Budget Statement

Lord Crickhowell Excerpts

Tuesday 14th March 2017 Lords Chamber

[Lord Crickhowell (Con)]

There will be no economic theories from me after those two contributions.

On 7 March, the day before the Budget, the Royal Society of Arts—I declare an interest as a fellow—published an article which said:

“Rumours have it that the Chancellor will use his Budget tomorrow to raise Class 4 NICs for the self-employed—a sensible move that could strengthen self-employment in the long run. But he risks a backlash unless he commits his proposals to meaningful consultation. Tax reform without popular support is always short lived”.


The article advanced arguments both for and against NICs reform. It continued:

“Legitimacy first, reform second … The Treasury, lobby groups and think-tanks can do all the number crunching they like, and make the most compelling technical case for reform. But if they are only talking to themselves … then there is little hope for meaningful change … All of this points to the need for a thorough consultation on NICs reform before any changes are made … And if not? Then the Chancellor may face his very own ‘pasty tax’ moment”.


Curiously, the article made no mention of the manifesto pledge, which in the event proved to be the major obstacle to the Chancellor’s intended change—that and perhaps the “no-go area” referred to by the noble Lord, Lord Macpherson, who probably has more experience of “pasty tax” moments than any man alive. The triple lock pledge made by Cameron was unwise and the circumstances have been transformed by the result of the referendum, but a pledge it was, and the case needed to be made for breaking it. The problem facing the Chancellor was well illustrated by two articles in the Daily Telegraph after the Budget. The first accused him of not doing anything like enough to reduce taxes and the second, two pages later, said that not nearly enough had been done to reduce the nation’s borrowing and debt. The Minister emphasised the need for caution and fiscal responsibility, pointing to the 60% of self-employed people who will pay less tax.

The Chancellor was right to make provision for a period of uncertainty, now made worse by the demand for a Scottish referendum. Those seeking a way out of the NIC mess could do worse than study The Entrepreneurial Audit, a report published in February by the RSA after months of evidence-taking and consultation. The report makes two sensible points at the outset. First, the Government should be guided by evidence, including direct consultation with the self-employed. Secondly, they should aim for policy continuity, as unnecessary change can create confusion and disruption. The report recognises the diversity of 4.8 million individuals; not all of the self-employed share the same expectations and needs, or live up to the stereotype of the heroic entrepreneur. I thought that the noble Lord, Lord Desai, was more accurate on that matter than my noble friend Lord Flight, whose remarks I criticised to his face outside the Chamber.

The report argues that its foremost concern is that people doing the same work but under different guises can face widely different tax treatment, and that creates three core problems. The first is the incentive it creates for false self-employment. Employers who treat individuals as self-employed contractors when they should be engaged as standard employees make considerable savings, while the workers lose valuable rights. The second is that the differential makes it hard to argue that the self-employed should have greater welfare protection. The third problem is the large sums lost to the Exchequer, particularly from the growth of gig work, enabled by platforms such as Uber.

The report makes numerous recommendations. What is important is that, although one might not agree with many of them, they are all set in the context of the need for other changes, notably the modernisation of business rates and changes to policy on welfare and pensions, regulation, late payments and universal credit. The report identifies flaws in universal credit as it applies to the self-employed and recommends that they be ironed out to ensure that it is fair for the self-employed and employees, and does not hinder potential viable businesses.

I finish with pensions and the need for continuity of policy. The reversal of policy on the dividend allowance was violent. The Minister defended it by saying that 80% of those receiving dividends would pay no tax on them, but one in five of the 2.3 million people who will pay are pensioners. I suppose that I should declare another interest because, although I have always invested the maximum in ISAs, I might have to pay a little more myself. Those pensioners have really been sold a false prospectus.

I draw one positive conclusion from reading the report: there are plenty of routes available to the Government for making workable and acceptable changes to the tax arrangements for NICs and remove them from the list of no-go areas, while, in this time of uncertainty, protecting as they must the revenue stream. A mistake has been made, but I hope that the squabbling will now cease and solutions are found in time for the Autumn Budget.

Autumn Statement

Lord Crickhowell Excerpts

Thursday 5th December 2013 Lords Chamber

[Lord Deighton]

I thank the noble Lord for that question. I will have to write back to him. I am not sure what the long-term budgetary arrangement is. The usual thing is that it is not specifically in the book. It is expected to be absorbed when we come to do the specific budgets in those years. I am sure the expectation is that it will continue, and that the money will be found for it when we do the budget for that year.

[Lord Crickhowell (Con)]

My Lords, I particularly welcome the measures taken to reduce the tax on employing young people, which will be welcome all around the country. But will the Minister say a little more about the £25 billion that is supposed to be coming in for infrastructure from the insurance companies? I do not think this has been referred to at all in the exchange that has taken place so far on infrastructure. How far does he think it can help in speeding up the infrastructure work? That seems to me, as the years go by, to take longer and longer, partly because the projects are very big. What we really need is not just a large amount of infrastructure work propped with finance but that it takes effect quickly rather than slowly.

Queen’s Speech

Lord Crickhowell Excerpts

Wednesday 16th May 2012 Lords Chamber

[Lord Crickhowell]

My Lords, I intend to talk only about energy policy. During the last Session, I was a member of the Select Committee on Science and Technology. Our report, Nuclear Research and Development Capabilities, was published last November. The focus of our inquiry was not on the arguments for and against nuclear energy, but on whether or not the Government are doing enough to maintain and develop nuclear research and development —R&D—capabilities and the associated expertise to ensure that nuclear energy is a viable option for the future.

