Assisted Dying Bill [HL]

Baroness Wheatcroft Excerpts

Friday 7th November 2014 Lords Chamber

[Baroness Neuberger (CB)]

My Lords, I rise to speak to the amendment of the noble Lord, Lord Pannick, to which I have put my name, and to add to that of the noble Lord, Lord Carlile. I agree with almost everything that has been said but, if responsibility is given to the Family Division in some way or other, there might be reason for a ticket system, as happens in serious sex or murder cases. That way, the judges within the Family Division who are going to hear these cases very quickly will have had training in how to look at them and, where necessary, examine the medical evidence in detail. A ticket system and specific training for members of the Family Division in this area would be an improvement on simply saying that it was available to everybody. I support the amendment of the noble Lord, Lord Pannick.

[Baroness Wheatcroft (Con)]

My Lords, we have heard from three lawyers. I am not a lawyer—I have to confess that I have not read even paragraph 205 of Lord Wilson’s judgment—but I feel obliged to stand up and say that I think we are missing the point, as I see it, of the Bill of the noble and learned Lord, Lord Falconer.

This is not about medical decisions or judicial decisions; it is about compassion for people nearing the end of their lives. These people have decided that they have had enough. The thought of having to go through a legal process—even if, as we have heard, it has been curtailed as far as possible—and incurring legal bills is the last thing that they want to deal with, if they have complied with the law that the noble and learned Lord, Lord Falconer, is suggesting and have actually come to a reasoned decision that they have gone on long enough and the time has come for them to die. We ought not to prolong that procedure for any longer than we have to. I do not think that lawyers have the final view on all that is right.

[Lord Deben]

My Lords, my noble friend is assuming that every one of these cases is of someone who had voluntarily made all those decisions. We are here concerned that there will be some cases—from my long experience as a Member of Parliament, rather more than some people think—in which that is not so, and somebody has to protect them against being thought to have made that decision when in fact they have not done so.

[Baroness Wheatcroft]

My Lords, there may indeed be one or two occasions on which that is the case. However, we are looking for at least two medical opinions here, both of which will regard the sanity of the individual. If that individual decides, in full knowledge of what is going on within the family, that that is the decision they want to take, then, on balance, I suspect that we should let them.

[Baroness Mallalieu (Lab)]

My Lords, I have put my name to the amendment. I support the Pannick version of judicial intervention for the reasons already given with great care by the noble Lord, Lord Pannick. I also listened with care to almost all of the 129 speeches at Second Reading on 18 July in this House. There is a need to address two major reservations expressed by a number of noble Lords, which I accept have validity.

In essence, those reservations relate to two undeniable traits of human behaviour which we must accept exist and which no Bill of Parliament or amendment can extinguish. The first is selfishness. I see the noble Lord, Lord Tebbit, was trying to speak and I hope that he will shortly. He referred in his Second Reading speech to “the vultures”: relatives or friends who might have a financial or other interest in the death of a dying person and be tempted to put pressure on that person to end their life, to bring forward the date of the realisation of their expectations or, perhaps, to save care fees—albeit that, under the Bill, they would only have to wait a maximum of six months in any event.

Secondly, there is selflessness: those who feel guilty about the expense, trouble, time, worry and distress which they are causing those whom they love, and who may be tempted to shorten the process—not because they truly wish it—not for themselves, but for others. There are, of course, subdivisions: the relatives who cannot bear to see mother suffer, and so on. I accept that those are genuine concerns and they are the reasons why I primarily support the amendments of the noble Lord, Lord Pannick.

Although neither selfishness nor selflessness can be eliminated, through judicial oversight it can be guarded against, possibly even better than it is at present. The medical condition of the applicant can be assessed by a medical expert and by a wholly independent, experienced judge—although there are crooked lawyers and experts of every kind, our judiciary is still, thankfully, totally respected—who by training and expertise is qualified to judge pressure, coercion and genuine or false wishes, and to examine or evaluate evidence as to whether somebody has capacity, is acting voluntarily and has a clear understanding and a settled wish to end his or her own life. I want someone like that to have the ultimate say on the decision.

However, it is not a question of a decision being made by a doctor or by a judge; I want the decision to be that of the person who is facing death. We have got to get back to that. Judges, especially in the Family Division, are dealing with judgments of that kind—about what people really want, whatever they say, and about pressure and coercion—day in and day out. I will of course listen carefully to the amendments in the next group that have been tabled by the noble Lord, Lord Carlile, and others on judicial oversight. However, on the basis of what we have heard already from the noble Lord, they appear to present a bureaucratic, legalistic obstacle race which is bound to be both lengthy and costly to the applicant. One of the objects of the Bill is, I hope, to leave behind the absurd anomaly we have at present whereby, if you are rich enough, you can go to Zurich, but if you are not you have no choice but to endure possibly totally unnecessary suffering at the end of your life.

