To ask Her Majesty’s Government, further to the Written Statement by the Chancellor of the Exchequer on 12 July (HCWS172) setting out the fiscal circumstances under which they will return to spending 0.7 per cent of Gross National Income on Overseas Development Assistance, as stipulated in the Official Development Assistance Target Act 2015, whether they intend to bring forward primary legislation in this area; and if not, why not.
My Lords, the Government remain committed to the International Development (Official Development Assistance Target) Act 2015 and to spending 0.7% of gross national income on official development assistance. The decisions taken are in line with the spirit and framework of the Act, which envisages situations in which departure from the 0.7% may be necessary. Yesterday’s vote provided the House of Commons with a further opportunity to consider the return to 0.7%. In the light of that and our continued commitment to the 2015 Act, there is no need to bring forward additional legislation.
I am afraid that that reply does not convince me. Surely the vote yesterday means that an Act of Parliament passed by both Houses has been overturned by a last-minute Motion passed by just one House, in spite of clear government commitments in November that they would bring forward proper legislation. I will make one short point: I hope the Minister recognises that the vote yesterday does not represent the view of this Parliament.
I gave noble Lords a sense of the key findings in my opening answer, but there are several others that I can make my noble friend aware of: for example, a task force led by the Treasury and the Bank of England to co-ordinate exploration of a potential UK central bank digital currency, and a new Bank of England account type that will allow innovative financial market infrastructures to provide enhanced wholesale payments and settlements. There are also the DIT initiatives that I mentioned earlier.
My Lords, the difference for the vast majority of traders between a deal and no deal is simply the level of tariffs that will have to be put into the HMRC and DIT systems. So their readiness needs to be at the same level, whether it is a deal or no deal.
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.
My Lords, quite a number of companies will make extraordinary profits as a consequence of Covid-19. At this point in time it is hard to identify which they are, but we can see that it is happening with some traders and private equity players, and it may well be happening in the digital industry, which is becoming more and more dominant and, as others have said, pays almost no tax in the UK despite the size of its presence. Following our exit from lockdown and the pandemic, will the Government look at a windfall tax so that those who have sacrificed during the pandemic understand that the burden is being spread over everyone’s shoulders?
I am sure that the noble Lord will contribute to the legislation when it comes through. I support his ideas. I assure noble Lords that we have closed the tax gap quite dramatically over the past 10 years. In 2005-06, it was £4.9 billion; in 2017-18, it was £1.8 billion. HMRC has won 90% of the avoidance cases that it has litigated on since 2018.
My Lords, I am very much aware of the urgency and speed with which these things need to be dealt. From midnight on 20 April, 185,000 businesses have claimed under the coronavirus job retention scheme to protect 1.3 million jobs, which totalled £1.5 billion. On the small business grant funding, as of 20 April around £6 billion had been paid out in grants, which is about half the total funding. Some 490,000 businesses have benefited—so the money is going out. I completely accept that it could go out quicker, but the rate of escalation is increasing.
My Lords, as noble Lords have made clear, there are significant gaps in the current scheme. My noble friend Lady Young asked about the numbers not covered by it. How many self-employed people will now see substantial reductions in their income as a result of not being covered by the existing scheme? Will the Minister consider additional measures to provide protection for them?
My Lords, as I mentioned earlier, we have pushed out some £6 billion of grant payments already, and when HMRC opened its Coronavirus Job Retention Scheme on 20 April some 185,000 claims had already been made. So the money is going out, but I accept that it needs to go out more quickly.