The report said:

“During our inquiry, we were struck by the extraordinary discrepancy between the view, on the one hand, of some senior government officials and the Secretary of State”—

we were referring to the last Secretary of State—

“and on the other, those of independent experts from academia, industry, nuclear agencies, the regulator and the Government’s own advisers. A fundamental change in the Government’s approach to nuclear R&D is needed now to address the complacency which permeates their vision of how the UK’s energy needs will be met in the future”.

Those were strong words and they seem to have detonated like a nuclear explosion within DECC. The Government’s response, accepting almost all our recommendations, appears to represent the fundamental change in approach to R&D that we demanded. It also acknowledges,

“that nuclear power stations have a vital part in our energy strategy”.

It goes on to say:

“The UK civil nuclear industry is an important sector in the UK economy given its current, as well as potential, contribution to jobs, growth and high value exports”.

That is a welcome change, but I remain acutely concerned about the Government’s wider approach and I fear the growing possibility of an energy security crisis.

The energy Bill, we are told, is designed to provide investors with long-term certainty and incentives to invest in low carbon. Far too much emphasis is still placed, and money spent, on onshore wind farms, which at best can only provide a very small proportion of the energy needs of this country and make a minuscule contribution to the worldwide reduction of carbon emissions.

At the same time, the start of the nuclear programme is proceeding far too slowly, if it is proceeding at all. Were it not for the rapid growth of a competitive worldwide market in gas, as LNG facilities grow and shale gas exploitation develops, we would be in deep trouble. The experiments in carbon capture and storage seem unlikely to produce results that will make any contribution to our needs for a good many years. Nor can we rely on energy efficiency and conservation. Even the rather modest nuclear ambitions of Ministers are now under serious threat. RWE/E.ON has withdrawn from nuclear building in the UK. Both companies in the consortium have incurred losses of billions of euros and run out of money because of the decision of Chancellor Merkel to pull Germany out of the nuclear business. That represents a major setback as new owners are sought for the sites at Wylfa and Oldbury, possibly from China or Japan.

We are left with EDF Centrica. The French EDF may have to adjust its plans in the face of the new French President’s pledge to cut the French nuclear programme by a third. Already, that company has, if the report in the Times on 7 May is correct, increased the price of its two planned reactors at Hinkley Point by 40% to £7 billion each. The Times report says:

“EDF energy will decide by the end of the year whether to proceed with the £14 billion plan, but experts said that the rising costs—and its parent company’s deteriorating financial position—made this less likely”.

Speculation has also mounted that Centrica will pull out of the joint venture. EDF energy has promised to complete the first Hinkley Point reactor by 2017, but the plan is already well behind schedule—though a pessimistic report in the Guardian has been denied. The company is quoted as saying:

“We remain committed to delivering the first new nuclear plants in the UK for 20 years at Hinkley Point. The decision depends on having the correct market framework that will allow an appropriate return on the massive investment required”.

EDF is in a strong bargaining position and that places the responsibility for what happens next firmly on Ministers, who are faced with uncomfortable choices. We face the further uncertainty that the Government’s plans have to jump EU hurdles and are dependent on the examination to be made of a draft Bill and the subsequent passage of a Bill that may be carried over into the next Session. It is absolutely crucial that the Government come forward very soon with a clear statement of policy and firm measures to provide the foundations on which the industry can build with confidence.

I have just a few more words about wind farms. In Wales, a very large expansion of onshore wind farms is going ahead on the back of the Welsh Assembly Government’s TAN8 document, which sets out the location of wind farm concentrations in Wales. Already, there is great local anger about the concentration above Neath in the south. In mid-Wales, the local community is outraged by the planned concentrations in some of the most beautiful, unspoiled parts of Powys —concentrations that are to be joined by a network of pylons and cables and then carried down one of the most glorious valleys in Wales by a massive transmission line into and across Shropshire. Scottish Power is pressing ahead, eager to get its hands on the subsidies.

If I thought that this desecration of the natural environment would make a significant difference at a reasonable cost to meeting the nation’s essential energy requirements or to saving the world from global warming damage, I might regretfully conclude that it was a necessary evil. I do not believe either of those things. It is an odd irony that the flooding of Welsh valleys to provide water for English cities provoked the understandable outrage of a previous generation. Now, however, a Welsh Assembly Government cheerfully give the go-ahead to this desecration in order that electricity should flow across the border to English cities. Greater benefits would be provided by turning off the multitude of lights that illuminate towns, villages and roads between midnight and dawn. I believe that one county council has already given a welcome lead in that direction; I hope that others will follow that example.

Health: Private Medical Insurance

Lord Crickhowell Excerpts

Monday 15th November 2010 Lords Chamber

[Lord Sassoon]

My Lords, I think I have responded to the noble Lord’s points in the answers that I have given to a number of questions.

[Lord Crickhowell]

My Lords, I declare a similar interest to that of the noble Lord, Lord Walton. Is not the trouble the fact that the terms, which many of the 6 million knew they had, understood they had and have had over many years, are often changed so that people can no longer go to the doctors and hospitals recommended by their GPs, but have to go to ones nominated by the company? People cannot deal with that situation because, when they took out the policy, they had the cover that they required. In many cases, they no longer are offered the cover they thought they had and had reason to expect that they had.

[Lord Sassoon]

My Lords, as I have said, it is absolutely the focus of the FSA and the conduct of business rules that people who buy private medical insurance, just as they buy household or any other insurance, are properly sold and have explained to them the terms of the policy and that the terms of the policy are carried through. Normally, these are annual policies and the terms of policies in this area, just as in other areas of insurance that no doubt we all buy, change from year to year.