of this Government’s policies, is set to endure a longer depression than the country suffered in the 1930s. Just today, the Bank of England has cut its growth forecast for this year from 1.2 per cent to 0.8 per cent, and warned that the UK would not be unscathed by the storm which is still convulsing the eurozone. That is precisely why we should be part of, and influencing, the debate rather than standing in isolation. But it is still this Government, not events beyond our shores, who are responsible for the double-dip recession in which we are mired.
What is there in the Queen’s Speech that will do anything to kick-start the economy back into growth? Of course there will be Bills on competition policy and on banking, and on a green investment bank, as the noble Baroness, Lady Wilcox, said, but I would be grateful if in her reply, the Minister would confirm that the banking Bill is not going to be a carryover Bill, as we had understood.
These may be worthwhile measures. We certainly hope that they will be, but any effect that they have on economic performance will be in the medium to long term. They will make no discernible impact over the next few, crucial, years. The noble Baroness mentioned a Bill to reduce burdens on business by repealing unnecessary legislation. Well, we are all against “unnecessary legislation”, though it seems to me that we have encountered a lot of seriously unnecessary legislation recently—for example, on the National Health Service, something that produced a plethora of quangos. But I leave the verdict on these proposals to none other than the leader writer of that organ of radical thought, the Daily Mail:
“The promised bonfire of the quangos and red tape has been pathetic, with last week’s Queen’s Speech paying only lip service to deregulation”.
I do not think that the Government really understand. They do not seem to understand that it is their policies that have mired the economy in recession and that, without a change of course, without active intervention now, the prospects for a return even to the levels of output seen in 2008 are bleak. The coalition appears to be in recession denial. There is no hope and the people of our country are desperate for vision, hope and opportunity. But the Government lack any vision of how Britain might return to prosperity.
Lord Roberts of Conwy
Would the noble Baroness give way? I am very surprised that she does not give a hearty welcome to the increase of 105,000 in employment and the decline of 45,000 in the unemployed that were announced today, facts that were welcomed by the Leader of the Opposition at Prime Minister’s Questions.
Baroness Royall of Blaisdon
If the noble Lord will give me a few minutes, I will get to the part where I do indeed welcome what has happened today with the unemployment figures. However, I will of course qualify that.
The oft-stated primary objectives of government policy to maintain sterling as a safe-haven currency by protecting at all costs Britain’s triple-A rating with the ratings agencies, and keeping interest rates low to stimulate investment, is interesting and important. However, the strengthening of sterling poses a threat to the recovery of industrial exports from Britain and, in the absence of any prospect of growing demand, low interest rates have been accompanied by a collapse in investment.
Put simply, the Government’s economic policies are incoherent. Consider the fact that almost 90% of the planned cuts in government expenditure are still to come, creating a headwind loss of 6% of GDP before growth can get going again, and the overall damage that their policies are doing to our growth prospects are all too evident. Even the ratings agencies are now beginning to wonder whether the UK’s rating should be downgraded because of the lack of growth.
Moreover, the human consequences of the Government’s economic policies are all too evident. As I said, I welcome the fact that unemployment fell today, but I note too that the number of people unemployed for more than a year—that is, under the definitions used, the long-term unemployed—rose by 27,000 to 887,000, the worst total since 1996, when the Conservative Party was last in power. It is the Government’s policies that have led directly to higher unemployment so that people lose their dignity and purpose and may have to claim benefits rather than working and thus helping to create economic growth and deficit reduction.
The number of people working part-time who say that they want a full-time job is at a record high, but of course the Government do not seem to care. A Downing Street source was quoted yesterday as asking why people only work part-time—more evidence of this Government being out of touch. They briefed the newspapers ahead of the Queen’s Speech about the family-friendly policies within it, yet do not understand that people may need to work part-time because they have childcare or other caring responsibilities, let alone that sometimes part-time jobs are the only jobs available.
