Tax Avoidance

Debate between Lord Agnew of Oulton and Baroness Falkner of Margravine

Wednesday 29th April 2020 Lords Chamber

[Lord Agnew of Oulton]

I assure the noble Lord that all these things are continuously under review. As I mentioned briefly in the previous Question, we have introduced in days things that could often take years, so by definition we are keeping a very careful eye on them. To give the noble Lord some reassurance, with most of these loan schemes, businesses have to show that they are viable, and if they are going to continue to pay dividends the banks will take a view on that and decide whether it is appropriate. These are not automatic entitlements; they have to be justified.

[Baroness Falkner of Margravine (Non-Afl)]

My Lords, I declare my interest related to the Bank of England, as set out in the register. The Minister referred to the plethora of regulation and law that came in in the period after 2008-09, but he will recall that the bankers who were bailed out paid themselves excessive bonuses and therefore suffered in the court of public opinion. Will the Government go a little further and at least publish the list of companies that are benefiting from all kinds of taxpayer support on offer this time, so that we can see who is benefiting from it in a transparent manner? Where the Government give support to those companies, will they at least require an equity holding as collateral and preferably give only loans, not grants?

[Lord Agnew of Oulton]

The noble Baroness makes very good points, and I will certainly take her ideas back to the Treasury. We also ought to acknowledge that a number of senior managers have announced pay cuts during this difficult time. Our overall macro concern at the moment is to protect businesses and employment and to make sure that we can bounce back as quickly as possible from this crisis, but I take on board her helpful comments.

Economy: Update

Debate between Lord Agnew of Oulton and Baroness Falkner of Margravine

Tuesday 28th April 2020 Lords Chamber

[Lord Agnew of Oulton]

The noble Lord is a little harsh on the banks. I accept that there was some bad practice in the lead-up to the crash 12 years ago, but there have been dramatic changes in governance and lending practices since then. There is also a levy on banking profits, which goes some way to deal with the issue that he just raised. I genuinely believe that any slowness in getting these loans processed at the moment is not through any intent on their part but that they have had to completely overhaul their lending systems to react at the speed at which we expect them to. However, I am always open to hear any examples of bad practice, and if my noble friend would like to write to me, I give my assurance that I will follow it up.

[Baroness Falkner of Margravine (Non-Afl)]

My question concerns universities and support for the higher education sector, and I refer to my interests as set out in the register. I accept that, as the noble Lord has said, not every business can be saved, but universities are not traditional businesses. However, they are absolutely fundamental to our long-term recovery as we try to climb out of this deep recession. Universities are going through a short-term demand-side shock due to the collapse in international student numbers. We have been hearing in the media that the Treasury is unconvinced about providing support for them, but I would say to the Minister that it needs to hold urgent talks because they are also fundamental to their location—to their places and to their areas. The impact of universities going bankrupt will be profound across the community. Will he undertake to ensure that the Treasury takes a look at the proposal put forward by Universities UK, that conditional though it might be, that support is essential?

[Lord Agnew of Oulton]

The noble Baroness is right to say that universities play an extremely important part both in our society and in our economy, but it is worth reassuring her that they are eligible in aggregate, as business in their own right, for some £700 million-worth of coronavirus support. That support is available to them now. Very active discussions are going on, particularly about the loss of foreign students, because of course they pay a higher tariff and thus have in the past provided good cash flow for universities. It is worth making the point that universities have always been jealous of their independence, and if they need government support now, I hope that there will be a bit of humility on the part of those vice-chancellors who take very large salaries from their organisations. I would expect there to be some conversation about that if there is to be any support.