Sunday Trading (London Olympic Games and Paralympic Games) Bill [HL]

Lord Davies of Oldham Excerpts

Thursday 26th April 2012 Lords Chamber

This is just another manoeuvre—if I may put it that way—to try to make palatable what many of us see as a basically unsatisfactory and unacceptable Bill. In a way, the Government undermine their own position by being so emphatic that it is a temporary measure that will be lifted at the end of the Olympic period, which suggests that they cannot justify it on a long-term basis. If temporary measures of this kind are being taken in contradiction of the whole spirit of recreation and the enjoyment of sport, why is the onus being put on the employee to opt out as distinct from the opportunity—I can be seduced into using that word in this context—for a worker to opt in if he or she so wished?

[Lord Davies of Oldham]

My Lords, opposition Amendment 1E is an alternative to the one described by the Minister in his opening speech. It is there because we have not been able to reach agreement on how to safeguard shop workers’ rights during this period. He is absolutely right and I very much applaud the way in which he has approached this Bill. He has sought to consult as effectively as he could, as have we on our side. We have met him and have talked with as many interested parties as we have been able.

Let me make absolutely clear, as I did at Second Reading to which the Minister paid due regard, that we are in favour of this Bill. We want it to become law because we think it enhances the potential experience of the Olympic Games, albeit to a limited extent in so far as it creates consumer opportunities and shows Britain open for business. Nevertheless, it is an advantage and our existing shopping legislation would have looked odd in that the Games are on for a limited period. In particular, as I pointed out at Second Reading, the shops would close before the closing ceremony of the Games had even begun, which would have been a nonsense. We are in favour of change and we are broadly in favour of the Bill.

Our difficulty is how to safeguard the rights of shop workers. I am not prepared to accept the argument—as I am sure other noble Lords are not—to say at this stage, “Well, of course, shopkeepers are somewhat favoured in comparison to others who work on Sundays because of the existing provisions of Sunday trading law”. Shopkeepers are in that position but only because we have been concerned to circumscribe the hours of shopping on Sundays with the broad agreement of our community. Every test of public opinion at the present time reflects the fact that broadly what obtains in the generality is acceptable.

Shopkeepers have proper rights in relation to this, which were provided for in previous legislation. Now, a significant change is to be effected for this limited period. Consequently, we have sought to address ourselves to ensure that workers’ interests are protected. Although I have one other dimension in a later amendment, I emphasise that in all other aspects we are in favour of the Bill and wish it a safe passage. But we want to put before the House the critical issue of how shop workers’ interests are safeguarded.

We think that either the government amendment or ours is necessary because we need to be specific on how workers are to be treated over this period, but we have severe reservations about the government amendment. We discussed as fully as we could with the Government how to reach agreement. I regret, as does the Minister, that we have not been able to reach that agreement, which would have facilitated the passage of this legislation and kept the terms on which we have considered this Bill on the equable lines that they were at Second Reading. When discordant voices were expressed, they were about the whole principle of Sunday opening and not really related to the Bill.

We have tabled Amendment 1E because we think it makes absolutely clear the legislative position as it will affect shop workers over this period. I accept what the Minister said about this being merely a backstop. Many large organisations may have arrangements with their workers, which in some cases are likely to be more favourable to their workers than those provided in the Bill. But the law is an important backstop, which properly constrains the way in which these arrangements can be made, and it is necessary.

The Minister said that he has had wide consultations and knows that a large number of organisations will act entirely properly, and I accept that. But there are some organisations about which we will have more doubts. Certainly, independent shops may avail themselves of these opportunities but I doubt that the Minister is fully apprised of their arrangements and we are certainly not. One might say, “Well, you should be better advised on this”, but this Bill has come through under the emergency provisions. It is a rushed Bill due to the Government’s failure to recognise the necessity that such a provision was possible. That is why many of the difficulties we have in how to interpret the needs outside are less intensive than we would have hoped them to be.

However, we are sure that we need the law to be clear. An amendment is important and our Amendment 1E has considerable advantages over the government amendment. It calls for employers to give employees two months’ notice if they wish them to work on one of the Olympic Sundays. After all, this is a unique change and workers need to be informed about it. A request to work is a straightforward way to facilitate this.