The effect of the Government’s policies has been especially wounding for young people. Even after today’s figures, more than one in five young people are unemployed—over 1 million in all. Just when they should be starting out on their careers, perhaps thinking of settling down and building a family, they are left idle, untrained, demotivated, and devastated. As my noble friend Lady Hughes of Stretford spelt out so well yesterday, this coalition’s policies are creating a wasted generation that should weigh on the conscience of every single member of this Government. The Queen’s Speech contains nothing that addresses the problem of the unemployed young. The country as a whole will suffer from this neglect for years to come.
Of course, the assault on the poor continues. The Institute for Fiscal Studies has shown that government measures introduced this April will have a disproportionate effect on the lower half of income distribution, with the biggest hits being suffered by households with children, and there is more to come. Only 12% of the proposed cuts have so far been implemented and we are told that, on the advice of his strategy adviser before he leaves the sinking ship and heads off to California today, the Prime Minister is considering a further £25 billion in welfare cuts. The much vaunted Budget increase in the personal allowance, which the coalition partners pretend help the worse off, is also systematically biased against the poor: 70% of the benefit will go to those in the top half of income distribution.
All this, and yet there is nothing concrete in the Queen’s Speech to address the pressing needs of so many people in our country—and there is worse to come. In its report to accompany the Budget Statement, the Office for Budget Responsibility tells us that the coalition recession is not just resulting in lost income, lost jobs and blighted lives today, but is blighting Britain’s future, too.
The OBR could not be clearer,
“our estimates of potential growth do imply a significant and persistent loss of potential output relative to the pre-crisis trend … Our … estimates for 2011 imply a potential output loss of around 8 per cent … This shortfall widens to around 11 per cent by 2016”.
That is terrifying. It is because the sharp fall in investment since the coalition took power bequeaths the country crumbling infrastructure and underskilled workers. Yet there is nothing in the gracious Speech that would stimulate infrastructure investment or enhance the skills base.
However, I must admit that since the Queen’s Speech the Government have launched a new economic policy to tackle Britain’s economic problems. The noble Baroness mentioned her right honourable friend Mr William Hague, the Foreign Secretary. A few days ago, he declared:
“There’s only one growth strategy: work hard”.
Then Mr Eric Pickles, the Secretary of State for Communities, chimed in, saying:
“I think we all should work harder”.
So the youngster desperately searching for a job, who has sent of dozens of applications without success, sometimes without an answer or an acknowledgement, is told to work harder. To the thousands put on short time, the message is work harder. To the family struggling in the face of cuts in working tax credits, the message is clear: work harder. To the small business owner, unable to renew his or her bank funding, and seeing the prospect of securing future orders vanish, the message is work harder. To the building contractors facing 5% falls in demand, and retailers facing a shrinking high street, the message is stop whingeing and work harder. As Mr Hague put it so precisely,
“do more with less—that’s the 21st century”.
Well, the coalition is certainly guaranteeing that we will have less. It is not as if the Government are even willing to debate how new measures might boost demand in the economy. What is the Government’s response to UK manufacturers who want more support, including the creation of an industrial bank? Why was there nothing in the Queen’s Speech about infrastructure? Why no HS2 Bill? Why, for example, is there no debate over creating a national infrastructure bank? If Britain can afford to lend £10 billion to the IMF, then it can afford to lend £10 billion to a national infrastructure bank to attack directly the decline in productive potential that the austerity policies have produced. The Chancellor of the Exchequer said the IMF loan would come from the UK’s reserves, that it was not money that would otherwise have been available for public spending and that it would not add to the national debt. So let us perform that trick again, but this time at home. Why is there no debate over the American idea that austerity policies—cuts in spending or increases in taxes—should be contingent on the economy reaching predefined goals in terms of growth and/or employment? Legislation would commit the Government to cutting the deficit when the growth target had been hit, but the Government will not even consider the possibility.
