Financial Markets: Stability

Lord Campbell-Savours Excerpts

Thursday 3rd November 2022 Lords Chamber

[Lord Campbell-Savours (Lab) [V]]

My Lords, following the excellent speeches from the noble Lords, Lord Young of Cookham and Lord Best, I will concentrate my remarks on the narrow issue of housing and the instability in the housing and rental markets arising from the crisis brought on by the war in Ukraine. That war, with its consequences worldwide, is undermining housing markets across Europe, with escalating interest rates and a drop in construction activity. In London there is a particular crisis: Foxtons and Chestertons are reporting between 20 and 30 applicants for each rental property, with supply at an eight-year low.

Escalating rents are driving desperate prospective tenants into offering 12-month upfront rental payments. With thousands of new builds on hold, a Budget forcing up interest rates on mortgages—topping 6%—and escalating building costs, we have a real crisis in the making. This is all against the background of the Bank of England’s statutory objective to

“protect and enhance the stability of the financial system”.

We all know what that means for those who lack resources and buying power. Those with resources will see savings increase in cash terms, while those without will really suffer as they service their borrowings. Of course, all lose in conditions where inflation bites into savings.

Faced with rising mortgage costs, landlords are responding, often erratically, in defence of their business models. On the one hand, they have rising mortgage costs, and on the other hand the problem of affordability by tenants. Faced with escalating mortgages, some landlords are pulling out of the rental market. There are reports that the number of properties available for rent in quarter 1 of 2022 was down a third from the pre-pandemic five-year average—all at a time when demand from new tenants is rising and existing tenants are struggling against demands by landlords for increased rents. In June, the BBC reported on tenants’ bidding wars, with renters under 30 spending 30% of their income on rents, and Shelter’s August survey found that 32% of private renters spend at least half their monthly income on rent—and this was all before the consequences of the disastrous Kwarteng-Truss Budget measures, with their ruinous effects on interest rates.

One of the consequences of the most recent escalation in interest rates is deeply worrying. My contacts in the housing market talk of huge increases in rents being sought from tenants who, on pleading an inability to pay increased rents, are being evicted or pushed to leave, some under the provisions in Section 21 of the Housing Act 1988. This brutal section enables private landlords to repossess properties from assured shorthold tenants without having to establish fault on the part of the tenant.

In April 2019, the Government announced the repeal of Section 21, and the Conservative manifesto equally promised repeal and a better deal for renters. In this year’s Queen’s Speech, the Government announced the “renters’ reform Bill”, and its accompanying White Paper proposed abolishing Section 21 evictions—all good news. However, we now hear some ambiguity in recent statements from Commons Ministers about the timetable of the legislation. Whereas originally it was to be introduced

“in the 2022-23 parliamentary session”,

it is now

“in the course of this Parliament.”—[Official Report, Commons, 17/10/22; col. 355.]

Meanwhile, insecurity of tenure and potential evictions can proceed. Renters in this volatile market need urgent action. They need protection now, not delay. The crisis requires early action, and the Government need to respond. I appeal to the Government to introduce legislation as a matter of priority. Landlords cannot always be relied on to act sensitively.

I want to repeat a question I asked earlier this year, and again ask the Minister to consider my suggestion that

“with vulnerable, low-income elderly groups in this highly inflationary period facing unaffordable, escalating service charges and possible loss or even forfeiture of their homes, why not promote or sponsor a national scheme for elderly leaseholders that rolls up service charges in the form of a debenture against property title—effectively a rising legal charge? The debenture holder would pay the service charge on behalf of the resident, and then claw back payments—interest-serviced or otherwise—on death or even before.”—[Official Report, 20/6/22; col. 12.]

I have not been informed that there is work going on in the department. I hope that the Minister can take my suggestion away and consider it, because there is a real problem developing in this area of housing policy.

Crown Estate Transfer Scheme 2017

Lord Campbell-Savours Excerpts

Thursday 23rd March 2017 Lords Chamber

[Baroness Neville-Rolfe]

I am grateful to so many noble Lords for taking an interest in this important order. Again, I apologise for not being able to answer every question due to the difficulties that our officials have had getting into our House, which I fear may be a problem for a day or two.

