Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015

Lord Cormack Excerpts

Monday 26th October 2015 Lords Chamber

[Baroness Manzoor (LD)]

My Lords, there has been a lot of discussion in the run-up to this debate about the role of this House in debating statutory instruments. I know that many noble Lords will wish to pick up on the constitutional role of the House. We have already started to see some of those points being made.

I do not discount the strength of feeling on the issue of whether this House should seek to reject the views of the elected Commons, but I want to be clear about what we are talking about today. We are talking about a measure that, according to the expert analysis of the Institute of Fiscal Studies, will hit 3 million low-income working families. These are people doing the right thing: going out to work and trying to make ends meet. They are exactly the kind of people whom the Government have said they want to help. Yet this change will have a seriously damaging impact on their ability to keep their heads above water. These families will, according to the IFS, lose an average of around £1,000 a year. For many people on low incomes, that will mean the difference between being able to continue to pay to heat their homes, pay their rent and feed their families and not being able to do so. In total, 4.9 million children will be directly affected by the change. Almost a quarter of single parents living in the UK will see their incomes cut.

Yet the Government continue to ignore the overwhelming consensus among charities such as the Children’s Society and Gingerbread—I could name many others, including taxation experts and even their own Children’s Commissioner—that these changes need to be reconsidered. It is no surprise that the Low Incomes Tax Reform Group—by no means a leftie organisation—has said that the impact of these changes,

“on the majority of tax credit claimants will be devastating”.

The problems with the Government’s proposals go far wider than those directly affected. They will also have a huge impact on the important principle—that this Government claim to support—that work should always pay more than a life on benefits. Evidence from the Social Market Foundation suggests that someone earning the average wage for those living in social housing of £8.08 an hour will see the benefits of earning wiped out almost entirely. Because of the way the so-called taper rate interacts with taper rates applied to other benefits including local Council Tax benefit, the marginal deduction rate—the rate at which benefits are withdrawn—will be 93%. That means that for every pound a person earns by going out to work—by taking on extra hours in order to improve their lives—they will keep only 7p.

Liberal Democrats in the coalition Government fought for universal credit. We fought alongside the Conservatives for the “make work pay” agenda. The Government’s proposals run utterly counter to this philosophy. Such a fundamental change in the Government’s approach should be challenged every step of the way.

[Lord Cormack (Con)]

My Lords, 104 years ago, a Liberal Government decided that this House should not have jurisdiction in budgetary matters. The noble Baroness speaks for a party which has a disproportionate strength in this House. She and her party believe in proportion. They also believe in the supremacy of the House of Commons. How does she square the various points I have just made with the speech that she is making and the vote that she is seeking tonight?

[Baroness Manzoor]

I thank the noble Lord for that intervention. I will come to that point and address it in the best way that I can.

I will pick up briefly on the speech made in moving the Government’s Motion by the Leader of the House. I do not discount her views but the overwhelming evidence is that these measures will do real damage.

However, I want to express my disappointment that this debate is not being led by the noble Lord, Lord O’Neill. This set of regulations relates to measures brought forward by the Treasury. It is right that such regulations should be promoted and defended by the Minister from the department responsible, whenever possible. As I said at the start of my speech, while much has been made of the constitutional issues surrounding the Motion, it is ultimately about the impact of the measures on the families affected. The Leader of the House does an excellent job in representing this House outside the Chamber, and in defending the Government’s position on the role of the House inside it, but this Motion is not about those things. It is about tax credit changes and it is reasonable for the House to expect the Treasury Minister to answer its concerns.

Fatal Motions on regulations should be used incredibly sparingly. I wish that we were not in this position but I cannot think of a better reason for this House to use such an option than the lives of 4.9 million children and the parents who go out to work to support them. I have tabled this fatal Motion for a simple reason: when all is said and done, and when the constitutional debate about the role of this House is over, I want to be able to go home this evening knowing that I have done everything I could to stop this wrong-headed and ill-thought through legislation, which will have such a damaging and devastating impact on millions of people’s lives.

We have a duty in this House to consider our constitutional role but we also have a duty to consider those affected by the decisions we make and the votes we cast. Were there another way for this House to reject this proposal and send it back to the Commons to reconsider, I would be all for doing so. Some people have said to me that this is a budgetary measure—indeed, the Leader of the House said so, too—and therefore not within our competence. Were that true, the Government had an opportunity to put these changes into the Finance Bill rather than to use an affirmative statutory instrument, a measure that this House is explicitly asked to consider and approve by the primary legislation from which it stems.