The Government make the claim that they inherited a difficult economic situation. Well, they entered office two years ago in the face of a major world financial crisis, a crisis that had a particularly damaging effect on the UK because of the disproportionate importance of the financial services industry in our economy, as the noble Baroness said. However, she did not add that they inherited an economy on the path to recovery, growing at 2% a year, with a deficit plan in place that would have halved the deficit in four years, the target agreed by the G20 nations. It is their policies that have forced the economy back into recession. Two years on, they have no excuses. Their austerity policies have failed and should be abandoned, and they must also abandon the assault on the poor, the NHS and legal aid which they disguise as necessary pain.
It is not just us on these Benches or my party generally that makes this criticism. Even the most measured and careful of professions, the accountants, are making the same points. The Institute of Chartered Accountants for England and Wales was quoted yesterday as saying that the Government’s child benefit tax is seriously badly engineered. Another accountant said that nuking large-scale philanthropy at a time when the demands of charities are rising steeply does not make sense. That is no doubt why the Queen’s Speech includes a panic provision to reverse the Budget’s impact on charities.
The day after Her Majesty delivered the gracious Speech, the Daily Telegraph headline read:
“Queen’s Speech: why was there no plan for growth?”.
Around the world we see policy makers struggling to develop new ideas to escape austerity and resuscitate growth, the growth that everyone other than the recession deniers in this country knows is the only way to restore the public finances. The only Government not participating in this debate is this one. Their policies lack vision, they lack coherence, and they fail to address the pressing problems of the creating growth and jobs in this country.
The Queen’s Speech illustrates that in just two years their policies are not working and they have no idea what to do next. That is why we have tabled this amendment, to focus attention on what the Government are doing—pursuing policies that are not working and making cuts that go too far, too fast. We wish to focus attention on what the Government should be doing—that is, pursuing policies to promote jobs and growth, improve living standards and cut youth unemployment.
This Government are out of touch. Even elected Conservatives are coming to this conclusion. In Stroud, in my glorious county of Gloucestershire, the Conservative chairman of Stroud District Council, Councillor John Hudson, has recently resigned from the Conservative group, and indeed the Conservative Party, over the effect of the Government’s policies. He said:
“I’m a family man with three very young children, just trying to keep a roof over their heads, food on the table. To be brutally honest, and it sounds a bit socialist and I’m no socialist, the people who run the Government have no idea how the ordinary working man is coping”.
He is right. The Government are out of touch, incompetent and unfair. The elections show that, the polls show that and I look forward to this House showing that today. I also look forward to the maiden speeches of the right reverend Prelate the Bishop of Durham and the noble Lord, Lord Ashton of Hyde. I beg to move.
Baroness Royall of Blaisdon
My Lords, we have had an excellent and full debate this evening on a wide range of issues. I am very glad that my Benches tabled the amendment that we did so that we could focus the attention of the debate on what we believe should have been in the Queen’s Speech.
I am very disappointed in the Minister’s reply, as, when he dealt with economic policy, he merely repeated the mantra that he has repeated so many times from that Dispatch Box: that the crisis is all the fault of the Labour Government. However, it is not all the fault of the Labour Government. Yes, when the noble Lord and his colleagues entered government, it was a very difficult time and we were in the middle of a deep financial crisis. However, it was a global financial crisis. In fact, the coalition inherited an economy that was on the path to recovery. It was growing at 2 per cent a year with a deficit plan in place that would have halved the deficit in four years. Instead of that we have unemployment, so the unemployed are not paying their taxes, there is no growth in the economy and the deficit is getting bigger. We now have a double-dip recession and the Minister and his colleagues blame it all on the eurozone. It is strange that they blame the current crisis on the eurozone. However, when they came into government, they said that the problem did not result from the global financial crisis but was our fault. That is all very strange.