National Minimum Wage

Baroness Wheatcroft Excerpts

Thursday 6th November 2014 Lords Chamber

[Lord Newby]

My Lords, the Government support the living wage and encourage all employers who are able to do so to pay it. Her Majesty’s Treasury’s pay rates ensure that all its employees, including apprentices, are paid above the living wage and other departments are following suit, including DECC.

[Baroness Wheatcroft (Con)]

My Lords, the minimum wage is only a floor. Many companies are now choosing to pay the living wage and, indeed, ensuring that their suppliers pay it. Can my noble friend give us some numbers on that?

[Lord Newby]

My Lords, the number of companies that were accredited for paying the living wage in 2013 was 432. I believe that the number has more than doubled during the course of this year.

Industrial Strategy: British Business Bank

Baroness Wheatcroft Excerpts

Tuesday 8th July 2014 Lords Chamber

Asked by

[Baroness Wheatcroft]

To ask Her Majesty’s Government what is their strategy in relation to industrial policy, and in particular the British Business Bank.

[Baroness Wheatcroft (Con)]

My Lords, I am delighted to be leading this debate on the industrial strategy and the role of the British Business Bank within it. The good news is that there is a strategy. The even better news is that it is working. We have in the past seen Governments meddle with industry with less happy results. In steel, in motors and even in travel agency, Governments have demonstrated that they are not great when it comes to running things.

However, this Government have a well thought-out strategy which is not about short-term froth but about long-term benefits for the country. Establishing the British Business Bank is an important facet of that strategy, helping smaller firms to overcome that perennial problem of how to get their hands on finance. Governments sometimes seem to struggle to breach the divides between various departments but, on the industrial front, we really do have joined-up government: the Treasury working with BIS and UKTI to get the right results, to help our businesses grow and, crucially, to export.

The overarching policy is to provide an environment which nurtures business generally, with low corporation tax and sensible, not overburdensome, regulation. Although there are some difficulties which cannot be addressed overnight, and will in fact take years to put right, such as infrastructure failings and the skills shortage—which all too often means a failing of numeracy and literacy—the UK is nevertheless now an attractive place to start, build and grow a business. It is Europe’s top destination for foreign direct investment, the money flows that create jobs.

There is one school of thought that argues that government should not attempt to intervene in industry beyond providing that hospitable environment. Certainly, picking winners is a dangerous occupation, not that some Governments do not still attempt it. Choosing individual companies to be nurtured into being national champions is a recipe for national disaster. This Government have avoided it and wisely chosen to look not at companies, but at those sectors where we already have an edge and where an extra push might produce the greatest benefits for the country.

There are 11 such sectors. Another Administration might have rounded the number up and gone for a neat dozen, or rounded it down to come up with a top 10. The fact that both those options have been resisted in favour of 11 chosen sectors surely indicates that a genuine plan, rather than passing headlines, is what this is all about. The sectors are aerospace, agricultural technologies, automotives—and here I declare an interest as a director of Fiat; we do not yet manufacture in the UK but I am doing my best—construction, information economy, international education, life sciences, nuclear, offshore wind, oil and gas, and professional and business services.

Is it not instantly cheering to reflect that in all those really important and high-growth sectors, the UK already has some world-class businesses and they are going to get better? There are things that an enlightened Government can do to help. Within each sector, top executives now get together, not to collaborate on price—which would see them land up in jail, which is not part of the Government’s industrial strategy—but to look at where there are barriers to growth and things that Ministers can do to make life easier for them.

The Government can, and do, help to fund research which will benefit these chosen sectors. For instance, there is now a £7 million centre for “extreme engineering” at the University of Newcastle. The Neptune Centre for Subsea and Offshore Engineering brings together industry and academia to develop technologies that can withstand the world’s harshest environments. Future success in the oil and gas industry will depend on being able to employ the best science and technology, and what emerges from this centre will keep British companies at the forefront of these developments. Siting this ground-breaking centre on the north bank of the Tyne will give a boost to the revival of this part of Tyneside.

It is absolutely vital that our industrial strategy is not just about rebalancing the economy in terms of its dependence on the service sector, but about rebalancing it geographically. The concentration of wealth and wealth creation in London and the south-east is simply not healthy. In terms of gross value added, the average Londoner generates more than £37,000, while in the north-east the figure is marginally over £16,000, and in Wales it is even less than that.

