Barnett Formula

Debate between Lord Anderson of Swansea and Lord Newby

Monday 3rd November 2014 Lords Chamber

[Lord Newby]

Yes, my Lords, but the Barnett formula is the opposite of most government policies, which do not survive very long. His has survived a lot longer than anybody ever envisaged.

[Lord Anderson of Swansea (Lab)]

My Lords, I join the tributes to my noble friend Lord Barnett.

Does the Minister agree that the problem is not in the formula itself? The grievance, as seen in Wales, is the lack of fair funding. When the Government look at the totality of relations with Wales, perhaps avoiding the straitjacket of the formula, would they consider a multitude of matters, including for example helping Wales by abolishing the tolls on the Severn bridges, which amount now to a tax on the people of Wales?

[Lord Newby]

My Lords, the Barnett formula is a bit like the Schleswig-Holstein problem. Virtually nobody understands how we got to where we are today. The key question is how much money makes its way to Wales. As I said earlier, for the period ahead Wales will receive a figure in line with most definitions, I believe, of what people think is fair.

Finance: Fiscal Devolution

Debate between Lord Anderson of Swansea and Lord Newby

Wednesday 9th July 2014 Lords Chamber

[Lord Newby]

I am afraid that there has been a very chequered history of attempts to devolve power—within England, at least. This Government, by devolving half the income generated by business rates, have begun a process. The growth deals announced at the beginning of this week—under which, over a period, £12 billion will be devolved to local enterprise partnerships, whereas it would otherwise have been administered by central government departments—is a big move towards greater devolution. I suspect that in the next Parliament there will be much more pressure to do more.

[Lord Anderson of Swansea (Lab)]

My Lords, if London benefits with its high property values and other advantages, does that not inevitably mean that other parts of the UK will not benefit? How does one prevent that sort of fiscal competition, which surely cannot be to the benefit of less favoured areas?

[Lord Newby]

My Lords, the principle that operates if one is devolving tax revenue to a lower tier of government is that the amount of tax devolved is subtracted from the amount of grant which that tier of government would otherwise be getting. Therefore, at the start of the process at least, there is no net shift of revenue from one area to another.

Taxation: Rental Income

Debate between Lord Anderson of Swansea and Lord Newby

Tuesday 3rd December 2013 Lords Chamber

[Lord Newby]

My Lords, I am sure that the whole House knows that the Liberal Democrats are in favour of a mansion tax. I remind the House that, in the recent Budget, the Government introduced an annual tax on high-value dwellings—so-called enveloped dwellings —owned by companies, which will generate from £15,000 a year for properties worth between £2 million and £5 million to £140,000 a year for properties worth more than £20 million.

[Lord Anderson of Swansea (Lab)]

My Lords, what advice is given to our local authorities to ensure that, when housing benefit is paid, the recipient landlord pays UK income tax?

[Lord Newby]

I do not know the strict answer to that question, but HMRC makes strong efforts to bring home to everybody who should be paying tax that they should be doing that, which is why the Government have put in almost an extra £1 billion a year towards tackling tax avoidance and evasion.

Welsh Government: Comprehensive Spending Review

Debate between Lord Anderson of Swansea and Lord Newby

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.