I have been told by many that a fatal Motion is too blunt an instrument. If that were the case then the Government could have placed this measure in the Welfare Reform and Work Bill, which is coming to your Lordships’ House in due course, giving this House the opportunity to amend the proposal and suggest alternatives, but they have chosen not to pursue that course either. So we are left with a statutory instrument, a tool designed for minor changes to processes and administration, being used to implement a substantial change in policy that will affect millions of people’s livelihoods. That is not my decision but I hope that we will do everything we can to stop it.

I want to turn briefly to the other Motions in the names of the noble Baronesses, Lady Meacher and Lady Hollis, and the right reverend Prelate. I am sure that they will speak on their own Motions in detail, so I do not want to dwell on them. However, to be clear, I support all those proposals. It is right that the Government should delay these measures to properly respond to the serious challenges put by the IFS, as the noble Baroness, Lady Meacher, suggests. It is also right that the Government should not make these changes unless there is transitional protection, as the noble Baroness, Lady Hollis, proposes. Fundamentally, however, these are sticking plasters on the wound. Transitional protection will help many of those who will see an immediate cut to their tax credits next April but would do nothing for those who become eligible for tax credits this time next year. If the Government succeed in meeting their employment target then we will see more people in part-time work, which is a great thing, but these people will need tax credits. If they meet their noble and worthy aim of increasing the number of disabled people in employment, that is likely to mean more people in flexible working arrangements whose income may need to be supplemented by tax credits. These people would not be protected by transitional protection. That is why, although I support and will vote for the amendment in the name of the noble Baroness, Lady Hollis, I believe that we need to go further.

I have no doubt that this House could spend many hours debating our constitutional role. I and all those on these Benches—

--- Later in debate ---

[Baroness Meacher]

None of those Motions was on the Budget. That is the constraint on this House as I understand it. Had these provisions been in the Budget they would have gone through the normal procedures and this House would have had a different role. That is the crucial point—here we are dealing with a statutory instrument.

There are four Motions on the Order Paper today. My Motion clearly leaves the matter in the hands of the elected House. The justification for a delay is that the House of Commons will have a full-day debate and a vote on these issues on Thursday. I understand that dozens of Conservative Back-Benchers are urging the Chancellor to adjust the tax credit reforms to protect the most vulnerable. Yes, there have been three votes on tax credits in the House of Commons, won by the Government. However, Conservative MPs—not me—say they did not have the information they needed when they voted for the cuts. I hear that many of them are now livid about this. The third vote was last Tuesday. Conservative MPs made it clear they wanted adjustments to the tax credit cuts but they kept their voting powder dry anticipating the vote next Thursday.

It is extraordinary that at least eight Conservative MPs—

[Lord Cormack]

My Lords, this just is not the case. The fact is that there was a vote in the other place last week. There was a clear majority and not a single Conservative Member voted in the sense the noble Baroness is indicating.

[Baroness Meacher]

I apologise to the noble Lord, whom I greatly respect, but I did not imply that the Conservative MPs had voted against the Government. I was saying quite clearly that they had not voted for an Opposition Motion; they kept their voting powder dry because they knew that a cross-party Motion was being considered on Thursday with a full day for debate and a vote. Even with a majority of 13 after the death of my former husband last week, this wipes out that majority.

Ukraine

Lord Cormack Excerpts

Monday 9th March 2015 Lords Chamber

[Lord Astor of Hever]

My Lords, I do recollect the point the noble Lord made, and I agree entirely with what he says.

[Lord Cormack (Con)]

My Lords, there may be a great deal to be said for speaking softly and carrying a big stick. However, does my noble friend agree that there is very little to be said for using a megaphone and carrying a tennis racquet?

Afghanistan: Interpreters

Lord Cormack Excerpts

Tuesday 10th December 2013 Lords Chamber

[Lord Astor of Hever]

My Lords, staff who have trod the ground with us, such as patrol interpreters and their FCO and DfID equivalents, have endured a level of danger over a sustained period, shoulder to shoulder with us in Helmand province. Their contribution to what we have been able to achieve there was made in a uniquely difficult and dangerous environment. We will not abandon them.

[Lord Cormack (Con)]

My Lords, will my noble friend place in the Library a detailed analysis of the comparative treatment by various countries? He says that it is broadly similar; many of us would like to see the details and the facts.

[Lord Astor of Hever]

My Lords, I am very happy to write to the noble Lord, Lord West, and put a copy of my letter in the Library.