I think there is general agreement on the usefulness and timeliness of this order, which follows on from the Smith report and many hours of constructive debate in this House. It was good to hear the noble and learned Lord, Lord Wallace of Tankerness, express his general satisfaction. I will agree to check on the latest position relating to the conversations that my noble friend Lord Dunlop has had with the Scottish Government, and write to noble Lords with an interest.

The noble Lord, Lord Adonis, has asked me quite a detailed question about exactly how finances work. I would prefer to take advice and write to him with a proper answer on that.

[Lord Campbell-Savours (Lab)]

To all of us.

[Baroness Neville-Rolfe]

To all noble Lords, of course.

Taxation: Income Tax Threshold

Lord Campbell-Savours Excerpts

Wednesday 16th March 2016 Lords Chamber

[Lord O'Neill of Gatley]

My Lords, I welcome my noble friend’s phraseology. From October 2016, the new national minimum wage rate will mean a pay rise of up to £450 a year for nearly half a million young workers. The Government will increase the main national minimum wage rate to £6.95, 25p more than the current rate. This is the largest increase since 2008 in cash terms. It is expected to reach its highest level ever in real terms, surpassing its pre-recession peak.

[Lord Campbell-Savours (Lab)]

On the question of the tax take, why did the Chancellor not deal with personal service companies today?

[Lord O'Neill of Gatley]

I anticipated that a number of things might be asked at this session so shortly after the Budget had been announced, and I encourage many noble Lords, if they have the chance before next week’s debate, to read the Red Book. They will then be more aware of the real details of what has been announced, including, I think, something in this area.

Spending Review and Autumn Statement

Lord Campbell-Savours Excerpts

Wednesday 25th November 2015 Lords Chamber

[Lord O'Neill of Gatley]

My Lords, on the second question, which I assume specifically refers to the so-called tampon tax, the Chancellor took great delight in announcing to the other place that a number of women’s charities would be direct beneficiaries of the money we accrued from the imposed tax from the EU. In the mean time, the Government will continue to debate the merits of that tax with the EU.

On the first question, as I touched on, the basis for the OBR’s improved forecast is of course the circular connection between the improvement in the economy—which I repeat that the OBR has become slightly more optimistic about—and the improved nominal GDP outlook for the rest of this Parliament, as well as tax revenues. That has given the flexibility for the Chancellor to commit—or recommit—to the mandate that the Government successfully achieved from the electorate to reduce the level of debt and to move towards a fiscal surplus, while choosing various priorities in domestic spending. Indeed, it is that economic success that has been so helpful in giving the flexibility highlighted in today’s policies.

[Lord Campbell-Savours (Lab)]

My Lords, I take the noble Lord back to the £12 billion figure, tax credits and his explanation that the relevant sum would be covered by migration—I think that was the term he used—to universal credit. Is he saying that the whole of the £12 billion will be covered by that migration or will there be additional benefit cuts in other areas? If there are to be additional benefit cuts, when will they be announced?

Greece

Lord Campbell-Savours Excerpts

Monday 6th July 2015 Lords Chamber

[Lord O’Neill of Gatley]

My Lords, Greece has already missed a payment to the IMF, as everybody knows, and has fallen into arrears with the fund, which is not technically a default. The IMF has said that its shareholders will not suffer losses, saying:

“Notwithstanding the overdue obligations, member countries’ claims on the IMF are fully secure and the IMF will continue to meet its obligations to members and lenders”.

Greece has, of course, an existing IMF programme and it is important that future support for Greece helps it to meet the conditions necessary to continue with that programme, including the agreements of conditionality, sufficient financing assurances and the clearance of any arrears.

[Lord Campbell-Savours (Lab)]

My Lords, we cannot do very much because we are not in the euro but there is some way in which we can help. There is a crisis in hospitals in Greece. Equipment is breaking and there is a lack of medicines and equipment for treating ill people. Can we do anything to help on a humanitarian basis?

