Civil List

Debate between Lord Beamish and Justine Greening

Thursday 30th June 2011 Commons Chamber

[The Economic Secretary to the Treasury (Justine Greening)]

The last time that the House substantively debated this issue was during proceedings on what became the Civil List Act 1972, and, as the system that the Act implemented comes up for renewal, it is only right that we debate its merits and potential for reform.

I am grateful to right hon. and hon. Members for, in particular, a lively and informative debate about reforming the sovereign grant. As we heard from my hon. Friends the Members for Brentford and Isleworth (Mary Macleod) and for Northampton North (Michael Ellis), the royal family contributes a tremendous amount to our country, and they paid fitting tributes to its work on behalf of the nation. We also heard from other Members their thoughts about the royal family and how they should be funded in future.

Of course, the last time we had such a debate was back in 1972. I have not yet had time to read that debate; I am not sure whether it would have been as entertaining as the one we have had today. We heard suggestions about whether we should have a biking monarchy. I am sure that Members will be interested to know that the Duke and Duchess of Cambridge were given a tandem Boris bike by the Mayor of London; I am sure that they will use it frequently.

As my right hon. Friend the Chancellor said, we believe that the system is in need of change. I greatly appreciate the support of the shadow Chancellor, the right hon. Member for Barking (Margaret Hodge) and my hon. Friend the Member for Gainsborough (Mr Leigh) for the measures that we are bringing forward. We want to reform the system so that we can put the grant funding on a sustainable, long-term footing and, as we have said, open it up to full parliamentary scrutiny. I think the colleagues I mentioned appreciate the objectives that we have in mind. In addition, we want to take the opportunity to modernise and simplify some peripheral elements of the current legislation.

As the Chancellor set out, we have been guided by three principles: first, ensuring that we have sustainable, long-term financing for the royal household, free from annual political interference; secondly, ensuring that it has some flexibility so that the royal household can manage its finances efficiently; and thirdly, ensuring accountability by establishing proper checks and balances to prevent sums from becoming excessive. Following those principles, we have arrived at the proposals that we are debating—initially, although we will have a Second Reading debate shortly—for a new sovereign grant.

These are genuinely significant reforms that are designed to last. Linking the sovereign grant to Crown Estate profits means that arrangements will be durable where the old system was not. As we have heard, 15% of Crown Estate profits is the starting point for deriving the grant amount. It will be based on 15% of profit in the year two years prior—so, for example, the grant for 2013-14 will be 15% of the profit for 2011-12. That will provide an amount that should keep royal spending broadly in line with spending in recent years in real terms. The percentage will be reviewed every seven years. In the unlikely event that an increase is proposed, it will require affirmative resolution in Parliament; and, of course, there are powerful control mechanisms that ensure that the grant never becomes unmanageable.

Furthermore, the Bill brings accountability arrangements for the royal household into line with those for other Government Departments. We think it is important that Parliament should have the ability to scrutinise the expenditure when it sees a need to do so—

[Mr Kevan Jones]

If a large surplus builds up in the seven-year period, what will happen to it? Will it be retained by the royal household for their use, or will it be paid back to the Treasury?

[Justine Greening]

There will be a cap at 15% of the spend by the royal household in the previous year. If the hon. Gentleman waits for a few more minutes, when I will have a chance to present the Bill to the House, he will have even more information at his disposal to understand exactly how that cap will work, how the review will take place, and who will perform it.

The Bill brings accountability arrangements for the royal household into line with those for other Government Departments. Parliament will have an opportunity to scrutinise that expenditure when it—

Finance (No. 3) Bill

Debate between Lord Beamish and Justine Greening

Tuesday 3rd May 2011 Commons Chamber

[Mr Kevan Jones]

Does my hon. Friend agree that if we had listened to those on the Conservative Front Bench, including the Chancellor of the Exchequer, who did not want to intervene in Northern Rock and wanted to let banks go bust, the banking crisis in this country would have—[Interruption.] The Economic Secretary chunters from a sedentary position, but what I am saying was said by the—[Interruption.] She can keep chuntering, but the truth hurts. The fact of the matter is that if we had listened to the Chancellor—

[The Economic Secretary to the Treasury (Justine Greening)]

rose—

[Mr Jones]

You cannot intervene on an intervention. I am going on because the Economic Secretary has been wittering on for so long.

--- Later in debate ---

[Mr Kevan Jones]

I support the amendment, which asks for a review. In the previous debate, we asked for a review of the implications of the bank levy. Similarly, the amendment calls for an assessment of the impact of taxation on fuel prices. It would be disingenuous to suggest that all Governments have perfect relationships when it comes to dealing with fuel duty. Clearly, the previous Government had problems with the cost of fuel and difficulties over taxation, but my hon. Friend the Member for York Central (Hugh Bayley) exploded one of the myths about the tax-take from fuel duty. Under the Conservative Government from 1990 to 1997 the tax-take on unleaded petrol rose by 16%, and under the Labour Government between 1997 and 2010 the tax-take fell from 75% to 65%.

