Welsh Government: Comprehensive Spending Review

Lord Anderson of Swansea Excerpts

Thursday 4th July 2013 Lords Chamber

[Lord Newby]

My Lords, as the noble Lord said, the Welsh Government’s capital budget for 2015-16 will increase by 0.3% in real terms, but that is only part of the story in terms of government capital expenditure in Wales. As he knows, south Wales is set to benefit from the electrification of the main line to Swansea and of the valley lines. He will be aware also that the Government have committed to spending £0.25 billion on a major new prison in north Wales.

[Lord Anderson of Swansea]

My Lords, given the high dependence of Wales on public sector expenditure and public sector employment, what is the Government’s best estimate of the number of jobs in Wales which will be lost as a result of the review?

[Lord Newby]

My Lords, I do not think that it is a question of jobs being lost in terms of the review. As I said, the capital budget for Wales is increasing. The resource budget for Wales will fall only very marginally in cash terms, by 0.4%, which is significantly less than the cut in the non-protected budgets of departments in the UK.

Financial Services Bill

Lord Anderson of Swansea Excerpts

Tuesday 3rd July 2012 Lords Chamber

[Lord Eatwell]

Yes, indeed, my Lords, I can do that straightaway. Those terms refer to,

“drawing on the conclusions of UK and international regulatory and competition investigations into the LIBOR rate-setting process, consider what lessons are to be learnt from them in relation to transparency, conflicts of interest, culture and the professional standards”.

It is from them that lessons will be learnt—not from the wider characteristics of the industry; not from what the regulators were doing; not from the unintended consequences of the reforms of the 1980s; and not from the change in the nature and conglomeration of the banking industry. Lessons will not be learnt from any of those issues, which are much wider than those in the terms of reference. I am happy to provide the noble Lord with a copy.

[Lord Anderson of Swansea]

Has my noble friend considered the problems caused by the timetable set by the Government? If the proposed Joint Committee goes through the normal procedures, it will have to call for evidence. That process will take several weeks, which will eat up the rest of July until the Recess begins. This House does not return until the beginning of October. If the timetable is to end by Christmas, the committee will have to have several weeks prior to Christmas before the publication of its report, which essentially means that only the months of October and November will be available for its considerations. That would be a wholly impossible timetable.

[Lord Eatwell]

My noble friend has made an important point about the pressures that will be faced by Mr Wheatley’s committee and, if we may call it that, the Tyrie committee.

I do not want to delay the Committee. I have made two major arguments in favour of the amendments put before your Lordships. First, the terms of reference, to which the noble Lord, Lord Howard, has just referred, are too narrow. My Tyrie refers to them as “ring-fenced”. That is his expert view, which I accept. Secondly, we have to take this matter out of party politics. It was awful how yesterday’s discussions degenerated into a spat about which politician said what to whom and when, and who was responsible. That is not the issue; the issue is the future of our financial services industry. Let us get this matter out of party politics. I believe that I have heard around the Chamber support for the position that I have taken and therefore wish to test the opinion of the Committee.

Taxation: Plastic Bags

Lord Anderson of Swansea Excerpts

Monday 28th May 2012 Lords Chamber

[Lord Sassoon]

My Lords, I have learnt a lot about plastic bags over the past couple of days. As I am sure my noble friend knows, there is a voluntary scheme in this country which has reduced the use of single-use bags by some 45% across the UK. The first evidence of how the Welsh scheme, which started on 1 October last year, is doing will come out imminently. Scotland is about to issue a consultation document about possible charging for carrier bags which we will look at, and it is intended that the Northern Ireland scheme will come in in April 2013. I think it is as yet a little early to see what has happened in the devolved Administrations.

[Lord Anderson of Swansea]

The Minister says that it is a little early to see what has happened in the devolved Administrations, but surely the evidence from Wales is already clear. When one goes to a supermarket, one pays 5 pence for a plastic bag, and there has been a very substantial reduction in their purchase—I heard that it is 70% rather than 90%—as a result. Are we now in touch with the Welsh Assembly Government, who have got there first?

[Lord Sassoon]

My Lords, as I have said, we will look carefully at the evidence. The first official figures are due to be released shortly and we will see what they show.

Economy: Private Capital Investment

Lord Anderson of Swansea Excerpts

Tuesday 20th December 2011 Lords Chamber

[Lord Sassoon]

My Lords, that is a very interesting question. The board of RBS has made it clear that it is going to concentrate its business on its corporate and personal banking and therefore, certainly relative to its total business, it will indeed achieve that.

[Lord Anderson of Swansea]

My Lords, will the new enterprise zones be wholly or mainly limited to the manufacturing sector?

[Lord Sassoon]

My Lords, the enterprise zones are not limited to any particular sector.