[Lord O’Neill of Gatley]

My Lords, let me reassure Members of this House that—as I said in my prepared comments and in repeating my right honourable friend the Chancellor’s Statement—we will do whatever is possible to make sure that any tourists or businesses going to Greece get the right guidance and advice. As to the issues on the ground for the Greek people, raised in the noble Lord’s question, we will be looking for further updated guidance over coming days, pending how the discussions go tonight and tomorrow on the financial and economic relationship between Greece and the rest of the eurozone. But, of course, we would all like to think that we will try whatever is within our means to help the Greek people in potentially challenging circumstances if they were to deteriorate further.

Banking System

Lord Campbell-Savours Excerpts

Monday 9th February 2015 Lords Chamber

[Lord Newby]

My Lords, I think that all those involved in banking before the crash adopted laxer standards than they now accept are necessary. I know from discussions that I have had with senior representatives of HSBC before today that the new regulatory regime is far more intrusive and has been forcing them to address the way they do business in a manner which I am sure all noble Lords will welcome.

[Lord Campbell-Savours (Lab)]

My Lords, should not those who ran HSBC when it was selling tax evasion packages be held to account? By whom should they be held to account?

[Lord Newby]

My Lords, there are several elements of holding people to account. I think the shareholders need to hold them to account. If there has been any criminal wrongdoing it is obviously for the police and prosecuting authorities in the relevant jurisdictions to pursue those matters.

Assisted Dying Bill [HL]

Lord Campbell-Savours Excerpts

Friday 7th November 2014 Lords Chamber

[Lord Campbell-Savours (Lab)]

My Lords, this issue is for me very personal. I have deep sympathy with those who are standing outside Parliament today, demonstrating on this issue, and with the millions of people who also feel strongly about it, many thousands of whom have written to Members of this House over recent weeks. I want to explain why this issue is very personal. I have now been ill for 31 years, and I have struggled on many occasions to survive different operations. Only last week I spent another week in hospital. Whereas five or 10 years ago I was opposed to assisted dying, I now realise that some people desperately want out. They want to leave the world. That has never crossed my mind but one day it might, and I want that right. To be frank, I do not want the courts to interfere in it. The courts will create congestion in the system which people want to avoid.

I also recognise that something is missing in the Bill to cover the issue of duress and coercion, which have been referred to by a number of noble Lords. We have to add something to the Bill to reassure people that that matter can be dealt with. I would go down the route referred to by the noble Lord on the Liberal Democrat Benches—forgive me, my memory is not too good at the moment—who referred to an alternative to court proceedings. We need a panel, perhaps comprising community-based guardians. I do not know whether they should be elected or appointed, or how they should be appointed if they are to be appointed, but they should be people who are capable of handling these sensitive situations. They need not necessarily receive a professional remuneration but they should be able to talk to people who have taken this decision. If, having talked to those involved, these people are uneasy, they should be able to instigate a further hearing of the issues, not necessarily in a court of law but in some forum. I say that because I am concerned that medical practitioners, whether the attending medical practitioner or the independent medical practitioner, may simply not have the time to sit down and ask the detailed questions that are necessary to secure the information to meet the criterion set out in the Bill.

When you are lying in a hospital bed—I have done it dozens of times over many years—you hear the conversations with doctors. They are going on around you all the time when they do their rounds in the morning or when they come back if there is a problem on the ward. I simply cannot imagine the circumstances in which doctors would be able to sit down and have that very meaningful, subtle conversation that can dig out the truth behind a particular application or declaration made by the person involved.

I therefore say to the House: please do not go down this judicial route; find another way of sensitively seeking to establish where the truth lies. If we do that, we will meet the objectives and concerns of all those outside who are basically worried that the Bill is going to be killed by the House of Lords because people have put up so many obstacles and amendments to wreck it. It would be a tragic day if that were to happen.

