Green Finance

Lord Davies of Oldham Excerpts

Monday 5th March 2018 Lords Chamber

[Lord Bates]

Many of those areas are for the local authorities concerned to look at. One thing that we have introduced is the clean air fund, which was announced by the Chancellor, and some £220 million will be available specifically to help local authorities in that area, but of course local authorities are able to come forward with their own proposals, should they choose to do so.

[Lord Davies of Oldham (Lab)]

My Lords, the House will be concerned that the Minister’s main reply was that we are looking at this issue. France, Belgium and Poland have already acted, and certainly the next Labour Government will act promptly on the question of a green fund for the necessary control of climate change. Why are the Government always thinking about and considering things and looking at proposals when others act?

[Lord Bates]

We are thinking about it because there is quite a lot to think about. The issue is, first of all, whether the Government should be launching these bonds while the market itself is growing quite dramatically. Five years ago, there were virtually no green bonds, or a very limited amount, but now their issuance is $160 billion globally, with some $200 billion predicted for this year. That is happening. Secondly, the Debt Management Office would have to look at whether there is a sustainable demand for hypothecated bonds, in this case. It is not something that we have tended to issue, nor have previous Governments—we tend to operate through gilts. Therefore, it is right that we listen to the expert advice that we receive and then act upon it.

Brexit: Customs Procedures

Lord Davies of Oldham Excerpts

Monday 15th January 2018 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, is the Minister aware that Parliament needs to be kept very fully informed about developments in this area? There is no way that Parliament can speak on behalf of industry and the workers in industry without a clear understanding of where the Government are at on these issues. Will he therefore recognise that there is an element of concern that the cross-border trade Bill, which is at present before the other House, may well be defined, in the way the Government have drawn it up, as a money Bill? Therefore, this House, with its expertise, will have a very limited ability to express its views on such matters.

[Lord Bates]

As the noble Lord will know, those are technical matters; it is officially for the Speaker in the other place to determine what is a money Bill and what is granted a certificate. On the importance of that Bill and debating it, he is certainly right. In the other place, the Treasury Select Committee and the Public Accounts Committee have been looking at and probing the system’s readiness, as they should. We published a trade White Paper, which had a tremendous amount of feedback that we have incorporated and learned from. We have also published working papers on future partnerships that we have shared with our European colleagues because we want to make sure that the borders work well together.

Paradise Papers

Lord Davies of Oldham Excerpts

Thursday 14th December 2017 Lords Chamber

[Lord Bates]

The Cayman Islands has work to do, as have all jurisdictions to meet the standards that have been set down. However, it is true to say that with its centrally held register, the Cayman Islands at the moment is going above and beyond what is required by the Financial Action Task Force. We are absolutely resolute about making sure that all UK citizens pay all tax due by them, wherever it is held in the world. That is a very important commitment, and we intend to ensure that all jurisdictions hold to it.

[Lord Davies of Oldham (Lab)]

My Lords, given the level of public shock at what was revealed in the Paradise papers, the Minister’s answers today follow the same emollient pattern of recent years, in which it has been said, “We are doing what we can and we are getting certain proceeds”. Yet, the Paradise papers reflected that a whole range of individuals and companies owe tax on a massive scale, and are putting themselves under the jurisdiction of these islands and escaping taxation that is owed to this country. I ask the Minister to respond to my noble friend’s Question with the degree of forthrightness it demanded.

[Lord Bates]

The question was about a public register. The UK is the first major economy to issue a public register of foreign-owned companies. We are leading in this; it was a landmark commitment given at the global Anti-Corruption Summit, which David Cameron initiated. So far, it is not required to make sure there is a public register in other jurisdictions. It has to be available to tax authorities and to security authorities in the case of counterterrorist finances. That is what is happening in those jurisdictions at present, but there is still more to do and we are far from complacent.

Budget Statement

Lord Davies of Oldham Excerpts

Monday 4th December 2017 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, this has been an excellent debate and several themes have come through so strongly that I do not need to add a great deal to the clear arguments that have been expressed, which I hope that the Minister will fully recognise in his response. The Motion under debate refers to,

“the economy in the light of the Budget”.

