Corporation Tax (Northern Ireland) Bill

Lord Browne of Belmont Excerpts

Tuesday 17th March 2015 Lords Chamber

[Lord Browne of Belmont (DUP)]

My Lords, I congratulate my noble friend Lord Hay of Ballyore on an excellent maiden speech. During his long public service, he has continually sought to achieve consensus between the two communities in Northern Ireland and he has had a great deal of success in that. His fair-mindedness, negotiating skills and ability to remain calm when faced with adversity will enable him to make a useful contribution in this House.

I wholeheartedly support the Bill and it is fitting that it will complete its parliamentary stages on St Patrick’s Day. I am not suggesting that we will be celebrating the Bill in 1,000 years’ time, but it has the potential to transform Northern Ireland’s economy in the long term and to ensure a level of prosperity that the Province has not enjoyed before. Although today is the end of the parliamentary process, this is far from the end of the corporation tax story. To quote Sir Winston Churchill,

“this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning”.

Indeed, what a long beginning this has been. The campaign for the devolution of corporation tax for Northern Ireland in its present form dates back a decade. I thank the business groups that have supported the campaign to build a political consensus on this issue for many years. Their work helped to build support for corporation tax devolution not just among Northern Ireland’s politicians but among key Northern Ireland Office and Treasury Ministers. That support proved invaluable when difficult times came.

I pay particular tribute to Northern Ireland’s First Minister, Peter Robinson, who played a very significant role in championing this cause in the Northern Ireland Assembly. I also thank the present Government for taking the initiative on this and responding to the united political call from the Northern Ireland parties. I am sure that at times it would have been easier to accept the Treasury orthodoxy on such matters rather than to take a new policy initiative. Despite any doubts that it may have had, the same Treasury did not hesitate to commit itself to drawing up the Bill. I know that the policy of corporation tax devolution has not been enthusiastically supported by the Labour Party but I must acknowledge its role in ensuring the Bill’s smooth passage through Parliament.

Strictly speaking, the Bill does not devolve corporation tax powers to the Northern Ireland Assembly but allows the Assembly to set the Northern Ireland rate of corporation tax, with every other aspect of the regime remaining the responsibility of Her Majesty’s Revenue and Customs. That is why I think that those who have some concerns about the Bill on constitutional grounds are wrong. The Bill does not in any way undermine the union between Great Britain and Northern Ireland. Indeed, if this policy proves to be a success, it will mean that Northern Ireland will make an increased contribution to the United Kingdom economy. That can only be good for Northern Ireland in particular and for the United Kingdom as a whole.

There are others who argue that Northern Ireland will not reap the rewards of a lower rate of corporation tax but will pay too heavy a price in the reduction of public expenditure. Time does not allow for a comprehensive rebuttal of this argument but I will briefly make the following observations.

First, most economists agree that a reduction in the corporate tax rate is one of the most effective policy tools to achieve a rebalancing of the Northern Ireland economy towards the private sector, which in my view is an essential prerequisite for future economic prosperity. Convincing evidence is provided in a recent study by Ulster University’s Northern Ireland Centre for Economic Policy, which has estimated that the lowering of the corporation tax rate to 12.5% from April 2017 would result in the creation of 37,500 additional jobs by 2033. In simple terms, that means more jobs and better jobs. It means more money circulating in the local economy, and a higher standard of living and a better quality of life for everyone in Northern Ireland. In the longer term, it means that we have the capacity to fund public services at the level many of us would wish to see.

A lower rate of corporation tax is good not just for foreign direct investment but for our indigenous businesses. While a reduced level of corporation tax for Northern Ireland is not in itself a panacea for all our problems, the Bill as drafted provides useful safeguards on several technical issues. The separate arrangements for large companies and SMEs and the exclusion of profits from investment and certain other activities seem eminently sensible. This should discourage tax avoidance through brass-plating and encourage employment-creating trading activities and foreign direct investment.

Secondly, the experience of the Republic of Ireland would indicate that a lower level of corporation tax has been one of the key drivers of its economic success. It is no coincidence that, even at their lowest economic ebb, this is the one policy that the Republic of Ireland’s Government have refused to give up.