While I am sure that we here in the capital like to think that we are doing our bit for the economy—although there are of course some who doubt that we do much of it in here—I am confident that in the north-east and Wales people feel the same way. These figures are a reflection not of a lack of energy or enterprise but of the huge growth in the financial services sector which has benefited London and of a lack of investment in the regions. Perhaps the Minister could tell the House how industrial strategy is contributing to rebalancing that. We need to make sure that the profits of growth are shared across the country and not just in the wealthy south-east. The growth is coming but we need to be sure that it is shared.

Remarkable evidence of that growth has come just today, with the latest figures from the National Institute of Economic and Social Research. It estimates that in the previous quarter Britain enjoyed its fastest growth for four years, at 0.9%; that really is cause for celebration. Yet, despite that remarkable achievement, we could do better. Too many of our small businesses stay just that way. For some that is a lifestyle decision, but for many it is because they hit hurdles that they simply cannot get over.

That was why the Government established the British Business Bank. In some ways this is still a notional entity, as it has to go through the laborious process of getting EU approval before it can take on a life of its own. That should come, I hope, by the end of the year. However, for now, the British Business Bank is part of the Department for Business, Innovation and Skills, and here it is already at work.

I confess to something of a maternal interest in the British Business Bank as I was a member of the steering group which tried to plot a useful course for this innovation. It was conceived as a potential solution to growing complaints from smaller businesses about the banks’ reluctance to lend, or at least to lend on reasonable terms. It is all very well to make an offer of funding to a small firm, but if it is at an interest rate and on terms which are completely impossible that does not really constitute an offer at all. The latest available figures indicate that banks’ reluctance to lend remains. According to the Bank of England, in the first four months of this year total lending to small and medium-sized enterprises was almost £2 billion lower than in the same period last year, which was itself £1.5 billion lower than in the previous year.

Now, maybe demand has really shrunk, but it is hard to believe that it has evaporated on that scale. The British Business Bank is therefore attempting to bridge the gap, encouraging new lenders into the market and channelling funds into innovative operators such as the peer-to-peer lender Funding Circle. Here I must confess to a touch of nervousness when I read the bank’s promotional material and see: “We’ll use … securitisation techniques”. It goes on to say:

“By using leverage as a tool”,

we will be able to—noble Lords will get the gist of what concerns me. Securitisation and leverage are not of themselves ruinous, but anyone who has lived through the ravages of the financial crisis has learned to treat them with a degree of caution. Can the Minister reassure the House that the business bank will remain focused on helping smaller firms rather than becoming a government-owned investment bank? I have always struggled with the term “investment bank” anyhow, because investment seems to be the antithesis of what those organisations do. Will the business bank specifically help companies in those 11 sectors that have been set out as the strategic sectors for the country?

The business bank can do much useful work in just guiding smaller firms through the various schemes available for them—all 810 of them, according to the website. From the Armagh Business Centre through the Survive and Thrive programme to the Wood Energy Business Scheme, there surely must be something for everyone—but finding it may be difficult. A bit of streamlining might not go amiss. The business bank website is on its way to becoming a user-friendly information hub, but there is still a way to go. Often money is not the key to what smaller firms need.

I will end—and I promise that I will end here—by mentioning a scheme launched at the beginning of this year to bolster the 8,900 mid-sized businesses in this country. Currently those businesses make up just 0.5% of all businesses, but contribute around a fifth of employment and turnover. The CBI reckons that if they were to reach their full potential, they could add £20 billion to £50 billion to the economy. I cannot see why the sky should not be the limit. However, only 17% of those businesses export. The Government have now sent a personal letter to each one of those companies, asking if they would like individual support from UKTI to get them exporting. There are specialists ready to work with them. Is that not an industrial strategy in action?

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)]

My Lords, I am extremely grateful to my noble friend Lady Wheatcroft for initiating this important debate. I pay tribute to her for her contribution to the business bank steering group.

Changes in international economies are creating new challenges and opportunities for business across Britain. Last week, in a debate in this House, I talked about what we are doing to support manufacturing in the UK, which was mentioned earlier. This debate allows me to go in to more detail on the Government’s industrial strategy and how the British Business Bank is providing access to finance for smaller businesses to help them grow and prosper. I fear that I will not be able fully to address the questions raised by the noble Lords, Lord Haskel and Lord Stevenson, because there were some particularly negative opinions given. As my noble friend Lord Stoneham said, I believe that the industrial strategy is clear and I seek to try to explain that today.

Your Lordships will be aware that the industrial strategy, launched by Vince Cable in 2012, has given impetus and focus to this Government’s long-term plan for growth. I am pleased to hear that there was much agreement today on that. It provides businesses, investors and the public with more clarity about the long-term direction of the economy, looking beyond this Parliament. The Government are working in partnership with industry to provide support across a wide range of sectors. They are broad sectors rather than picking winners, as my noble friend Lady Wheatcroft said.