Armed Forces: Military Corrective Training Centre

Lord Cormack Excerpts

Wednesday 25th July 2012 Lords Chamber

[Lord Astor of Hever]

My Lords, I am very sorry to disappoint the noble Lord but the answer is no. It has been the policy of successive Governments since 1963 that our Armed Forces are manned by volunteers. We have no shortage of applicants who have not committed any crime. In 1996, the Glasshouse was set up as a trial at MCTC for approximately 30 civilian young offenders aged 18 to 21. They underwent a military-style regime, including drill, physical training and room and kit inspections. In 1997 the Government ordered that young offenders tough enough to cope with this would be sent to MCTC, but the scheme was stopped in 1998. I understand that it was too expensive.

[Lord Cormack]

My Lords, there is so much sense in what the noble Lord, Lord Ramsbotham, said. Could not consideration be given to sending people from the Armed Forces to places such as the young offender institution at Brinsford in my former constituency? I am sure that many of those young people have given up hope. What they need is some discipline and some hope, and they could have those instilled in them at Colchester and elsewhere.

[Lord Astor of Hever]

My Lords, my noble friend makes a very good point. However, our primary objective is to have a professional, volunteer Armed Forces.

Armed Forces Bill

Lord Cormack Excerpts

Monday 10th October 2011 Lords Chamber

[Lord Newton of Braintree]

My Lords, I declare an interest in that I chair one of the honours committees within the mainline honours system, although happily it has nothing to do with this. However, because of my familiarity with that system and some of the problems that can arise between us and Commonwealth countries, I feel at least entitled to express the view that I cannot see a single good reason for allowing somebody to accept a medal and not be able to wear it. I can see circumstances in which you might refuse to allow them to accept a medal for whatever reason, but I cannot see how you can say, “You can have this medal but you must never put it on”. I think this needs looking at.

[Lord Cormack]

My Lords, I am afraid I have disobeyed my late great friend Lord Weatherill who said, “If you are at all in doubt do not listen to the debate”. I have listened to the debate and I entirely agree with my noble friend Lord Newton. It really is nonsense. I am actually standing before your Lordships wearing a decoration—Commander of the Order of the Lion of Finland. When I received it for services which do not begin to compare with the bravery that the people we are talking of displayed in the Malaysian jungles, I received a letter from the Queen’s private secretary giving me unrestricted permission to wear it whenever I wished to. It seems a total nonsense to give permission to these brave people to accept this medal and then to say, “But you cannot wear it”. There is no logic in that argument whatever and I hope that my noble friend who will be replying to this debate—for whom I, too, have very real regard and respect—if he cannot give the logical answer will say that we ought to let Parliament make up its mind to allow these brave veterans, most of whom are very old people now, to enjoy at least one Remembrance Day where they can wear this decoration of which they are rightly proud.

[Lord Palmer of Childs Hill]

My Lords, I rise as someone with no military medals, though my late father had some. I find it incomprehensible that we are not proud that service people fighting for this country were awarded medals by one of our Commonwealth nations. If we are proud that they should be awarded such medals, why should they not be allowed to wear them? It seems incomprehensible that they are not. We talk in your Lordships' House about the cost of this and the cost of that—I was told that the cost of national defence medals would be higher than I imagined—but the cost of doing this is nothing other than perhaps a dent in some civil servant’s pride. There is no reason why this House should not encourage the Government to allow people to wear medals such as the PJM medal.

Having been awarded a medal from a Commonwealth country, the recipient does not have to wear it. There is no saying that if you have received a medal from a Commonwealth country of which you might, for current reasons, disapprove you have to wear it, but the idea that you cannot wear it seems anathema.

The Bill has to go to the other place. It is not on this one amendment that it may ping-pong. Therefore, contrary to my normal loyalties to the coalition, I will vote with the noble, valiant Lords in favour of the amendment.

Nuclear Deterrent

Lord Cormack Excerpts

Wednesday 18th May 2011 Lords Chamber

[Lord Astor of Hever]

My Lords, the figures of £11 billion to £14 billion are quotations at 2006-07 prices, and therefore do not include inflation. This equates to £20 billion to £25 billion at outturn prices. It is a very complicated issue and I would be happy to write to my noble friend in order to set it out clearly.

[Lord Cormack]

My Lords, I listened with some concern to what my noble friend said about the alternative study. Can he give the House an absolute and unequivocal assurance that the policy will be in no sense on hold while that study is completed? Can he also give the House an assurance that if the study results in the sort of outcome that he forecasts and which I would forecast, our Liberal Democrat colleagues in the coalition will then withdraw their opposition to the nuclear deterrent?

[Lord Astor of Hever]

My Lords, I can confirm that nothing is on hold at the moment. We are spending money to make our policy good, but we are in a coalition. We have made an agreement with our coalition partners and we have to stick by it.