It is not a Budget that throws much light on the encircling gloom. It threw a few flickers, but the informed forecasts that followed, including that of the OBR, showed that the Chancellor and the nation are having to succumb to a pretty dark reality.

As a Financial Times headline put it:

“Grim outlook overshadows housing drive”.


The proposals on housing are of course welcome, and have been debated thoroughly this evening. I very much appreciated the contributions on housing of my noble friends Lord Darling and Lady Blackstone, who spoke with great authority on all the issues that confront the Chancellor in his attempt to increase the number of homes being made available. It is welcome that we are at least talking about some aspects of investment instead of the incessant cuts and austerity that we have had in previous Budgets.

The Chancellor does not call the housing market broken, which we all think it is; he calls it dysfunctional. If he succeeds in making it functional, we will not quibble about the term he uses. What has come through from this debate, however, is that we are highly unlikely to see any real achievement on housing in the near future. The aim is commendable enough—to build 300,000 houses a year—but, as my noble friend Lady Blackstone pointed out, this figure will not be reached until the middle of the next decade. The noble Lord, Lord Tugendhat, also emphasised the delay before such figures will be achieved. Not long ago, the Government promised to build 240,000 new starter homes. We do not have one of them yet, so I am not sure how much trust we can put in a promise which, in any case, is not due to be achieved until 2025.

All noble Lords who talked about stamp duty recognised that some will benefit; it is just that it will not be the aspiring house buyer, at whom this major thrust on housing was meant to be directed. The people who will benefit are those who already own houses, who will see prices increase. The stamp duty change is a gesture, but that is all—gesture politics with no real contribution to improving the housing position for those in real need.

We must recognise that housing sums up the colossally difficult problem that we face of generational inequality in our society. Reference has been made to the older generation and the fact that the triple lock provides all sorts of advantages for them, but the acute problem is for mums and dads who own their homes and watch their children come through their teenage years into maturity with no chance, unless the bank of mum and dad is large enough. Of course, for a large section of our population, that is not the case. Housing was a key feature of the budget, but the Government have an awful lot of work to do to convince this House that their proposals will achieve anything in a reasonable period.

Austerity is still to govern the lives of those of our fellow citizens on welfare. Universal credit is the creation of so much hardship in our society, on what is after all a limited rollout; it achieved from the Chancellor a small mitigation, which will cut people’s wait to receive their benefits. However, some people dependent on that benefit will still find themselves without resources and, if you are vulnerable, in rented accommodation and do not have resources to pay the rent, the implications are serious. None of us wants to see a Christmas period when not just young people are living on the streets and under the bridges along the Thames and so on, as they have no home to go to, but families with homes are ejected by ruthless landlords. Let us make no mistake: many recent indications show just how landlords regard the concept of universal credit with absolute contempt. They are not really prepared to give any form of credit or support to those people renting from them, who depend on that.

There was also an indication that the Chancellor recognised the problems of the National Health Service. The NHS is to receive £1.9 billion, less than half of what NHS professionals said they needed just to keep it going at the level of service it offers at present. There is a reference in the Budget to some new pay settlement for the NHS, but with no timescale or amount—and we do not know when that issue will be addressed. Yet for public services, the fact that pay has been held at such a ridiculously tight level for so long is causing real problems for recruitment and retention. We are talking about nurses, firemen and the police —services that we all depend on but are not prepared to finance adequately.

It is clear that aspects of the health service that we thought were a high priority can be ignored. Did anyone hear the phrase “mental health” expressed during the course of the Budget? Yet it was only eight or nine months ago that many of us were heartened by the fact that the Government seemed to have recognised that it was a crucial part of the health service that needed and would repay good investment in terms of increased public resources devoted to it. The Chancellor did not have a word to say about it; nor did he have a word to say on the issue of social care. How on earth could the Chancellor and the Government ignore social care, in circumstances where everyone concerned knows the level of crisis there? The right reverend Prelate the Bishop of Portsmouth was the first contributor to the debate on that issue, but he was succeeded by contributions from all over the House. I very much appreciated the contribution from the noble Baroness, Lady Eaton, who emphasised that the resources available to local authorities concerned about social care are utterly inadequate. So there are no new resources for social care, but—as my noble friend Lady Blackstone also emphasised—the estimate of the deficit is £2.5 billion. That is why local authorities cannot place their people in need in care homes: they do not have the resources to meet the costs. Yet the Budget ignored that.