Thirdly, it must be recognised that this policy will involve difficult decisions about reductions in public expenditure. In my view, the Northern Ireland Executive will have to prioritise interdepartmental discussions to arrive at a budget agreement to facilitate the earliest possible implementation of the rate cut.

I do not pretend that significant issues and challenges do not remain, both in terms of agreeing all the final details and in relation to the other measures that the Northern Ireland Executive will have to put in place to ensure that the policy is a success. I am confident, however, that these challenges can be overcome.

After today, the next phase is the rollout of this power: it will pass to the Northern Ireland Executive to take forward. We now need the Executive to agree what the Northern Ireland corporation tax rate should be, from when it should apply and over what period it should remain in force. In these areas, with some compromise on all sides, I believe that agreement can be reached.

My party’s preference would have been for a 10% corporation tax rate, but it is prepared to go along with the emerging consensus that the rate should be 12.5%. The earliest possible date for the introduction of this rate is April 2017. Given that we have waited so long for this power, the rate should be introduced as soon as possible after that date. A quick decision will enable Invest Northern Ireland to go out and sell the policy to those investors for whom a low headline rate—

[Lord Trimble]

I thank the noble Lord for giving way. He is talking about the desire to have quick decisions on this. Did I miss something? Did I miss him saying when the implementation of the Stormont House agreement would be sorted out through fully providing for welfare reform and implementing it? I did not hear that.

[Lord Browne of Belmont]

I am saying that this cannot be implemented until all these things are sorted out.

Finally, I hope that there will be a political consensus that the lower corporation tax is not merely a short-term experiment but a policy that will be in place for many years. That is what is needed to give the long-term confidence to businesses and investors that Northern Ireland is the place to do business. The Bill will provide a sound basis for the development of a productive economy fit to survive in the very competitive global economy. It is a good example of positive co-operation between the Northern Ireland Executive and the Westminster Government and I trust that it will be one of many in the coming years.

Assisted Dying Bill [HL]

Lord Browne of Belmont Excerpts

Friday 7th November 2014 Lords Chamber

[Lord McColl of Dulwich]

My Lords, my first concern about the Bill is the risk that has been already mentioned —that one might create a society in which the vulnerable, the dependent and the weak believe that they have a duty to die. My second concern is the risk to the doctor-patient relationship and the fact that the current approach of the medical team is to care and never to kill or assist in killing.

I have therefore tabled Amendment 12 with the noble Lords, Lord Browne and Lord Morrow, to add two new subsections to Clause 1. The Explanatory Notes to the Bill say of Clause 1:

“This clause would enable a person who is terminally ill to request and be given assistance to end their own life. The process is dependent upon a request being made by the person concerned and no other person, including the patient’s doctor, family or partner would be able to initiate the process of requesting an assisted death”.

We agree that should the Bill become law, it should be the person himself or herself who is making the request. Indeed, the commission of the noble and learned Lord, Lord Falconer, said on page 29 of its report that,

“we do not envisage that it could ever be appropriate for health or social care professionals to offer assisted dying as an option; only the patients themselves should be able to initiate a conversation about assisted dying”.

On page 43 of the Explanatory Notes accompanying the draft Bill, published by the All-Party Parliamentary Group on Choice at the End of Life in partnership with Dignity in Dying, it states:

“While doctors would be free to discuss other aspects of end-of-life care, only the patient themselves could initiate a conversation about assisted dying–a doctor could not suggest it and a relative could not make the request to a doctor on behalf of the patient”.

I fully agree with the sentiment behind these statements, but as far as I can see, there is nothing in Clause 1 as currently drafted to prevent the doctor initiating the discussion with the patient. There is nothing in the Bill that sets out the safeguard that a doctor cannot suggest that a patient should consider assisted suicide or that a family member could not have an initial conversation with the doctor.

I am operating on the premise that everything is legal unless it is illegal. The claim that only the patient can initiate the process seems unsustainable. I am sure that there are noble Lords who think that I am scaremongering here. However, on the basis of what has happened in Oregon, it seems unrealistic to assume that a doctor will not suggest assisted suicide as an option if the law is changed. A letter from an Oregon resident in 2011 set out how she overheard her doctor suggesting assisted suicide to her husband. She said:

“When my husband was seriously ill several years ago, I collapsed in a half-exhausted heap in a chair once I got him into the doctor’s office, relieved that we were going to get badly needed help (or so I thought).