I have to take issue with the Minister when he says that high-quality public services are among the big successes of this Government. The postcode lottery in social care is getting worse. Youth services up and down the country have been decimated. Libraries have been closed. School buildings are falling into disrepair and waiting lists are growing. The responsibilities of the state are being rolled back and the burdens are being placed on charities, which want to cope but are finding it more and more difficult to do so because they have so much on their shoulders. Therefore, I think it is a bit rich for the Minister to say that that is a priority.
The Minister also says that this Government will not cut the UK adrift. I am glad if the level of exports is getting better in some areas, and, as the noble Baroness, Lady O’Cathain, asked me to do, I celebrate the success of the motor industry. Clearly, it is very good for the people of the north-east and I hope that it will secure the future of the people in employment in Ellesmere Port. However, while we may not be cut adrift in our exports to India, I would say that we are cut adrift in our isolation in the European Union, and that saddens these Benches. The differences of opinion are clear. We believe that it is the young, the poorest and the most vulnerable in our society who are suffering, and most of the cuts have still not started to bite, as the noble Lord, Lord Razzall, pointed out.
There have been some very important speeches today, including of course that of the noble Lord, Lord Skidelsky, with whom I agree. In his wise contribution he said that it is better to put people and plant to work rather than to destroy them. I certainly agree with that. I also certainly agreed with the right reverend Prelate the Bishop of Durham, who said that confidence in the economy comes from action, not exhortation, and that it comes from cranes and scaffolding. Where are the cranes, where is the scaffolding, where is the infrastructure investment and where are the jobs?
I am very conscious of the late hour. I am very glad to have tabled the amendment because it focuses on the priorities that we believe should have been in the Government’s legislative programme. Looking at the result of the local elections and the polls, it is clear that they are also the priorities of the British people. Like us, they want this Government to change course. As I said, I am conscious of the lateness of the hour, so I shall not press my amendment to a vote. With that, I beg leave to withdraw the amendment.
Sovereign Grant Bill
Baroness Royall of Blaisdon Excerpts(12 years, 7 months ago)
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Baroness Royall of Blaisdon
My Lords, noble Lords may well wonder why I am speaking on a Treasury Bill. The reasons are two. First, my colleagues in the Treasury team all have long-standing engagements at this time during this unexpected week of business. Secondly, I hold Her Majesty in the greatest esteem, and, since I am a former Lord President of the Council and a former Chancellor of the Duchy of Lancaster, both positions of which I was immensely proud, it seemed appropriate for me to speak on behalf of the Opposition.
The Bill seeks to modernise and simplify the way in which we finance our Royal Family. It brings up to date the method of grant allocation and greatly increases the transparency of the finances of Her Majesty and the wider Royal Family. It facilitates accountability to Parliament via the National Audit Office and the Public Accounts Committee. On behalf of Her Majesty's loyal Opposition, I begin my contribution to this Second Reading debate by putting on the record our particular support for this element of the changes that we are discussing today.
I am glad that the business managers in this House have made proper time available for consideration of this short but important Bill. I understand that in the Commons there was no Second Reading because the previous business overran. This is yet another signal to the Government that their legislative programme really is far too full to enable the proper scrutiny that is rightly demanded by the citizens of this country.
This debate is happening 250 years after the current system for allocating funds to the Royal Household was first decided upon. It was in 1760 that King George III surrendered the entirety of the income from the Crown Estate to Parliament in exchange for an annual grant to fund his and his family’s duties in his role as monarch. With time, this grant has in fact developed into four separate allowances. The Civil List is the annual grant to meet the core official expense to enable the Queen to carry out her role as Head of State and Head of the Commonwealth, and it comes from the Treasury. There is a grant in aid for royal travel, which is funded by the Department for Transport, and the Department for Culture, Media and Sport provides both a grant in aid for maintenance of the royal palaces and a grant for expenditure on communications and information.