One thing that the Budget might have ignored, but which became almost the only thing that counted the next day—many noble Lords have emphasised this—is the fact that all forecasters, including the OBR, have shown that the current direction of the economy is wrong and that all indicators presage a very difficult time ahead.

Not a single noble Lord this evening referred to the long-term economic plan. I have read the debate in the other place, and a very small number of Conservative Members did so. When it was created in 2010, no one ever suggested that the long term was a mere five years. In fact, it could not be five years as the Government are only half way towards their objective after five years, so of course it was extended to 2017-18. Now, of course, it is vaguely extended to the mid-2020s. The long-term economic plan may not be a plan at all but a vague aspiration, or perhaps a considerable con trick on the British public. The Government have failed on that crucial issue and the costs to our society will be enormous because, as the noble Lord, Lord Skidelsky, spelled out—as did a number of others—austerity has produced real hardship and does not solve the basic economic problems of the nation.

We have discussed productivity. We all recognise that productivity issues are difficult to analyse. We are always grateful when the noble Lord, Lord O’Neill, gives us the benefit of his insights but I derived from his optimistic speech that all the others are doing well and therefore may buoy us up. However, I did not detect much indication that the Government and the Chancellor have any ideas on how to improve our productivity, yet that is critical to the future of the nation.

Inevitably, Brexit hangs like a pall over this debate on the economy. We are all aware that if we crash out of the EU, the consequences could be very serious. We should remember that in the very early days of Brexit it was suggested that we would extend our role in the global economy, and that the first person we would win over as a friend would be “America First” President Trump. He and the Prime Minister were on very amicable terms. However, it has not looked like that in the last few days and we have not even begun to get near discussing trade with the American President, or indeed with anyone else. We are making limited progress in Brussels as difficulties arose today due to the proper anxieties of the Ulster Unionists. By heavens, if you are a member of the Government, you care a great deal about the uncertainties and anxieties of the Ulster Unionists; you have virtually no option but to do so. However, that difficulty in Brussels may be overcome and we may be moving towards a settlement which is not too disastrous for the country, although we are certainly paying the price for that in hard euros and are not at all sure where the negotiations on the trading relationships will get us.

This is a Government with a very considerable record—an almost unparalleled record of successive failures. They failed with their long-term economic plan; they are struggling to cope with the challenge of negotiating with the Europeans. I say to the noble Lord, Lord Dobbs, that if you are taking on 27 other countries in a negotiation you know that is going to be the number if you detach yourself from the list. There is no point in complaining that they seem to be united and able to deliver a pretty brusque response to some of our interests. I would have thought that was the nature of an international negotiation of such seriousness. We are going to find out the consequences, are we not?

Finally, at the end of the debates on the Budget in the House of Commons last week, the Government followed the very rare procedure of not moving the Motion which renders government proposals open to challenge by the Opposition in the concluding votes. This extraordinary step has been taken before, just after war broke out or when a general election was clearly in the offing, but this exceptional procedure was adopted by the Government because they sought to avoid crucial votes. You bet they want to avoid crucial votes on supply in the House of Commons. They look like a Government whose time is nearly up.