To my surprise and horror, during the exam I overheard the doctor giving my husband a sales pitch for assisted suicide. ‘Think of what it will spare your wife, we need to think of her’ he said”.

Such a suggestion from a doctor is bound to influence a patient’s thinking.

I am concerned about this change in the doctor-patient relationship from advocating positive treatment to suggesting to somebody that they end their life. As the noble and learned Lord, Lord Falconer, previously stated, suggestions of this kind should not occur. However, doctors may feel obliged to make such a suggestion to a patient if the Bill becomes law. When the National Council for Palliative Care gave evidence to a House of Lords Select Committee in 2005, it foresaw a situation where:

“Physicians will be under a professional duty to raise it as an option with their patients if they complain of suffering unbearably, as it will be considered to fall in the category of ‘best interests’”.

The fact is that assisted suicide has been integrated into medical practice in Oregon. For instance, patients have been refused chemotherapy by their insurance company, but offered assisted suicide because it was covered by their insurance plan. They tell me that everything to do with euthanasia and assisted suicide in Oregon is working well. They can tell that to the horse marines. I beg to move.

[Lord Browne of Belmont (DUP)]

My Lords, I rise to speak in favour of Amendment 12, which was tabled by the noble Lord, Lord McColl of Dulwich, and which I have co-signed. Amendment 12 would have the effect of adding two additional subsections to Clause 1. The first new subsection would ensure that only a person who is terminally ill may initiate a request for assistance to end their own life. The second new subsection would ensure that no medical professional can make a suggestion to an individual that they consider seeking to take their own life.

Like many in this House, I have always opposed a change in the law to allow for assisted dying. I understand the sincere motivations of those who desire to change the law and I have listened to the many eloquent speeches given by Peers from across the House in favour of the change. However, I have never been convinced by the idea that such a law would be the right way forward. I continue to believe, as I said at Second Reading, that this is not a path we should go down. Such a change would have a detrimental impact on the lives of some of the most vulnerable people living in the United Kingdom today, especially those who are disabled, who may feel under enormous strain to take their own lives, even if they do not want to do so.

To that end, I welcome the opportunity presented by this Committee and specifically by Amendment 12 to highlight the fundamental flaws in this legislation. Amendment 12 very effectively helps to highlight the failure of the Bill to guard against the very real possibility of people encouraging others to seek assisted dying. I find it quite extraordinary that those drafting the Bill failed to have regard for such basic, elementary dangers arising from the legislation. While I am sure that no Member of your Lordships’ House would countenance such a possibility, unfortunately human nature is such that we must all acknowledge the real possibility of some people encouraging others to end their lives for financial or other gain if the Bill becomes law.

To my mind, it is easy to envisage a scenario where a family member who would perhaps gain financially from the death of an elderly relative or who was tired of having to care for that person could initiate a request for assistance in ending the life of their relative. The person might not want to die but, on seeing that their relative wants them to end their life, they go along with it, perhaps because, as we have heard, they do not want to be a burden. I think that your Lordships will agree that such a scenario is not far-fetched.

The second new subsection proposed in Amendment 12 is also imperative. I am not a medical expert, as I know some noble Lords are, including the noble Lord, Lord McColl, but, as a layperson, when I listen to the opinion of my doctors, I trust their judgment. If a doctor tells me that I should take a particular medication or go forward for an operation, I will do so on the basis of their judgment, although obviously within reason. I believe that I am like many in our society in this respect. We trust medical professionals who look after our best interests, and they are in a position of significant influence as a consequence.

Under the Bill as it currently stands, it seems that it would be legal for a medical professional to suggest that a person considers the option of assisted dying. To my mind, that is deeply concerning. If a medical professional were to suggest to a terminally ill person that they should consider the option of assisted dying, this could have the effect of putting significant pressure on that person to take their own life. This would especially be the case if the patient was not medically informed or trained. If a trusted physician who had been caring for a terminally ill person and had forged a relationship with them was to tell them that they should consider the option of assisted dying or, indeed, if they were to go further and try to sell the idea, it would be easy to envisage a person in that vulnerable state being swayed by the view of the physician. This is not sheer conjecture about what might happen in a doctor’s surgery if the law were changed.