Finance (No. 3) Bill

Lord Anderson of Swansea Excerpts

Monday 18th July 2011 Lords Chamber

[Lord Anderson of Swansea]

My Lords, I shall not add to the justified praise of the report prepared by the noble Lord, Lord MacGregor, and his committee, nor shall I contribute to the macroeconomic other debate which is taking place. First, it is with sincerity that I congratulate the noble Lord, Lord Magan, on his felicitous maiden speech. He clearly comes from a good stable, as he has said, from Ireland and from India. He has had over 50 years’ experience in the financial services industry and it clearly shows. I hope that that experience will be seen again in this House. It was a well-delivered, felicitous speech and I am sure that he will make a number of excellent contributions in that vein.

I shall not speak on the macroeconomic level but I shall deal with one corner of the canvas and ask the Government a number of questions on a matter which was raised in the course of the Bill’s progress through the other place. The Government responded with some positive noises but gave no firm conclusions on the timetable. I recall that in the other place much of the Finance Bill was consigned to Committee, where often it appeared to be accountants talking to accountants. However, beneath those dry as dust phrases, often there were real values. One such is the recognition of marriage in the tax system. Many commitments have been made by the Government—by the Prime Minister himself over a number of years in opposition and indeed in government—but there has been no actual result as yet. I hope that when the Minister replies—he is already sharpening his pencil—he will give a firm and clear commitment on how the Government will implement the many promises that have been made. I need not take him down the road in great detail, but I can quote seriatim a number of commitments made by the Prime Minister over the years. He said, for example,

“we will give a tax break for marriage and end the couple penalty”.

He said on another occasion:

“A Conservative Government will support marriage, through the tax and benefit system and remove the 'couple penalty' from the benefits system which will lift 300 000 children in two parent families out of poverty”.

Similar sentiments were expressed by Mr David Willetts and a number of other Members. Before the 2010 general election, there was great support for the measure. It was even made official Conservative Party policy and was put into the 2010 Conservative general election manifesto. A number of statements have been made by the Prime Minister since the general election, but action there has been none.

I think that it is generally accepted that marriage is of fundamental importance to a stable society; but, equally, marriage rates are at an all-time low in this country. Family breakdown is a major social and financial problem. One knows from surgery experience in the other place that most single parents do a great job in very difficult circumstances, but stability—or lack of it—does matter. On average, children brought up in married families do better than those in single-parent families by every significant measure—of educational achievement, health and propensity to commit crime. Even after discounting certain socioeconomic factors such as age, income, education and race, the fact remains that the poorest 20 per cent of married couples are more stable than all but the richest 20 per cent of cohabiting couples. It is therefore surely in the interests of society that, by the tax system and other mechanisms, any Government should do their best to encourage the institution of marriage and should in no way discourage marriage. It is then hardly surprising that, apart from Britain, only 18 per cent of people living in OECD countries are subject to a tax jurisdiction that does not recognise marriage in the taxation system; and the great majority of those thus excluded live in Turkey and Mexico.

Furthermore, the latest international tax comparisons show that the tax burden on one-earner married couples with children in the UK is nearly 40 per cent greater than the OECD average. What is worse is that, if all the tax and benefit changes in the Finance (No. 3) Bill and those proposed for 2012-13 are introduced, the burden is projected to increase to over 50 per cent of the OECD average. Therefore the indices are moving against the pledges made by the Government and are hardly consistent with the Government’s manifesto commitment. By contrast, the tax burden on single persons on the same wage is actually falling and is now below the OECD average. Clearly the UK is mightily out of step with the OECD majority.

I fully recognise that there are a number of mechanisms for encouraging marriage by tax incentives, including some relating to property. However, a transferable allowance is the main device debated, as in the UK the unused tax allowances cannot be currently transferred from a non-earning spouse to an earning spouse. Thus, depending on how it was introduced, it would be the whole allowance or part of it; whether it was limited to couples with children under a certain age or limited to tax at the basic rate, it is clearly important that this be considered seriously by the Government. Therefore, with one moving in the wrong direction from the OECD average, surely it means that the issue is both important and urgent. Unless action is taken, the easy slogans of the Government about making the UK the most family-friendly country in Europe will appear ridiculous.

I noted in the Centre for Social Justice report card published in May that the Government were given two out of 10 for their efforts to tackle family breakdown. Clearly, on the current projections, that will get even worse. So I am bound to ask, in conclusion, when in the circumstances the Government are planning to introduce the necessary budget resolution. Even if the Government, understandably perhaps, are reluctant to give a firm date for implementation, can the Minister in replying give your Lordships' House at the very least the assurance that preparatory work is already under way in the Treasury and HMRC? How long is this work likely to take? One hopes it is under way.

Surely, if there are no positive replies to these questions, in spite of the repeated assurances and grave commitments made by government spokesmen, both in opposition and in government, one is likely to conclude that they were empty words—and, as is often said by wags about US politics, electoral platforms are platforms to run on and not to stand on. Certainly the Government ran on this particular platform; it remains to be seen whether, over the next year or two, they will in fact stand on it.