Brexit: Costs

Lord Davies of Oldham Excerpts

Wednesday 29th November 2017 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I was going to welcome the Statement, but I had hoped it would be a bit more definitive than the Minister has managed. We think that developments have gone a considerable way to securing the financial settlement, which of course is of great importance. I hope the Minister will accept that we expect the settlement to be a good deal for the nation, a fair settlement for the taxpayer and one that will meet our international obligations. The settlement will need to reduce the uncertainty that has obtained in the British economy over the period in which the Government have been negotiating so far. The Government must recognise that there is a real economic cost to those levels of uncertainty. Will the Minister accept that to get a good trade agreement in the next phase of the negotiations—the important phase—they should be based on trust and the Government should ensure that they earn that trust? Moreover, in circumstances where we may be negotiating positively in the wider world as well, such a reputation for trust will stand us in good stead for the future. The Government have so far pursued a negotiating strategy that has lacked transparency, which has caused considerable anxiety. I hope they will do better in the future.

[Lord Bates]

I welcome the support that the noble Lord offered to parts of the Statement, but the Government have a specific responsibility, which Parliament has endorsed, not to release information that would undermine our negotiating position. We are in the midst of one of the most complex and important negotiations that this country has ever undertaken in peacetime. It cannot be right that we should have to give a running commentary that will be observed and undermine our negotiating position. We do not want that to happen. At the same time, we are very mindful that we have a duty to keep Parliament informed as far as possible. The position is that we are negotiating the best possible outcome that we can achieve. We have a particular target in relation to the Council meeting taking place in mid-December. We are making every effort and working in a good spirit towards a successful completion of that negotiation.

Budget: Reduction of Waste

Lord Davies of Oldham Excerpts

Tuesday 28th November 2017 Lords Chamber

[Lord Bates]

In terms of landfill, of course it was the landfill tax introduced by the Conservative Government in 1996 that has reduced the amount going into landfill by some 70%. On local authorities, it is not just about money; it is actually about ambition and determination. We have neighbouring local authorities with varying recycling rates. Lewisham has a recycling rate of 18% but Southwark has a recycling rate of 35%, while Trafford has a recycling rate of 60%. We think that it is not just about money; it is about learning and the political leadership that will ensure that we deliver this.

[Lord Davies of Oldham (Lab)]

My Lords, does the Minister accept that normally this House would take some encouragement from the fact that the Treasury is taking the lead on an environmental issue? But what is it proposing to do? It is proposing to carry out an inquiry into how taxation impacts on plastics. Surely it can be a bit more proactive than that.

[Lord Bates]

One of the most recent ideas we had on that was about plastic carrier bags; we put 5p on them two years ago. As a result, we have seen usage reduce by 83% in two years, saving 9 billion plastic bags and leading to a 40% reduction in the number of plastic bags washed up on British beaches. That is exactly the type of innovative initiative that the Treasury should be working on, in partnership with other government departments.

Creditworthiness Assessment Bill [HL]

Lord Davies of Oldham Excerpts

2nd reading (Hansard): House of Lords
Friday 24th November 2017 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I too congratulate the noble Lord, Lord Bird, on his Bill and on his speech introducing it. Of course he has great experience of people who have difficulty coping with debt. We all know that an unacceptably large percentage of our population are daily facing challenges which can often be quite extreme. I suppose that the Government and the Prime Minister would say that they fall into the category a little below those who are referred to as “just about managing”. The worry is how large those two groups are. My belief is that they will come to haunt the Government as they seek to cope with the declining economy.

The problem has been identified clearly by the noble Lord, Lord Bird, and other speakers in the debate, who have reflected a strong consensus in favour of the Bill: society stacks the cards against poor people. An anxiety that we have expressed for many years now and which still leads to terrible deficiencies in our society is the absence of any real financial understanding of how household budgets should be handled. I know that attempts have been made in recent years to increase the provision of financial education, and under considerable pressure some progress has been made, but it is still easy to meet people who have no concept at all of some of the most basic aspects of household finance. That is why this problem is so acute. More than 1 million of our people do not have a bank account, which is indicative of the limitations they face.

Of course, as has been described on both sides of the House, the more limited your financial health, the more costly it becomes to tide over in difficult circumstances when debts are incurred. Credit companies inevitably favour safe investments and discount heavily against those with limited assets. We recognise this because it is an aspect of the market, and indeed we may hear a little more about the operation of the market before the debate concludes. However, there are very good reasons why those with limited resources should be anxious about market forces because they can be cruelly affected by how they work.