[Lord Howard of Lympne (Con)]

My Lords, I declare an interest as the chairman of Hospice UK, formerly Help the Hospices, which is the umbrella organisation for hospices in the United Kingdom. Hospice UK does not have a collective view on the principle behind the Bill, so everything that I might say in this debate is the view that I express personally, not the view of the organisation—although I hope that it is a view informed by the knowledge that I have acquired of the remarkable extent to which palliative care, an area in which we in this country lead the world, can alleviate the suffering, which is the backdrop to all the issues that we are discussing during the course of this debate.

I want to limit my brief remarks to the issues that arise in the context of the amendment. Palliative care is increasingly—not yet, alas, universally—available, but we are making good progress towards that objective. However, one of the problems that arise is that not everyone who could benefit from palliative care is aware that it is available. That has a direct bearing on the issues we are discussing and on these amendments. One of the things that it is vital to bring to the attention of someone who is contemplating the awful decision that the Bill makes possible is that they should be fully aware of the extent to which they could take advantage of palliative care to relieve their suffering.

In the context of these amendments, one of the factors that I would expect a court to take into account is the availability of palliative care for the person making the application, the extent to which that person knows about the availability of palliative care, and the extent to which that has been made available to the person concerned. I give way to the noble Lord.

National Minimum Wage

Lord Campbell-Savours Excerpts

Thursday 6th November 2014 Lords Chamber

[Lord Newby]

My Lords, I completely agree with my noble friend; the increase in the tax threshold has made a major impact on living standards. That is why real household disposable income, which is the key figure looking at living standards, increased by some 2.2% in quarter 2 2014, and why the OBR forecast that earnings will rise faster than inflation from the second half of this year for every year to 2018.

[Lord Campbell-Savours (Lab)]

My Lords, when the Labour Government introduced the national minimum wage in 1997, we were told that unemployment would go up. In fact employment went up. Why does the Minister think that employment went up when we introduced the national minimum wage?

[Lord Newby]

My Lords, there are a number of reasons. One was that it was introduced at a time when the economy was growing, which made it easier for people to pay higher wages. That is why I am so pleased that the economy is growing so strongly now, which means that wages are rising again.

Banks: Payment Protection Insurance

Lord Campbell-Savours Excerpts

Monday 13th January 2014 Lords Chamber

[Lord Newby]

My Lords, I think that all Members of your Lordships’ House will have had such telephone calls. I can reassure the noble Lord that the Government have acted in this area. During last year’s passage of the banking reform Act, we gave the claims management regulator the power to impose penalties on claims management companies which make speculative claims. We are also giving the regulator more enforcement staff and requiring claims management companies to pay for this extra effort.

[Lord Campbell-Savours (Lab)]

But they are still doing it.

[Lord Newby]

My Lords, every call made in respect of PPI is not necessarily inappropriate. Some are. Many people have used claims management companies because they did not feel confident going through the process themselves. I accept that there has been abuse. The key thing we have done is to give the regulator power to crack down on firms which make speculative claims to the banks when there is no justification for it.

Taxation: Rental Income

Lord Campbell-Savours Excerpts

Tuesday 3rd December 2013 Lords Chamber

Asked by

[Lord Campbell-Savours]

To ask Her Majesty’s Government what plans they have to ensure that taxation is paid on rental income on property owned by persons from overseas.

[Lord Newby (LD)]

My Lords, the Government believe that non-resident landlords should pay tax as appropriate, and HMRC operates a withholding scheme to ensure compliance. Tenants and letting agents are required to withhold and pay HMRC basic rate tax. Landlords whose UK tax affairs are up to date may apply not to have tax withheld and be automatically entered into self-assessment. Non-resident landlords in self-assessment are subject to HMRC’s usual rigorous compliance checks.

[Lord Campbell-Savours (Lab)]

My Lords, that only applies where a landlord uses an agent—I listened very carefully to the Minister’s response. How is it possible to quantify the scale of evasion on rental income without a means of establishing who owns what, what rents are paid, and to whom those rents are paid? Is there not a real need to establish a local authority-based national register of all domestic and overseas-based landlord rented-out property—a register that is accessible by HMRC? Is it not true that there is vast evasion in this area?