An article entitled “Oregon Physicians’ Attitudes About and Experiences With End-of-Life Care Since Passage of the Oregon Death with Dignity Act”, published by the Journal of the American Medical Association in May 2001, reported under the section on changes in clinical practice since the law in Oregon came into being:

“Six percent of physicians had initiated a discussion about physician-assisted suicide with a terminally ill patient, including 10% of physicians who opposed the law and 6% of physicians who supported the law”.

Human nature says that doctors will make suggestions to patients and that there will be relatives who discuss the option of assisted dying with a doctor. I believe that we should protect individuals at a time of vulnerability and not bring more pressure upon them. I support Amendment 12.

[Baroness O'Cathain (Con)]

My Lords, I wish to raise a point for clarification. Amendment 12 states:

“No registered medical practitioner, registered nurse or other health professional may suggest that a person consider seeking assistance to end his or her own life”.

It does not mention whether they are terminally ill. That means that anybody could say to a person with a chronic hearing problem or even dementia, “Why don’t you seek assistance to end your own life?”. That person would not necessarily be terminally ill. I just want clarification on that point in the amendment.

Northern Ireland: Illegal Petrol and Diesel

Lord Browne of Belmont Excerpts

Tuesday 15th July 2014 Lords Chamber

[Lord Browne of Belmont (DUP)]

HMRC figures confirm that in 2013-14 illicit fuel was identified at some 33 filling stations. Does the Minister agree that it would be helpful if HMRC would publish the names of the filling stations concerned so that law-abiding motorists could make an informed choice not to use them?

[Lord Newby]

The slight danger is that others might not, of course. The HMRC is looking at this issue. There is a legal problem at the moment. The legislation would allow naming and shaming to take place only above a certain financial threshold, which would not be met by some of these petrol stations, which are typically small and independently owned. There is also a bad faith test in the legislation so there would need to be a change in it, but HMRC is looking at that issue.

Northern Ireland: Corporation Tax

Lord Browne of Belmont Excerpts

Monday 18th March 2013 Lords Chamber

[Lord Newby]

My Lords, that is the reason why this has become such a big issue in Northern Ireland. The same considerations do not apply elsewhere in the United Kingdom, although I remind the House that the differential between the rate of corporation tax in Northern Ireland and the rate in the Republic of Ireland is now significantly less than it was when this Government came into office.

[Lord Browne of Belmont]

My Lords, will the Minister confirm that the Government will take steps to ensure that any reduction in corporation tax rates in Northern Ireland does not lead to a proliferation of artificial tax avoidance arrangements such as the manipulation of transfer prices and formation of shell companies, which could lead to a loss of tax revenue both in Northern Ireland and in the rest of the United Kingdom?

[Lord Newby]

My Lords, that is one of the issues which obviously has to be considered as part of this overall discussion. As the House knows, the Government take artificial tax avoidance schemes extremely seriously.

Finance Bill

Lord Browne of Belmont Excerpts

Monday 16th July 2012 Lords Chamber

[Lord Browne of Belmont]

My Lords, I spoke in this debate last year to express my concern that, despite numerous statements by the Prime Minister before and since the general election about the importance of recognising marriage in the tax system, nothing has happened. It is a great sadness to me that, one year on, that is still the case.

Let us be very clear: the commitment to recognise marriage was in the Conservative manifesto and made it into the coalition agreement, so it is not a policy that has been dropped because of the coalition. The Liberal Democrats have formally been given the right to abstain and, in embracing the coalition agreement, have consented to this. This should ensure a majority adequate to secure the passage of the measure, given that not only Conservative Members of another place will vote for the proposal. There is therefore no reason why the Government should not action their commitment and every reason why they must.