We know about those forces in relation to housing costs, and we know also that one of the fundamental problems in our society at present is the generational difference between those who were able to purchase their homes at prices within their means, given that their mortgages took up only a limited amount of their wages, and the situation today. Now, the decline in the economy and the extraordinary increase in house prices—attached to the wage freezes and impoverishment of our people—means that, for the generation coming on stream now, the issue has become a crisis.

The Government may be making some moves. In the Budget, we had indications that at least the housing crisis will be addressed, but we all know that the Budget projections on how the housing need will be met mean that it will be a decade or so before we start to see any real substantial matching of supply to demand. Housing costs, which after all relate to the question of having a roof over one’s head, will continue to burden so much of our population.

Last evening, when I was thinking about the Bill and about indicating my complete support for it, as well as that of my party both here and in the other place—my party has expressed strong commendation of the Bill—I thought I would be addressing a House with a substantial consensus of opinion. However, Governments are always good at busting consensus if it does not meet their particular rubric. As a result of communications received by the noble Lord, Lord Bird, only a day or so ago, I know that the Minister must indicate today that the Government do not think that the Bill is the appropriate solution to the problem. For the Government to change the terms of the debate 48 hours or so before we are due to debate the Bill is pretty poor conduct on their part. I excuse both noble Lords opposite—they have both been in the Commons and therefore seen, from time to time, exercises of which no one could approve. I have no doubt that neither of them was involved in this exercise, but I ask the Minister to pay due regard to what we on this side of the House regard as a somewhat unfair operation on a Private Member’s Bill at such a late stage.

I have no doubt that the Minister will say that is because the Government have a better idea and that the better idea is market orientated. Of course, in certain philosophies, of which the Conservative Party is the clearest exponent, just to use the word “market” means commendation immediately. I am not sure that the Government are bent upon improving the Bill, but they are bent upon trying to take credit for the enormously successful campaign of the noble Lord, Lord Bird, which, through the Big Issue and his experience he has operated over a considerable period of time. I think the Government are seeking to snatch a modicum of credit for the fact that they are responding to this development of public pressure. I have no doubt that they will get away with it; after all, they have a majority in the House of Commons, I am told, although it seems to have a certain process of erosion attached to it. Today, on the basis of a very limited mandate, the Government are setting out to indicate that they intend to stop this Bill in its tracks, because although the Minister will persist with his usual commitment and present the opportunity for future arguments, I have no doubt that the Government will be working toward their own agenda, which does not include the passage of this Bill.

I am sorry to have brought a slightly discordant note to proceedings, but it is on the basis of what I think is one of the latest incursions upon a Private Member’s Bill. Remember that we as parliamentarians value Private Members’ time and the ability to get Bills through. They should not be wrecked by the Government unless there is a very good cause. The cause in this case seems not to be an improved position over the Bill but the Government seeking to take credit when in fact credit is due to the noble Lord, Lord Bird, and all those people who have supported him throughout the whole of this campaign.

VAT: Evasion

Lord Davies of Oldham Excerpts

Monday 20th November 2017 Lords Chamber

[Lord Bates]

The noble Lord is absolutely right to say that there is a big change from traditional sorts of trading to online trading. It is therefore essential that HMRC tracks that in moving towards making tax digital. That is what we are trying to do. We are also saying that fulfilment houses, which are a device used to store goods for onward selling in the UK, will need to register from April next year. Perhaps most relevant to the point that he raises, we are also looking at the idea of having split taxation so that, rather than going through the declaration element, the minute that a transaction is triggered online, the tax immediately goes to the Exchequer. That seems a more sensible way forward. We consulted on that and will come forward with our proposals on it very shortly.

[Lord Davies of Oldham (Lab)]

My Lords, as the noble Lord, Lord Lucas, has clearly exposed, the Government have been somewhat tardy in dealing with this issue—as they have been on so many issues which involve the multinationals. Will the Minister recognise that legislative time is no excuse as the Government introduce a Finance Bill every year in which they could, and should, address these significant issues? Does he appreciate that the Government ought to have a comprehensive plan to restore transparency to our tax system—which is what a future Labour Government will deliver?