The noble Lord, Lord Haskel, asked what the purpose of the industrial strategy is. The industrial strategy is providing a spectrum of support for a range of sectors and this partnership with industry is giving both government and industry confidence in the future direction of the economy and confidence to set policy to address the needs of business, and for business to invest in long-term growth. But it is more than that. The industrial strategy is about economic growth and providing benefit for us all.

The noble Lord, Lord Stevenson, asked about the creative industries not being one of the industrial strategy sectors. The Government are providing a spectrum of support for a wide number of sectors, over and above the 11 listed in the industrial strategy, and BIS is working closely with DCMS on the creative industries strategy. Nicola Mendelsohn, the industry chair of the creative sector, sits on the industrial strategy council, which is a sign of the breadth of engagement outside the 11 sectors.

The UK also has great strengths in the life sciences field—a sector I want to focus on—where, among other successes, and as evidenced in the news today, we are world leaders in ground-breaking dementia research. Last week, we launched “Create UK” in support of the creative industries, which are worth £71.4 billion to the UK economy, a sector that I know well in my role as the Minister for Intellectual Property.

My noble friend Lady Wheatcroft asked how we would address regional imbalances in terms of investments and funding. Only yesterday we launched the growth deals for the 39 local enterprise partnerships further to support local growth throughout the country through £6 billion of funding for transport, housing, business support and skills projects in the regions. These growth deals are the latest part of the Government’s long-term plan to boost growth around the country, following, among other projects, the multi-billion pound regional growth fund, and the city deals signed with 26 urban areas across the country.

My noble friend Lady Wheatcroft raised the issue of ensuring that the impact of the industrial sector is felt across the UK. As the House will be only too well aware, my noble friend Lord Young of Graffham is working hard with the sectors to increase their help for small and medium-sized enterprises, and in the professional and business services sector, which I co-chair, we run regular regional workshops for SMEs. Members of the council, including my co-chair, attend these and offer advice.

I will be focusing primarily on access to finance but there are some cross-cutting themes that underpin our support for all sectors. As I mentioned last week, we have invested £600 million in the “eight great technologies”. These are the technologies where we have the research expertise and business capabilities to be a world leader. They are supported by the Technology Strategy Board and include robotics, big data and energy storage. We are helping to bridge the gap between research and development and the market through £74 million of investment in nine catapult centres, which are complementary to our industrial strategy.

On the important subject of skills, which was raised by my noble friends Lady Wheatcroft and Lord Stoneham, we need to address the current and future shortages. We need to strengthen our science, technology, engineering and maths skills base by building a skills pipeline at all levels from technicians through to postgraduates. To do this, we are, first, investing £185 million in the teaching of STEM subjects; secondly, offering traineeships to young people; thirdly, we are building and delivering a network of new national colleges to provide specialist vocational training; and finally, as the House will know, we have set up university technical colleges.

As my noble friend Lord Stoneham highlighted, we are unlocking procurement opportunities, advising businesses in advance what the Government are planning to purchase so that they can invest in the right skills and equipment to make the most of these opportunities. Through UKTI we are helping our companies to export. In April 2014, UK organisations won four new contracts worth £1 billion to establish 12 technical and vocational training colleges in Saudi Arabia. Key events such as the International Festival for Business in Liverpool, which I attended two weeks ago, help us to showcase our companies and technologies on the world stage. The festival is creating new business-to-business relationships, and unlocking commercial openings for small, medium and large companies, both at home and overseas.

I now turn to the important point of access to finance. Well-functioning markets for finance are crucial for ensuring that firms can invest and operate when they need to, producing new and improved goods and services, and in turn boosting the UK’s productivity and competitiveness. We do understand that there are some well-documented long-standing supply and demand issues, which mean that smaller firms cannot always access the finance that they require. My noble friend Lady Wheatcroft alluded to this. We have been addressing these issues, and hence the reason that this Government have established the British Business Bank.

The business bank is providing funding and guarantees through private sector finance providers, allowing them to offer more targeted and appropriate finance products for smaller firms so that they can prosper and grow. My noble friend Lady Wheatcroft raised issues about using securitisation techniques as part of the modus operandi of the business bank. I agree with my noble friend that the business bank should operate for the good of the economy. It will not operate for its own benefit. It is already staffed by skilled professionals who know how the markets work. But it will operate within the rules set by BIS and the Treasury, and with a sensible risk appetite.

Over the next five years, the bank aims to unlock up to £10 billion of financing for commercially viable smaller businesses. A range of British Business Bank programmes is already making a real and significant difference, catering for the diverse needs of smaller firms, such as start-up loans, which support entrepreneurs looking to start a business with a repayable loan of up to £25,000, and give access to a business mentor. I am delighted to report that more than 18,500 of those loans have now been offered to entrepreneurs, with more than £92 million approved to finance start-up businesses.