Of course I understand that the coalition agreement pertains to the period 2010-15, so I am not suggesting that the Government have reneged on their commitment. What I am saying is that, given the importance of this commitment, it is a great shame that it has not been given greater priority. Moreover, because of developments since 2010 and the time that it will take to introduce a transferable allowance, I consider that it is now imperative that the introduction of the allowance be made a top priority for 2013.

UK residents find themselves in a relatively unusual position. Only 20.9% of people living in OECD member states are subject to individual taxation without spousal allowances or credits. Most of these live in just two countries—the United Kingdom and Mexico. Among highly developed large economies, the UK is alone in operating a tax system that ignores spousal obligations.

Given that we fail to recognise marriage in the tax system, it is hardly surprising that many married couples in the UK are treated less well than they would be in other developed countries, on average. When the commitment to recognise marriage in the tax system through a transferable allowance was made in 2010, the latest available figures demonstrated that the tax burden on a one-earner married couple with two children and on average wage was 33% greater than the OECD average. Consequently, UK residents faced a greater disincentive to marriage than did most people living in the developed OECD world.

That is of importance for two reasons. The first is child development. The social science evidence is very clear: marriage provides a much more stable environment for child development than cohabitation, so there is no public policy merit in making it harder for people to marry here than in other developed countries. This is hugely important, because the evidence also shows clearly that children raised in stable two-parent homes do much better on average, according to every relevant benchmark, than children raised in single-parent homes. I do not say this to criticise in any way single parents, who for the most part do an excellent job in what sometimes are extremely difficult circumstances, and I believe that they deserve our full support. Rather, I say it because we need to ensure that public policy does not make it more difficult for couples who want to marry to do so in the UK than in other developed OECD countries. If we do not make this change, “broken Britain” should come as no surprise to us.

The second reason is choice. In approaching choice, I am aware that some people find the idea that fiscal policy has anything to do with marriage ridiculous. They assert that people get married for love and they give the impression that any reference to fiscal consideration in the context of marriage is somehow crass and insensitive. These people, who usually in my experience are very well off, make the basic mistake of confusing two different decisions. As I said in last year’s debate, of course people do not fall in love for fiscal reasons. However, when they fall in love and decide that they want to be together, they face a choice: do they marry or cohabit? It is in making that decision that fiscal considerations are very real, particularly if you are on a low to modest income. Statistics demonstrate that 90% of young people aspire to marry, so why then is the marriage rate at an all-time low and the cohabitation rate at an all-time high? Clearly, people have not stopped falling in love and deciding that they want to be together.

I do not want to suggest for a minute that increasing cohabitation is just, or even primarily, the result of fiscal policy—undoubtedly there are other significant cultural factors—but I suggest that fiscal policy is a contributory factor for the evident disconnect between the aspiration to marry and the level of marriages. The fact is that people in the UK fall in love and decide that they want to be together in a context where the option of marrying is more difficult than it is for most people living in the developed OECD world.

Bringing ourselves into line with international best practice and recognising marriage in the tax system will help to make it no more difficult for those who aspire to marry in the UK to do so than is the case for most OECD residents. Moreover, I contend that the case for recognising marriage in the tax system is even stronger today than it was in 2010. Analysis of the latest OECD figures carried out by CARE and presented in Taxation of Families 2010/11 reveals that a one-earner married couple with two children and an average wage now face a tax burden that is 52% greater than the OECD average, a significant increase on the 33% figure for 2010.

This deeply disturbing deterioration impels us to delay no longer the introduction of the transferable allowance. The Prime Minister, who has talked so much about supporting marriage, cannot allow a situation to develop in which the tax disincentives to marriage increase significantly under his premiership. He must ensure that, at least in terms of fiscal policy, it is no more difficult for couples to marry in the UK than it is across the OECD on average.

Before I conclude, I wish to touch on the extremely important subject of Her Majesty’s Revenue and Customs and the IT changes that will need to be implemented in order for the transferable allowance to be given effect. It has been suggested that it could take a year or more for HMRC to make the necessary changes. In the light of this, there are five key questions for the Minister.