[Lord Bates]

Before we wait for the future one, we might reflect on what the last one did or did not do in this area. The truth is that these are fast-moving instruments; people are arbitraging the system and looking at how to exploit advantages from a trading point of view. HMRC has been vigilant and has come forward with ideas—and when it does, we implement them. That is why we put them forward in the Finance Bill and are bringing forward the measures we are talking about. That is also why the 75 measures on tax evasion and avoidance that we have introduced since 2010 have raised £160 billion for public services.

Finance Bill

Lord Davies of Oldham Excerpts

3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords & Report stage (Hansard): House of Lords
Wednesday 15th November 2017 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, this has been an excellent debate. It has centred on a financial Bill which scarcely gripped the nation—save those aspects of it which were junked in the early stages, straight after the Budget, with all the controversy which surrounded that. It had a pretty poor parentage in those terms and of course this reception has helped to indicate that the Bill is not a terribly important one in the nation’s affairs. The other aspect of it, with regard to timing, is that we are considering the Bill, as the other place has been considering the Bill in the last couple of weeks, within a week or so of the next Budget and the next financial Bill—so it is not surprising that the Bill has not provoked a great deal of controversy, nor a great deal of approval.

Because of this I feel free to concentrate first on the Economic Affairs Finance Bill Sub-Committee report and congratulate the noble Lord, Lord Turnbull, on his introduction, which made the issue so clear, and the noble Lord, Lord Wakeham, who contributed as a member of that committee. It seems to me that the report puts forward a very clear position, which the Government ought to take cognisance of.

In two concurrent sentences, the report makes its case clear. It says:

“The digitalisation of tax administration in a way that assists taxpayers is … to be welcomed”.


The Official Opposition endorse that wholeheartedly, but it is a question of how we make that work. The next sentence in the report states:

“Where the Government is wrong”,


is in their timetable. We certainly endorse that point as well. Of course, the Government have moved a little on the timetable—but not, we think, far enough.

We put forward an amendment in the other place proposing that there should be more time for people to adjust to the demands of responding to the Inland Revenue than the Government are providing at present. The reason is quite clear. It is thought that 61% of those who are self-employed—2 million people—will struggle with the process of compliance. They may struggle with that process for other reasons as well, because people do not enthuse about paying tax. But what is reflected here is that these people will have the greatest difficulty in meeting the standard requirements of the Inland Revenue for the submission of their returns. We therefore cannot possibly demand that they respond without adequate preparation.

I very much enjoyed the contribution of my noble friend Lord Campbell-Savours, along with the fact that the noble Lord, Lord Leigh, gave him some support. I imagine that they would differ a great deal on detail, but my noble friend identified that there is at least a significant case for the Inland Revenue, and for the Government, to concentrate rather more on wealth than income. We all know how wealth has accumulated in recent years, and how limited the range of that wealth is in the numbers of people who have benefited from it. So it is right that we look at the issues introduced by my noble friend Lord Campbell-Savours, particularly on inheritance tax. I would certainly welcome it if this House engaged in a series of debates on issues as fundamental as this.

If this was the sole area of our criticism of the Bill, it would be serious enough—but we have criticisms of many other features as well. The Minister in his opening speech, which we all enjoyed as we always do when he contributes, made some surprising statements about the strength of the economy. Some responsible opinion, such as that of the Institute for Public Policy Research, has actually said that the economy is broken and “needs fundamental reform”. It is only Ministers who can glibly say that all is well in the world; it seems to me that there is a great deal that needs to be reformed.

The Government persist in lower taxation for the rich and for big companies, while hitting the income of those less well-off very hard—even to the point where those who depend on universal credit are meant to sustain themselves, devoid of any resources from welfare, until the issues are sorted out. If that continues to happen as we run into the Christmas period, and if people find themselves unable to meet their bills and therefore get ejected from their homes, this Government will not know what has hit them.