The British Business Bank also provides guarantees through the enterprise finance guarantee scheme to support loans to firms that would otherwise be declined funding due to a lack of collateral for working capital purposes. This programme has proved a considerable success, providing nearly 15,500 loans since the election and resulting in more than £1.6 billion of additional lending to smaller businesses.

The bank also provides a suite of venture capital interventions, including enterprise capital funds, which support and promote a diverse and vibrant market to help early-stage and high-growth firms. The enterprise capital fund programme currently has 16 separate funds, nine of which are investing in early-stage opportunities, with a combined capacity of more than £530 million.

As my noble friend Lord Leigh mentioned, a £300 million investment programme has been developed to provide support for a range of finance providers, including debt funds and peer-to-peer finance platforms. To date, £198 million of awards have been recommended by the investment panel, which will support more than £800 million of lending capacity.

The British Business Bank will also provide information and advice to smaller businesses about how to successfully go about getting the right type of finance. One example of this is the recently published Business Finance Guide, produced in association with the Institute of Chartered Accountants in England and Wales.

We believe that the investments made by British Business Bank programmes are already delivering significant results. In total, British Business Bank programmes facilitated £782 million of new lending and investment in the last financial year. Over 60% of this funding was provided through new, emerging or smaller finance providers.

My noble friend Lord Wrigglesworth mentioned the need to balance good regulation in banking with promoting sensible risk-taking. Banking regulation has tightened greatly. This Government have led global efforts to increase capital and liquidity requirements but we are also aware of the need to promote competition. This is why rules for small and new entrants are not as strict and the process for new banking licences has been streamlined. We see the results in new banks coming into the market.

My noble friend Lord Stoneham asked about success measures for the British Business Bank. Last week we published our success measures in the bank’s strategic plan, which are: increasing the amount of finance for small firms; increasing choice; increasing small firms’ confidence in finance markets; and finally, doing all this while managing taxpayers’ resources efficiently. These will be turned into detailed KPIs over the next few months and this will be monitored by the British Business Bank’s board, which itself will report to BIS Ministers.

My noble friend Lord Leigh asked to see greater transparency on the British Business Bank’s results. I assure my noble friend that all results will be published and fully transparent.

The noble Lord, Lord Haskel, if I read him correctly, asked how much of the British Business Bank’s activity is effected on its own account. All the bank’s lending and investment is exercised alongside private sector providers. So, of the £782 million of lending and investment last year, around one-quarter is public sector money and the rest is new money from the private sector.

To conclude, the British Business Bank is integral to the UK’s long-term industrial strategy and is playing a vital role in removing the barriers to businesses accessing finance. This Government’s commitment to a long-term industrial strategy has already proven a success in supporting growth and turning our economy around, and its impact will continue to be felt long after this Parliament. It is essential that we continue to work in partnership with industry to address barriers to growth, both to unlock the potential of British business and to deliver strong and sustainable growth.

[Baroness Wheatcroft]

My Lords, I thank the Minister for his comprehensive response, and I take comfort from the fact that he reassured us that the business bank will work within strict limits as to the risk it takes. I take rather less comfort from his reassurance—

[Lord Newby (LD)]

My Lords, I am sorry to interrupt the noble Baroness, but I should perhaps remind her that in this type of debate she does not have the right of reply.

Payday Loans: Debt Collection

Baroness Wheatcroft Excerpts

Tuesday 1st July 2014 Lords Chamber

[Lord Newby]

My Lords, I think Wonga is finding it increasingly difficult to portray itself as the good guy. That has been demonstrated by this episode. The key thing to point out is that the action of the FCA has resulted in prompt redress and that 45,000 consumers will be getting a payment from Wonga. Until the FCA had the powers that it assumed in April, there was no provision under the previous regime for the OFT to secure redress for customers in that way. If, under the old regime, the OFT had initiated a criminal process, it is quite likely that it would have taken the best part of three years to reach a conclusion; whereas, under this process, consumers have got money back from Wonga very quickly.

[Baroness Wheatcroft (Con)]

My Lords, we hear much in this Chamber about how credit unions are a preferable alternative to the Sue, Grabbit and Run tactics of some of the payday loan companies, but many people working in Parliament would probably benefit from the presence of a credit union. Has my noble friend given any consideration to the establishment of a parliamentary credit union?

[Lord Newby]

My Lords, I think there may be one but, sad to say, I have not become a member of it. I will write to my noble friend explaining how she might join and put the letter in the Library of the House so that other Members may do the same.