First, has the Treasury asked HMRC to assess how long it will take to make the requisite IT changes to introduce the transferable allowance? Secondly, if the answer to the above question is yes, how long did HMRC estimate and, if the answer is no, will the Minister urgently ask them to make an estimate? Thirdly, has the Treasury instructed HMRC to start making the necessary IT changes to facilitate the introduction of the transferable allowance? Fourthly, if the answer to the third question is no, will he urgently ask HMRC to begin making the necessary IT changes? Fifthly, when do the Government intend to bring forward legislation to formally introduce the transferable allowance?

I look forward to the Minister’s reply. If he does not have all the information to hand today, I would be most grateful if he would write to me and place a copy of the letter in the House of Lords Library.

Ulster Bank

Lord Browne of Belmont Excerpts

Thursday 5th July 2012 Lords Chamber

[Lord Sassoon]

My Lords, we delude ourselves if we think that there will ever be a no-failure regime in financial regulation. Regrettably, issues will arise. We want the FSA to do what it is doing: not getting in the way but doing whatever it can to ensure that RBS solves the immediate problems. Then it will get the full explanation and, on the back of that, the lessons for all concerned, including, I am sure, the FSA, will be learnt.

[Lord Browne of Belmont]

My Lords, as normal banking facilities will not be available at branches of the Ulster Bank until 16 July at the earliest, and given that there are public holidays in Northern Ireland on 12 and 13 July, will the Government take steps to ensure that Ulster Bank branches remain open on those dates to enable customers to receive advice and to access banking services? I declare that I am a client of the Ulster Bank—one, I hope, of good standing.

[Lord Sassoon]

My Lords, I am aware that 42 Ulster Bank branches have extended their opening hours until 7 pm. I am aware, because I have checked, that the availability of the freephone number, which is available until 10 o’clock at night, has been widely publicised. I am not aware of what the bank intends to do on those bank holidays, but it will have heard the question.

Scotland Bill

Lord Browne of Belmont Excerpts

Thursday 15th March 2012 Lords Chamber

[Lord Forsyth of Drumlean]

I agree with the noble Lord that it would have been marvellous to have contributions from the noble Lords, Lord Butler and Lord Armstrong, but I should think they are probably making their cocoa and going to bed. The reason that we are not able to devote attention to these things is because we seem to be engaged in this sort of endurance exercise. I must say that carrying out this business, at this time of night, in this way, is the most persuasive argument I have heard for devolution since we started discussing the Bill.

[Lord Browne of Belmont]

I have no idea where distinguished Members of this House might be at this time of night—but, certainly, those who have sense are not here. My point is that this matter needs to be dealt with within the existing structures, in which we have had confidence for many years and which have been proof to these sorts of challenges in the past. Consequently—and I do not think that on this occasion my noble friend Lord Foulkes will be disappointed in me—I cannot support his amendment. However, the nature of the short debate that we have had has revealed the need for some broader discussion than we get in some newspapers in Scotland and some reassurance from the Civil Service itself that it will be able robustly to address these issues, or at least to explain in a persuasive way that the impartiality of the Civil Service has not been undermined.

Finally, I remind my noble friend Lord Foulkes of Cumnock of the debate on his Amendment 51, which sought to amend Clause 27 by constraining discussions between representatives of the devolved Administration —the Scottish Parliament and Scottish Government—and foreign Governments. He was, on that occasion, persuaded that the strictures that he was seeking to impose on the representatives of the Scottish Government could not have been policed and would not have been realistic. I suspect that if we had time to go over the criticisms of his current amendment, he would have come to that conclusion again. I just remind him of how he was persuaded by my noble and learned friend Lord Boyd on that occasion and trust he will get back into that state of mind when it comes to responding to this short debate.

[Lord Wallace of Tankerness]

Picking up where the noble Lord, Lord Browne, left off, to be fair the noble Lord, Lord Foulkes, did say in moving his amendment that perhaps it was not necessarily one that he would wish to push. He recognised too that there would be some occasions when it would be appropriate for civil servants in the Scottish Government to engage in issues that were reserved. Indeed, the noble Lord, Lord Sewel, highlighted the fact that with Section 30 orders—one of the early ones was on railways—that sort of engagement would not be unreasonable on that basis.