There is no permitted crossover between those pots of money. Their hypothecated nature has prevented a surplus in the travel grant being put towards the urgent upkeep of a particular royal palace, for example. The Bill before us today will put an end to this rigidity, giving the Royal Family the flexibility that they have always wanted, and it is extremely welcome. The new sovereign grant will be able to be used as the Royal Household sees fit under the guidance of the Keeper of Her Majesty’s Privy Purse, and the Opposition have absolutely no objection to this sensible rationalisation of the way in which the monarchy is funded.
I shall focus my comments around three broad areas: the level of the grant, the mechanisms to review it, and the audit of public funds apportioned to financing the monarchy. The Minister has informed the House that the value of the sovereign grant in any given year will be equivalent to 15 per cent of the profits of the Crown Estate in the two years prior. This means that in the first year of the new system, 2013-14, the sovereign grant will be determined as 15 per cent of the profits from the Crown Estate in 2011-12. The Minister has told your Lordships that this is predicted to equate to £34 million. This figure is broadly in line with the expenditure of the Royal Family in recent years. In another place, the Chancellor of the Exchequer explained that the effect of choosing this particular percentage of Crown Estate profits, in order to determine the level of the sovereign grant, would be to provide the Queen with a sum throughout this Parliament that was broadly the same as the sum she received throughout the last. The Chancellor is right to say:
“In the end, it is a matter of judgment whether £34 million or so is the right amount for the future”.—[Official Report, Commons, 14/07/11; col. 540].
From the opposition Benches, I wish to stress to your Lordships, and to the Government, that the key issues are the values and priorities that underpin that judgment. Her Majesty the Queen and the Royal Family continue, and must continue, to play a vital role in the affairs of our nation in the new century. They must be financed in a way that enables them to fulfil this role—at home and in the wider Commonwealth—and to maintain the support of the public. Accordingly, the funding arrangements need to strike a fair and workable balance between the legitimate needs of the household and the interests of taxpayers. Setting the sovereign grant at 15 per cent of Crown revenues will mean, from next year until the end of the current Parliament, a 3.2 per cent real-terms rise in the grant available to the Royal Household. I ask the Minister for reassurance that, in these times of austerity, when the impact of the Government’s policies and priorities, as well as the state of the global economy, are causing tough times for hard-working people across the country, the interests of taxpayers are being carefully considered. I also ask whether he is able to make available to Parliament detailed projections of the value of the sovereign grant over the coming years.
I turn to the scope for adjusting the level of the sovereign grant as outlined in this Bill. In the other place, the Chancellor of the Exchequer explained that the Government had chosen the mechanism of a percentage of the Crown Estate profit because it was,
“broadly in line with the economy”.—[Official Report, Commons, 14/07.11; co1. 536].
The Chancellor described the Crown Estate as a large commercial property company run in a conservative way, which was not a bad proxy for how the country as a whole was doing. We on the opposition Benches are not sure whether the figure of 15 per cent of Crown revenues will prove to rise in line with the overall performance of the economy going forward. The Crown Estate’s annual report describes current growth as “exponential” and growth over the next 10 years as “significant”. We know from recent figures and forecasts, including from the OBR, that the UK is flat-lining. We are disappointed that in another place the Government resisted calls from the opposition Front Bench to require the grant’s trustees to review the funding arrangements if the Crown Estate’s income rose faster in the previous financial year than the underlying trend growth rate of the economy. We felt such a provision to be particularly sensible considering the Crown Estate’s stake in offshore wind farms, and with Crown Estate income from renewables growing by 44 per cent in 2009-10. Notwithstanding this, we are pleased to say that the Government heeded the Opposition’s calls for more frequent reviews of the new funding mechanism. The Bill requires, as the Minister said, the calculation of the sovereign grant to be reviewed every five rather than seven years.
I am pleased to inform your Lordships’ House that Her Majesty’s Opposition fully support the auditing arrangements of the new system, as laid out in the Bill. It is welcome that, for the first time, the National Audit Office and the Public Accounts Committee will have the same powers to audit and scrutinise the Royal Household in the same way as any government department. We welcome this unprecedented increase in transparency and scrutiny of the Royal Household. It is not only the proper thing to do; it will likely serve to build further trust and support for the monarchy in our country. We hope that the PAC will decide to take frequent looks at the Royal Household’s accounts to monitor the suitability of the new sovereign grant mechanism.