Economy: Growth

Baroness Wheatcroft Excerpts

Tuesday 11th February 2014 Lords Chamber

[Lord Newby]

My Lords, I absolutely agree with the noble Lord. The Treasury has done some work on the so-called border effect: what happens to growth if the Scottish economy and those of the rest of the UK are separated by a border. Its best estimate was that over a period of several decades, the Scottish economy could be about 4% poorer than would otherwise be the case, compared to a reduction in the rest of the UK economy of 0.2%. There are much bigger risks for the Scottish economy through independence than there are for the rest of the UK, but both sides would suffer.

[Baroness Wheatcroft (Con)]

My Lords, can my noble friend tell us what would happen to the BBC in the event of Scottish independence?

[Lord Newby]

My Lords, I am not sure I can, but that demonstrates how difficult it will be to manage the independence process. There are so many parts of what we take for granted in the way that we do things in the UK that would have to be severed; for example, one has only to think about the value of having an integrated BBC to see that if it were severed, how much of a loss that would be to everybody, whether they were in Scotland or the rest of the UK.

Finance Bill

Baroness Wheatcroft Excerpts

Monday 15th July 2013 Lords Chamber

[Baroness Wheatcroft]

My Lords, I echo the words of my noble friend Baroness Kramer in saying what a pleasure it was to sit on the committee chaired by the noble Lord, Lord MacGregor. This is not a subject that everybody would find intensely intriguing, but our deliberations were always entertaining, as well as interesting.

The most important thing that this Government have done on income tax is to make sure that the wealthiest pay the most. The top 1% now contributes more to the coffers of the country than in the past. This is a principle to which we need to adhere and I am glad to see that it will continue. The theory is—and I am sure it will be proved right—that, even as the top rate comes down, we will get more income from the wealthy. There are ways that they can move their domicile and their tax status, should they find their surroundings uncongenial.

However, we need to go a lot further in simplifying tax. My noble friend Lord MacGregor referred to the Office of Tax Simplification. It was created in July 2010, though I fear that tax has not become much simpler since. Indeed, the latest edition of Tolley’s Tax Guide now runs to 16,220 pages. The individual guides on income tax, corporation tax and capital gains tax each run to more pages than War and Peace. There must be progress that we can make there; I would like to think so.

Moving to the Finance Bill, the two issues I wish to address are the GAAR—which has been much spoken about—and the income tax relief limit. The GAAR is going to be a disappointment to a lot of people, and we should not be surprised by that. The hostility to the way in which many multinationals organise their tax affairs runs deep. The hope is that the Government are doing something about it. The GAAR cannot and does not attempt to do that, nor can the Government do so alone. It is right that the route that we are taking is through international organisations such as the OECD and the G8 because, as a country, we cannot move unilaterally to deal with the taxation of multinationals.

Winston Churchill, always a good man to quote, said:

“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle”.

It is a good image. If we go out on a limb and create a tax regime that is inhospitable to other countries’ companies, we will be the ultimate losers. We need a regime that is fair, and the only way that this can be done is on a multinational basis. We are going in the right direction and leading the discussion, but I am under no illusion about our chances of success any time soon.

In the mean time, what is to be done? The debate in the other House spent a long time discussing the possibility of companies having to declare the amount of corporation tax that they pay in this country. The Government do not want to go in that direction. However, they could encourage a degree of boasting. Would it not be a good idea if companies were encouraged to declare proudly how much tax they were paying in this country? I do not mean fudging it by folding into their total tax bill VAT, national insurance and anything else that they can think of. We want to know about corporation tax. It would be very good if some companies followed the lead of RTZ, for instance, and spelled out proudly what they were paying, to see whether that would win them a few brownie points from consumers. It was intriguing to see how Starbucks eventually reacted to public fury over its tax bill. While proclaiming all along that it was doing nothing wrong—which was absolutely true in legal terms—it felt obliged to offer a bung of £25 million. That was a strange thing to do in the circumstances: “I’m not guilty but, just in case I am, here you are”.

The GAAR cannot deal with this. As my noble friend Lady Kramer said, it will not be the easiest thing to operate. A double-reasonableness test is a hard one to get over. Not only must an action be seen to be reasonable, even if it is not in some minds reasonable, but the individual undertaking the action need only contend that he had a reasonable belief that it was a reasonable action for the action not to fall foul of the GAAR. One of the most interesting sessions that our committee had was when two tax counsel came before us. Their eyes lit up at the prospect of the work to come. These things will be contested.

Nevertheless, it has to be a step in the right direction, and it is already beginning to change behaviour. I am told that fewer questionable schemes are being put forward. It is good to think that the creativity that has gone into finding ways around the tax laws might be used in more positive ways. Avoidance on the aggressive scale that has been in evidence is against the interests of the country, and it is absolutely right that a measure such as the GAAR should be brought in to try to deal the worst cases of abuse.