Nevertheless, the noble Lord, Lord Foulkes, has generated a debate which I am sure will be noted beyond the walls of this Chamber. I echo what was said by the noble Lord, Lord Browne, and my noble friend Lord Forsyth, about the very high quality of the Civil Service, which I have experienced as a Minister in the Scottish and United Kingdom Governments. We now have a position whereby a statutory basis for management of the Civil Service was set out in the Constitutional Reform and Governance Act 2010, an important measure. Civil servants working for the Scottish Government and the Welsh Assembly Government are all part of the United Kingdom Civil Service, and, crucially, the Civil Service Code forms part of civil servants’ terms and conditions of service. The code sets out the core values of integrity, honesty, objectivity and impartiality, and the standards of behaviour expected of civil servants. As the noble Lord, Lord O’Neill, observed, the continuity that civil servants have been able to bring, not least in times of uncertainty following the election in 2010, has been quite remarkable, and one pays tribute to them for that.

It is the job of civil servants to support the elected Government of the day, and the Civil Service Code recognises the fact that civil servants working for the Scottish Government and the Welsh Assembly Government are required to support those Governments. As the noble Lord, Lord Sewel, said, in the area of devolution tensions are inevitable. Likewise, civil servants working for the United Kingdom Government are able to advise their Ministers on matters which are the responsibility of other Governments. It is important that civil servants recognise their obligations under the code and support their Ministers to the best of their ability, even in politically sensitive areas, when Administrations have different policies and different priorities. They must ensure that they remain politically neutral and avoid public advocacy of political views.

In the points made by the noble Lord, Lord Sewel, he grasped the sensitivity of this issue and raised some important points that will not be resolved in this debate or this Bill but are important and have to be considered. I was thinking of an example whereby the Scottish Government have executive devolution responsibilities for renewable energy. Likewise, matters of transmission charges are a responsibility for the UK Government. But it would be very awkward if not impossible for the Scottish Government to make decisions on renewable energy without having some advice and support from their civil servants about implications for transmission charges, so it is not always easy to disentangle respective responsibilities.

Comment has been made on various issues that have been highlighted publicly. The noble Lord, Lord O’Neill, asked about the present Cabinet Secretary, who has been fully cited on these issues and has recently visited Scotland. I am advised that he reiterated that it was appropriate for United Kingdom civil servants to work to support their Ministers in pursuing their objectives, even though that may mean in an era of devolution the pursuit of a different policy aim when Administrations have different objectives. It is important to reiterate once again that one great strength of the Civil Service, which has come through in this debate, is that both of these things—objective support for Ministers and political impartiality—should be taken seriously.

I do not intend to comment on the specific wording used by Sir Peter in his recent communications to staff. Whether or not a particular civil servant has acted in accordance with the code is not ultimately a matter for Ministers to determine; it is an internal issue for the Civil Service, and it would be improper for me to go over that line. What is essential is that civil servants support their Ministers firmly within the parameters set by the Civil Service Code.

Finance (No. 3) Bill

Lord Browne of Belmont Excerpts

Monday 18th July 2011 Lords Chamber

[Lord Browne of Belmont]

My Lords, following on from the noble Lord, Lord Anderson, I, too, would like to express my concern that the Government are taking so long to honour their very important commitment to recognise marriage in the tax system. It was not that long ago that the Conservative Party, when in opposition, talked regularly about the problem of broken Britain, and they were absolutely right to do so. Of course, we do not hear that phrase on their lips very much now that they are in office. The truth is that no Government could sort out broken Britain in just over a year, and the problems of social breakdown remain as real today as ever.

One of the principal sources of that social breakdown is family breakdown, which has such devastating implications for child development. As a Minister said in a speech in February:

“The Centre for Social Justice has found that those not growing up in a two-parent family are 75 per cent more likely to fail at school, 70 per cent more likely to become addicted to drugs and 50 per cent more likely to have an alcohol problem. The Joseph Rowntree Foundation has found that children from separated families have a higher probability of living in poor housing and developing behavioural problems”.—[Official Report, 10/2/11; col. 389.]

They also suffer from a host of other damaging outcomes whose effects spill over to the rest of society.