The Government delayed the planned fuel duty rise, as Labour Governments did previously, as oil prices rose. Was that the right decision? Yes. At a time when many hard-working families are affected not only by higher inflation and increased taxation, but by wages being driven down and in some cases by family members facing unemployment, the Chancellor’s VAT increase puts about £1.30 on the cost of filling up a 50 litre tank of petrol.

[Justine Greening]

Will the hon. Gentleman tell the Committee whether he voted against the VAT increase? I suspect he did not.

[Mr Jones]

I am becoming concerned. The hon. Lady’s blood pressure does not seem stable tonight. She seems to be turning red and getting rather excited in tonight’s debate, which I am not sure is good for her health. Why did she argue for and push through an increase in VAT when she and her Prime Minister stood on a manifesto saying that they would not put VAT up? That is not being honest with the British people. What she has to explain to hard-working families in my constituency, North Durham, and in Putney is why she reneged on that promise.

There has been much talk in recent weeks about trust in politicians, and a lot of nonsense talked by the yes to AV campaign about whether MPs are hard working and trustworthy. When the Prime Minister and the hon. Lady say clearly that they will not increase VAT, and then that is the first thing she does, I understand why my constituents and hers are rather cynical about certain promises.

In the Budget the Chancellor used the gimmick of cutting the price of petrol by 1p. We will shortly debate how he will pay for it. It has had disastrous consequences for the economies of parts of Scotland and north-east England. He also increased VAT by 3p. He took it off with one hand and put in on with the other. Paying for that will have consequences for oil exploration in the North sea not only in the next year or so, but for a generation.

--- Later in debate ---

[Mr Kevan Jones]

In response to my hon. Friend the Member for Bishop Auckland (Helen Goodman), the Minister talked about negotiations she is having with individual oil companies. Is the revenue from fields going down? If so, from where is she providing compensation to fill the gap, or is she not giving any money away at all in these negotiations?

[Justine Greening]

The hon. Gentleman is missing the point that because of the high oil price there is continued investment in the North sea. Interestingly, Professor Kemp’s optimistic scenario is $90 a barrel and 70p per therm, but as I just said, the OBR has projected independently that oil prices over the next five years could be more than $100. That is $10 higher than the most optimistic scenario in Professor Kemp’s analysis.

Oral Answers to Questions

Debate between Lord Beamish and Justine Greening

Tuesday 22nd March 2011 Commons Chamber

[The Economic Secretary to the Treasury (Justine Greening)]

The independent Office for Budget Responsibility’s November economic and fiscal outlook takes into account the spending plans set out in the 2010 spending review. The hon. Gentlemen ask about a recent assessment, and I can tell them that the OBR will publish an updated forecast alongside tomorrow’s Budget.

[Mr Jones]

Durham university’s economic model shows that between 45,000 and 50,000 individuals will lose their jobs in the north-east of England as a direct result of public expenditure cuts, including 20,000 in the private sector. What message does the Minister have for those individuals and also for the 10.2% of the north-east population who find themselves unemployed?

[Justine Greening]

Coming from a Labour Member, given that unemployment rose during his party’s time in government, people will find that pretty hypocritical. The only way in which we will get sustainable jobs and a sustainable economy that is not as reliant on the public sector will be to carry out our deficit reduction plan. The hon. Gentleman will hear more about our growth review tomorrow.

Finance Bill

Debate between Lord Beamish and Justine Greening

Thursday 15th July 2010 Commons Chamber

[Justine Greening]

Many people on the minimum wage will not view it as progressive for someone who can afford to pay upwards of £100,000 a year into a pension fund to be given a 20% marginal rate tax break. In fact, that was not the only problem. Having listened to the concerns of the pensions industry and employers, this Government have real reservations about the approach towards pensions tax relief that was adopted in the Finance Act 2010. We believe it could have unwelcome consequences for pension saving, bring significant complexity into the tax system and damage UK business and competitiveness. The director general of the CBI said of the previous Government’s measure, brought forward in the Finance Act 2010:

“This will have serious consequences—it will make it much harder for UK business to attract and retain global talent… In every way, it’s a bad move.”

In addition, a number of features of the approach adopted in the Finance Act 2010 were unfair. For example, it included a very complicated income test, which made it difficult for individuals and advisers to understand. It also made it difficult for individuals to plan, as they would not know their final income until the end of the tax year so they would not know until then whether or by how much they would be affected. The income test also created many perverse incentives, avoidance opportunities and anomalies. For example, different charges could arise, depending on whether an individual or their employer made the pension contributions.

Under the approach in the Finance Act 2010, individuals on the highest incomes, who are able to put in very large pension contributions—upwards of £100,000 to £200,000 in one year—would have continued to get pensions tax relief, as they would still have been able to get relief at the basic rate rather than the higher rate. That is worth up to £51,000 a year. Given our concern for fairness, we believe—

[Mr Kevan Jones]

Are you going to stop it?

[Justine Greening]

We are proposing a different approach, which would address that very measure. The decision for the hon. Gentleman to take tonight is on whether people who are able to pay £100,000 to £200,000 a year into their pension fund should be able to get tax relief at the basic rate. That is the question for him to answer.