The other item in the Finance Bill that I will talk about probably needs very speedy changing. It is the limit on reliefs. I understand why the Government feel that it is right to limit the amount of tax relief of which any individual can make use. However, the law of unintended consequences could mean that entrepreneurs are restricted in what they do at a time when we need businesses to flourish, and young businesses in particular to grow and invest. It would be perverse to bring in something that could involve an individual facing a tax bill that is higher than the profits from their business. The Minister may have seen the evidence put forward by the Chartered Institute of Taxation, which is deeply concerned about how this may work. In the end, our committee recommended that there should be a review of these provisions. It was perhaps unfortunate that the Government did not follow their own tax consultation framework in driving through the proposals. Therefore, a speedy review is a very good idea.

Queen’s Speech

Baroness Wheatcroft Excerpts

Monday 13th May 2013 Lords Chamber

[Baroness Wheatcroft]

My Lords, it gives me great pleasure to follow the noble Baroness, Lady Lane-Fox, and I congratulate her on such an insightful maiden speech. As others have said, she is a very welcome addition to this House, bringing to it a remarkable business background and a determination to help everyone make the most of digital technology. She is now working with the Cabinet Office to that end, but I first met her when she was running lastminute.com, the business she started with Brent Hoberman. Unlike so many digital businesses, lastminute.com is still going strong. However, the noble Baroness, Lady Lane-Fox, has moved on and now sits on several boards, including that of Marks & Spencer. She has also launched a chain of karaoke clubs. I like to think that many of your Lordships are members and enjoy their facilities.

In February, “Woman’s Hour”, that most influential of programmes, anointed her as one of the 100 most powerful women in the UK. From what we have heard today, I am certain that she will make a very powerful contribution to your Lordships’ House. Britain needs more people to build businesses and create wealth. The gracious Speech spelt out that the Government’s first priority is to strengthen Britain’s economic competitiveness, but we have a long way to go. I am delighted that by 2015, this Government will have cut the rate of corporation tax to a level which makes the UK the joint lowest in the G20, but a low rate of corporation tax will not ensure our competitiveness. The UK suffers from a dire level of productivity. Figures released in February by the Office for National Statistics showed that output per British worker trailed the G7 average by 21% in 2011. Output per hour was some 16% worse than across the other major industrialised economies, the worst figure for 18 years. Economists expect that the picture will be even bleaker in the current year. According to Spencer Dale, the Bank of England’s chief economist, the level of private sector productivity is around 15% below the level that would be implied by a continuation of the trend before the economic crisis hit. My noble friend Lord Deighton pointed to the new investment in infrastructure and transport being made and that will help, but it will not cure the problem.

Today, in his inimitable style, the Mayor of London gave his own explanation for why UK productivity may be low. He referred to classic,

“British short-termism, inadequate management, sloth, low skills, a culture of easy gratification and underinvestment in both human and physical capital and infrastructure”.

No doubt London’s business leaders will wish to respond to his considered view. I do not completely share it. However, it is clear that low productivity disadvantages the country and we need to find a way to improve it. The gracious Speech heralded some welcome measures for business—in particular, the promise of further deregulation. Red tape remains a major hindrance to business efficiency and undoubtedly puts UK firms at a disadvantage when competing particularly with those from outside Europe. Europe, of course, is where much of the red tape begins.

I also applaud the move cited by my noble friend Lady Kramer to exempt companies from the first £2,000 of their national insurance bills. That should encourage businesses to recruit, but the Mayor is right when he cites low skills and a lack of investment as the key to Britain’s productivity problems. The Government are doing their best to enhance the skills of those currently in the education system and are committed to trying to ensure that school leavers not going on to university move into training or apprenticeships. However, we have far too many unskilled workers. According to the Chartered Institute of Personnel and Development, there are on average 45 people applying for every low-skilled job. Improving the skills of the older unemployed is essential—and so is investment.

Britain’s companies are sitting on an unprecedented cash pile. Non-financial businesses had a total of £672 billion in the bank last year. The Government have tried to encourage them to invest. Generous capital allowances are available but that policy has not been noticeably successful. There seems to be a risk aversion in business and the key may be to address the chronic short-termism that the Mayor cites. The owners of big businesses, the shareholders in public companies, do not encourage investment for the long term, because they are too interested in short-term gains. We need to find a way of encouraging investors to think long term and to foster an attitude that does not view stocks as mere gambling chips. There have been many investigations and reports into this but, so far, nobody has found a solution. If the Government were to find some means of encouraging and rewarding institutional investors for taking a long-term view, it would result in an improvement in productivity.