What promotes couple stability? In engaging with this question, we must look at many factors, one of the most important of which, unsurprisingly, is the nature of the relationship between partners. In this regard, the research findings are very striking. If children are born to cohabiting parents, they have a nearly one in two chance of finding themselves in a one-parent family by the time they reach their fifth birthday, whereas those born to married parents have only a one in 12 chance of finding themselves in this situation.

I know that some will respond to this by saying that those who marry also tend to be wealthier, and that this is the real reason for their greater stability. Given that material need generates added pressure on relationships, it would be very strange if wealth were not a relevant consideration. The notion that it is the only relevant consideration, however, is rather odd. Mindful of this, it is no surprise to me that research demonstrates that the poorest 20 per cent who make a public “till death do us part” commitment in front of their families and friends are more stable than all but the 20 per cent richest cohabiting couples.

The truth is that marriage sealed by a public “till death do us part” pledge, rather than a “let’s move in together and see how it goes” commitment, is, unsurprisingly, an independent promoter of stability. In this context it is clear that, at the very least, the Government should do everything they can to develop public policy that does not make it more difficult for couples to marry in this country than in comparable countries. This is where our failure to recognise marriage in the tax system is so important.

In introducing the subject of marriage and tax, let me be clear from the outset that I do not believe that people fall in love, and then decide they want to be together for fiscal reasons. When they fall in love and decide that they want to be together, however, they face a choice: will they marry or will they cohabit? This is a very important decision, for the reasons we have considered, and it will inevitably be informed by all relevant considerations, including financial ones.

Britain used to recognise marriage in its tax system, but it has not done so since 1999-2000—unless those concerned were born before 1935, or one or both are blind. As CARE's latest international tax comparison—The Taxation of Families 2009/10—reveals, apart from Britain, just 18 per cent of citizens of OECD states live in countries that do not recognise marriage in their tax systems. The majority of these people live in just two states: Turkey and Mexico. We are completely out of line with the developed countries with which we are usually compared—for example, France, Germany, Japan, and the USA—in not recognising marriage. This inevitably makes it more difficult financially for couples in this country to choose to marry than in other developed countries. Indeed, if we look at the tax burden that they bear, it is a staggering 39 per cent greater than the OECD average. What really is concerning, however, is the fact that the latest projections suggest that the tax burden on such families will be more than 50 per cent greater than the OECD average by 2012-13—unless, of course, there is an offsetting measure such as recognition of marriage in the tax system.

One of the statistics that fascinates me is that, in the midst of all this, 90 per cent of young people say that they aspire to marry; and yet our marriage rates tell a very different story. Given that we make choosing to marry fiscally more difficult than in other OECD countries on average, the disconnection between the aspiration to marry and marriage is of no great surprise. Happily, the coalition agreement commitment provides us with the opportunity to change this and to ensure that it is no more difficult to marry in this country than in other developed countries such as France, Germany and America.

I am of course aware that recognising marriage in the tax system has cost implications, but these were considered at the time the commitment was made last year. Moreover, the very real costs associated with not recognising marriage are of great importance. The £550 million cost of the very modest partially transferable allowance proposed at the general election represents just 1.3 per cent of the direct costs of family breakdown, as calculated by the Relationships Foundation, and just 2.3 per cent of the costs of family breakdown, as calculated by the Centre for Social Justice. Moreover, it would cost just 4.4 per cent of what we are in the midst of paying to raise individual allowances to £10,000—the overall cost is estimated at approximately £12.5 billion. This is a policy that greatly benefits single people, and certainly does not benefit one-earner married families.

The Government were absolutely right to make provision for the commitment to recognise marriage in the tax system in the coalition agreement. We owe both the next generation, which would benefit from an increased chance of a two-parent home experience, and our young people who aspire to marry the opportunity to live in a country that does not make it more difficult than in comparable developed countries. In May, the Government were given a score of just two out of 10 in the Centre for Social Justice’s report card for their efforts to combat family breakdown—an extraordinarily poor result given the great emphasis the Conservatives placed on fixing the broken society before the election. I very much hope that the Minister will be able to assure us that things will be very different in the coming year, and that recognising marriage in the tax system will be a high priority.