This is nothing to do with taxation but on one occasion, I found that one of my great boyhood heroes when I was a young cricketer, the wonderful spin bowler from the West Indies, Sonny Ramadhin, happened to be a publican in the town that I represented. The brewery decided that it wanted to take possession of the pub and throw him out on Christmas Eve. How very thoughtful. How very considerate. This was a man who had won the plaudits of nations—I say “nations” because the British approved of him as much as the West Indians in the tests. He was thrown out on Christmas Eve. You should have seen how that stirred the people of Oldham. Corrective action was taken quite quickly. If this Government are heading for that kind of conduct over the next month or so because of the way in which they are implementing universal credit, I warn them that they are in for a very difficult time indeed.

The Government present what I think is a somewhat rosy picture of the strength of the Inland Revenue. From the very first day that they came to office, we were anxious about cuts in HMRC. Within a year it was quite clear that the cuts there were the same as those in other departments. It did not matter how much we told the Government that they were in fact cutting jobs and people who were bringing in revenue, they persisted. They persisted all through the days of austerity. The Minister is trying to pretend to me now that in fact the Inland Revenue is quite able to reach its requirements. One of the things that is going on in the Inland Revenue at present is a very significant cut in the number of offices and the creation of the regions. I have no doubt that that fits some grand plan somewhere that will be efficient in the long run, but in the short term and where we now want the Inland Revenue to be effective, it is bound to have deleterious effects.

Do the Government understand the diversity of UK society at present? How can they talk well about an economy when people under 30 have very little hope of matching the living standards of their parents? Housing is far too expensive for them to be part of the property-owning democracy—except for the favoured few—and rents rocket up in the private sector for all the reasons we know only too well. Over this period of austerity, wages and salaries have been frozen, particularly in the public sector, and jobs have often been replaced by zero-hours contracts and jobs which bear no resemblance to the public sector jobs that they have replaced.

People should envisage what it means to work for an employer who has such power in relation to the so-called contract that you actually have not got with him. He can tell you to sling your hook, basically, at a moment’s notice. If we have that kind of society, the Government cannot boast about full employment too much if quite a percentage of jobs fit into this pattern. Without wage growth, what is happening? At present, inflation is dashing past the rise in wages and people are being impoverished by that fact. Housing inflation, in particular, means that there is no hope for so many who would otherwise aspire to own their home.

That is about people who live in our country and try to cope within this flourishing economy—but the national statistics bear out the limitations of this Government as far as the economy is concerned. We have the lowest productivity in the G7. Germans are able to produce three times as much as we can in the same unit of time. The trade imbalance is still increasing and Britain is finding it very difficult to make its way. There are great disparities between incomes and wealth in London and the south-east, and the rest of England and the rest of the United Kingdom—Wales, Scotland and Northern Ireland. These are all indications of an economy about which the Minister, far from being complacent, ought to be concerned. He should demonstrate how the Government are analysing their response to these great issues.

Under it all of course is the great uncertainty of Brexit. We all recognise that Brexit is a massive challenge for the Government, but the Minister must recognise that the time delay that is going on before any definition of progress with regard to the negotiations means that of course business confidence is very severely affected.

This is a finance Bill whose only merit is that it will in fact be supplanted by another one in the very near future.

Overseas Aid and Defence Expenditure

Lord Davies of Oldham Excerpts

Monday 13th November 2017 Lords Chamber

[Lord Bates]

It is true to say that around 26% of the overseas aid budget is dispensed by other departments, and a lot of it is spent by Department for Business, Energy and Industrial Strategy. It is investing in education and research, particularly in medicine, along with development matters that will help developing countries. However, we are clear that everything has to be categorised as overseas development assistance; it must meet the primary purpose test, which is that it is for the economic development of the least well-off countries in the world. We are absolutely confident that that target is being met. If it is not met, the money is not categorised as overseas development assistance and therefore we do not meet the 0.7% target. That is why we take it very seriously.

[Lord Davies of Oldham (Lab)]

My Lords, I congratulate the Minister on his answers to this Question. Is it not essential that we continue to commit ourselves to 0.7% for the aid budget? It would be quite wrong to raid it in order to solve the problems of defence.