The other aspect of the economy on which I should like to focus is the dominance of London. Even allowing for the importance of financial services to the capital and the hammering that the sector has taken in recent years, London’s economy has outperformed that of other regions since 2007. Between 2007 and 2011, it grew by a nominal 12.4%, compared to just 2.3% in some parts of the country and no more than 6.8% anywhere else. This led to London’s share of output increasing from 20.7% to 21.9% over that period. The right reverend Prelate the Bishop of Birmingham spoke eloquently of the needs of the regions.

Whether the statistics say that we have escaped a double-dip recession or not, there are many parts of the country where the views of economists count for little. If it looks like a recession, if it feels like a recession and if it hurts like a recession, it is a recession. The Government are pledged to push a greater proportion of growth-related spending to local areas from 2015, and we have heard how that will be of benefit. However, more can be done. The numbers employed in the public sector are decreasing but will remain substantial. Wherever possible, those jobs should be pushed out of London—not just the clerical jobs but the jobs at the top. In the digital age, with Skype available to all, there is no need for everyone to be in the capital. The savings in property costs would be beneficial, as would the boost that would be delivered to the regions. I am sure that plenty of civil servants would hesitate even to contemplate this and might talk about the huge transport bills that they would incur when coming to London for meetings. Forget it; they can just go online. I am sure that the noble Baroness, Lady Lane-Fox, can advise on how that could be done. There is much talk of rebalancing the economy away from financial services to manufacturing, but a bit of rebalancing away from London would also be a good idea.

Taxation: Avoidance

Baroness Wheatcroft Excerpts

Thursday 14th March 2013 Lords Chamber

[Lord Newby]

The Government support country-by-country reporting for the extractive industries, where some of the worst abuses are taking place. We are currently looking at broader proposals for country-by-country reporting. On the point about expanding the principle more widely, we want to make sure that we get the costs and benefits right.

[Baroness Wheatcroft]

My Lords, does the Minister agree with me that the important thing, as we have heard, is to get global companies to pay their fair share of taxes everywhere, including in Britain? One way in which to ensure that we get more from them would be to look again at the transfer pricing regime.

[Lord Newby]

Absolutely. Because the transfer pricing regime is based on international rules, we have put more resources into the OECD process, which is moving forward reasonably quickly. An interim report was produced last month, and there is now a recognition that the rules have to be changed among the major European countries and the major countries in the G20. I sincerely hope that the rules will be changed.

EU: Eurozone Financial Transaction Tax

Baroness Wheatcroft Excerpts

Tuesday 5th March 2013 Lords Chamber

[Lord Newby]

My Lords, the noble Lord needs to understand the difference between a tax which we would levy, where there is a veto, and a tax which we would help collect, of which there are a number of existing examples in EU law and this would be another.

[Baroness Wheatcroft]

My Lords, does my noble friend agree that a tax which was to some extent a deterrent on frequent trading—for instance, algorithmic trading—might not be such a bad thing if it encouraged long-term investment in shares?

Finance: Peer-to-Peer Lending

Baroness Wheatcroft Excerpts

Wednesday 19th December 2012 Lords Chamber

Asked By

[Baroness Wheatcroft]

To ask Her Majesty’s Government what is their assessment of the impact of peer-to-peer lending on major financial institutions.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords—

[Lord Sassoon]

Wait for the Answer—but I believe it is a good news story.

Peer-to-peer platforms are currently small in the context of the UK lending market but they are growing fast. It is too soon to assess what impact they might have on other financial institutions but, over time, we expect alternative forms of finance, including peer-to-peer platforms, to bring additional choice and greater competition to the lending market.

[Baroness Wheatcroft]

I thank my noble friend for his response. This positively being his last time at the Dispatch Box, I take this opportunity to thank him for all his work there.

[Noble Lords]

Hear, hear.

[Baroness Wheatcroft]

Although there is a place for peer-to-peer lending, small firms really require lenders who understand their business, who can see them through difficulties as they arise, who understand what they need in the way of advice and who certainly will not pull the rug away from them at the first sign of difficulty. The Government are doing what they can to encourage lending to small businesses but can my noble friend tell me whether they are managing to encourage a longer-term approach?

[Lord Sassoon]

My Lords, I am grateful for my noble friend’s remarks. I certainly agree that we want diversity in lending. I do not believe that p-to-p lending will solve every problem but I think it has an important role to play. Alongside the money that BIS put in to support two of the p-to-p businesses only last week, through the Business Finance Partnership, BIS also put some money into funds managed by lenders that I think will probably fit more with my noble friend’s model. It is also worth noting that some of the new bank lenders, such as Aldermore, have been some of the biggest takers, relatively, of funds under the Funding for Lending scheme. I agree that diversity is needed.