In times of real economic hardship, and also at a time when the pressures on the Royal Family seem to be increasing in various ways, it is vital that in arriving at a settlement for funding the monarchy, Parliament balances the interests of the taxpayer with the dignity and needs of the Royal Household. The Bill seems to strike that balance, but I look forward to hearing the Minister’s response to my questions and those which will undoubtedly follow from other noble Lords.
Charities: VAT
Baroness Royall of Blaisdon Excerpts(13 years, 4 months ago)
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Baroness Royall of Blaisdon
To ask Her Majesty’s Government what steps they will take to allow Sue Ryder Care and other charities to recover VAT in the same way as other bodies providing public services.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, although local authorities, government departments, the NHS and certain other public bodies incur irrecoverable VAT, just as many charities do, on certain of their activities, it is the case that a small number of VAT refund schemes operate in the public sector. Charities already benefit from a range of tax reliefs and it is not proposed to introduce any general VAT recovery scheme for the sector.
Baroness Royall of Blaisdon
My Lords, I thank the noble Lord for his Answer and for the information that he provides. I understand that this is a long-standing problem, but it has been exacerbated by the rise in VAT to 20 per cent. Does the noble Lord agree that in the context of charities such as the excellent Sue Ryder Care, whose centre in Leckhampton I know well, being asked to provide additional public services as part of the big society initiative, some solution should be found to ensure that there is a level playing field between charities, local authorities and the NHS, when all are delivering the same or similar public services?
Lord Sassoon
My Lords, I certainly take the opportunity to commend the work that Sue Ryder and many other charities do. They are facing a tough time, as are many parts of society. We find ourselves in the regrettable situation that charities will be bearing the additional VAT. The whole of society is bearing the burden of the difficult decisions on deficit reduction. The charitable sector of course benefits from significant VAT and other tax reductions and exemptions to the tune of £3 billion a year. The question of a level playing field is important, but it is of a level playing field with the public sector, which itself cannot recover all its VAT. For example, in the National Health Service, only about 20 per cent of the irrecoverable VAT is refunded, and only on outsourced services. Equally, we must remember that there are commercial providers of social care and other services who would be disadvantaged if there was a special scheme for charities.
Comprehensive Spending Review
Baroness Royall of Blaisdon Excerpts(13 years, 6 months ago)
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Lord Sassoon
My Lords, I have got all night. I am very grateful to my noble friend. It is late, and we will have an opportunity to come back to these matters again. Specific funding for 16 to 19 year-old learning will be announced in the statement of priorities for the Department for Education later this year, so we will have opportunities to come back to that.
I move on briefly to one or two further points on reforms to our public services. We will leave no stone unturned in our search for waste, while we devolve power and funding away from Whitehall. I was very struck by the contributions by my noble friends Lady Browning and Lord Newby, who reminded us just how much more we can get from Government by better procurement and cutting waste. It is in those ways that we will be able to target expenditure going forward on those who need it—whether that is for 16 to 19 year-old education or those with disabilities. We have to remember at all times that the attack on waste continues to be a high priority.
Rightly, concerns have been expressed about the transitional effects of the job losses from the public sector. The Government are also very concerned about easing the transition, which is why we have announced the initiative such as the £1.4 billion regional growth fund.
I conclude today’s debate by saying that the decisions that we have taken have restored credibility to our public finances and stability to our economy. When we came to power, this coalition Government did face the worse economic inheritance in modern history. We have had to make tough choices—
Baroness Royall of Blaisdon
My Lords, the House will forgive me for delaying the Minister once more, but I thought that the noble Lord, Lord Shipley, and others raised incredibly important issues to do with local government funding in the forthcoming year. Would the Minister care to reflect or answer those questions?