Economy: Government Policies

Debate between Lord Christopher and Lord Sassoon

Wednesday 7th December 2011 Lords Chamber

[Lord Sassoon]

No, my Lords, that is precisely not the conclusion from the IFS report. What the IFS report also pointed out was that Labour’s plans—the plans of Mr Alistair Darling in his March 2010 Budget—

“would, if [they] had been implemented, now of course have implied even higher debt levels over this parliament than those we will in fact see. That would have left an even bigger job to do in the next parliament”.

There would have been £100 billion of additional debt if we had followed Labour’s plans, and that was under Mr Darling. Mr Ed Balls has so far announced unfunded commitments of £91 billion a year—£326 billion of unfunded expenditure. Mr Ed Balls wishes to pave the road to Rome, if not to Athens.

[Lord Christopher]

My Lords, did not the Conservative Party embrace Labour’s spending plans?

[Lord Sassoon]

My Lords, what my right honourable friend the Chancellor said we would do is to stick precisely to the spending plans that he set out in the March Budget and the subsequent spending review. That is what we will do, and that is what will keep our interest rates low.

Banking: Royal Bank of Scotland

Debate between Lord Christopher and Lord Sassoon

Tuesday 1st February 2011 Lords Chamber

[Lord Sassoon]

My Lords, with regards to the proposed possible settlement with the banks in Project Merlin, discussions are ongoing with the intention of seeing that the banks pay smaller bonuses than they would otherwise; that they are more transparent about their pay; that they make a greater contribution to local communities and the regional economies; that they treat customers fairly; and that they lend, materially and verifiably, more than they were planning to the businesses of Britain—especially small and medium-sized enterprise—so that they can grow and create this year. If we do not get such a settlement, my right honourable friend the Chancellor has made it clear that nothing is off the table. As to the Independent Commission on Banking, it is an independent banking commission and it will do its own thing as it sees fit.

[Lord Christopher]

Will the Minister clarify one of his answers in relation to the amount that will come to the Treasury this year? Will he please explain how—and when—those bonuses that are paid in shares and in a new vehicle entitled “cocos” are taxed?

[Lord Sassoon]

My Lords, the tax rules around deferred compensation are complex and depend on the sort of instrument being paid. Some tax on certain instruments is levied up front and some is levied later, so it depends very much on the circumstances of the individual instrument and the taxpayer. But, of course, some tax might indeed be levied later on.

Housing: Shared Ownership

Debate between Lord Christopher and Lord Sassoon

Monday 25th October 2010 Lords Chamber

[Lord Sassoon]

My Lords, questions about what people can afford to pay are essentially for the mortgage provider to judge in the context of its commercial decisions, made within the responsible lending guidelines set down by the FSA.

[Lord Christopher]

My Lords, can the Minister offer a view on why equity release schemes should be regarded as sub-prime mortgages? I should have thought that such arrangements were highly desirable, given the age distribution that we face.

[Lord Sassoon]

My Lords, I regret that I am not going to be drawn into making judgments which are for the financial regulators to make.

Public Expenditure: Review of Commitments

Debate between Lord Christopher and Lord Sassoon

Thursday 17th June 2010 Lords Chamber

[Lord Christopher]

My Lords, picking up on the point made by my noble friend Lady Farrington, the Minister indicated that the Government are now heavily relying on private investment in projects that have been dropped. My noble friend mentioned Sheffield Forgemasters, about which we have been given little information, but if you are going to rely on the private sector in that area, you are certainly seeking to whip a dead horse. The private sector has not contributed to any significant degree in the specialist steels required in the nuclear industry, in which I have had a past interest; it was deplorable to me to see how much steel was being imported in order for us even to maintain and expand what we had in the nuclear industry. Does the Minister agree that it is right that the public should know how much the Government expect to expend in importing steel instead of making it, how many jobs might have been created that will not now be created, what will be the loss to the local community because this is not being proceeded with and—to take up the point made by the noble Lord, Lord Higgins—whether this decision makes any sense, as the money was going out not this year or next year but progressively over a considerable period?

[Lord Sassoon]

I thank the noble Lord, but it would be wrong to call Sheffield Forgemasters a dead horse, which I think I heard him say. Sheffield Forgemasters makes some of the largest forgings—

[Lord Christopher]

I did not say that. I said that if you were to rely on the private sector to fill the gap that you have now created, you would be flogging a dead horse. History shows that to be a reasonable point of view.

[Lord Sassoon]

I am grateful for that clarification. However, given that Sheffield Forgemasters is one of the very few firms in the world capable of making the largest forgings required to supply critical components to the civil nuclear industry, there is every expectation that there may be a private sector solution out there. I stress the broader point about jobs: we need to underpin the economy on a firm foundation, where the private sector can go forward and create the jobs that we need, whether in steel or many other industries.

Banking Reform

Debate between Lord Christopher and Lord Sassoon

Thursday 17th June 2010 Lords Chamber

[Lord Sassoon]

I ask the noble Lord, Lord Haskel, to be patient with us and, as we get into the detailed design, to see how we deal with all these matters. I take his point that this is another thing that needs to be addressed in the detail of the proposals.

[Lord Christopher]

My Lords, I apologise to the Minister in advance; I did not register his reply to one of my noble friend Lord Eatwell’s points. Has there been a risk assessment of this, and if there has, is it to be published? It is relevant that there should be one because, as I understand it, nowhere in the world is there a model like the one that is now being created from which we can draw any experience at all. I remind him that the Financial Services Authority requires financial services companies not only to have regularly revised risk assessment reports but to have plans B, C, D and E in the event that the risks appear to be too great.

We have talked about the top brass, but no one has mentioned the staff. Is it going to be an easy matter to integrate them? What discussions will be taking place with them?

[Lord Sassoon]

The noble Lord enables me to repeat again, for the avoidance of doubt, that we will publish a detailed policy document before the Summer Recess that will include a regulatory impact assessment in the normal way. In preparing the plans for the transition and for the regime thereafter, alternative scenarios have already been, and will continue to be, thought about.

The noble Lord makes an important point about the staff of the FSA. I should take the opportunity to say that the staff of the FSA and of the Bank of England have done an extraordinary job through the very tough conditions of the past few years. I know that the management, led through the transition by Hector Sants and Andrew Bailey on the two sides, are seized of the need to keep the staff fully informed of the transition arrangements, and the noble Lord’s point is well taken.

Individual Savings Accounts

Debate between Lord Christopher and Lord Sassoon

Wednesday 9th June 2010 Lords Chamber

[Lord Sassoon]

I wish I could say “in due course” in another way. However, I can only reconfirm my previous Answer.

[Lord Christopher]

My Lords, I declare an interest as chairman of a small investment management company that markets ISAs. Does the Minister agree that there is another side to the growth coin—the risk to potential investors? The number of people who invest today without really understanding what they are doing is extremely worrying. We have seen plenty of examples of irresponsible marketing and I hope that the Minister will take into account the views of the FSA on risk, which should be made clear to potential investors.

[Lord Sassoon]

I am grateful to the noble Lord for pointing this out. When ISAs were introduced in 1999, they were intended to be for mainstream investment products so that they would be well regulated and investors would be protected from too much risk as well as having easy access. I take the noble Lord’s point.