Let us not underestimate the problems facing shop workers. This is a period of very significant unemployment in this country. We all know that work in shops is on a mixture of contracts. For a time we even had arrangements whereby people worked in shops on a voluntary basis while they got work experience. That has changed now but it reflects the complexity and the variety of provision in large commercial organisations. That is why we need clarity. We need it also because workers are likely to feel somewhat vulnerable at this present time. It is not easy to say no to an employer when there are 10 people at the gate for every job inside. This context has to be appreciated in recognising why those who represent shop workers are very concerned about the Bill.

Our Amendment 1E gives real clarity on the issue. It requires workers to submit an opt-out notice one month before the relevant Sunday. This builds in a period of time to make a decision between a request to work and having to submit the request to opt out. Our amendment is clearer than the Government’s and it is intelligible. It backs up the workers’ position in a clear and explicit way. Workers’ and employers’ rights and responsibilities are clearly stated in our amendment because it goes back to the first principles. It is not entirely incompatible with the amendment of the noble Lord, Lord Sassoon, because, as he has indicated, we have sought to achieve a consensual view with regard to this measure, and in broad terms we have obtained that. We are not changing the original Sunday Trading Act; we are merely putting forward an amendment which is preferable to the Government’s in its clarity and intelligibility. That is why, in due course, I hope to press Amendment 1E.

[Lord Davies of Coity]

My Lords, I regret that I was not able to be in the House on Tuesday and therefore could not participate in the Second Reading debate. However, I take the point of view of the noble Lord, Lord Judd, with regard to the protection of shop workers. In the Second Reading debate the noble Lord, Lord Cormack, said that he had been involved prior to 1986. So was I as the general secretary of the Union of Shop, Distributive, and Allied Workers. We fought strenuously up and down the country and we took a view. The only reason that we won the vote in the Commons under Margaret Thatcher, who I believe put a three-line Whip on the vote, was because 70-odd Conservative Members rebelled and supported the Opposition. At about 1 am on 16 April 1986 Neil Kinnock, the then leader of the Opposition, phoned me at home to tell me how successful they had been. It is the only time in Margaret Thatcher’s term of office that she was defeated, and that is important.

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Moved by

[Lord Davies of Oldham]

1E: After Clause 1, insert the following new Clause—
“Employer and employee duty to give notice regarding Sunday working during suspension period
(1) This section applies to any shop worker who is—
(a) employed to work only at an exempted large shop; and(b) not already subject of an opting-out notice under the Employment Rights Act 1996.(2) Where an employer wishes a shop worker to whom this section applies to work at an exempted large shop on a Sunday falling within the suspension period, the employer shall, not later than two months before the Sunday in question, give that shop worker a written, signed and dated statement of the request to work on that Sunday.
(3) A shop worker who receives a notice under subsection (2) who wishes to opt out of Sunday working during the suspension period shall, not later than one month after the request in subsection (2) was made, give a written, signed and dated notice that he or she objects to working on that Sunday.
(4) Where a shop worker gives his or her employer a notice under subsection (3), the contract of employment under which he or she was employed immediately before he or she gave that notice becomes unenforceable to the extent that it requires the shop worker to do shop work on Sunday during the suspension period.
(5) An “exempted large shop” is a shop to which paragraph 2(1) of Schedule 1 to the Sunday Trading Act 1994 would apply during the suspension period were it not for the disapplication made by section 1(1).
(6) In this section—
“shop worker” has the same meaning as in the Employment Rights Act 1996; and
“suspension period” has the meaning given in section 1(3).”

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Moved by

[Lord Davies of Oldham]

1G: After Clause 1, insert the following new Clause—
“Opening hours during the suspension period
( ) An exempted large shop which opens on a Sunday during the suspension period, will be able to open only during the hours of 10am and 11pm.
( ) For the purposes of subsection (1), an “exempted large shop” is a shop to which paragraph 2(1) of Schedule 1 to the Sunday Trading Act 1994 would apply during the suspension period were it not for the disapplication made by section 1 above.”

[Lord Davies of Oldham]

My Lords, I apologise to the Committee that this is a manuscript amendment but the intention behind it is, as I indicated on Second Reading, that although we favour the extension of Sunday opening during the Olympic period, some limits should be put upon the opening hours of shops. The reason for submitting the manuscript amendment is that I discovered to my horror that the conclusion of the Olympic Games at the closing ceremony was not at 10 pm but at 10.30 pm. Given that the importance of the closing ceremony was germane to our case, I have submitted a manuscript amendment that extends opening hours to 11 pm.

We are of course in favour of the extension of opening hours, but there should be some limits upon the length of time that large stores and others can open during that period. The amendment goes some way towards recognising that Sunday is Sunday and is different from the rest of the week, and we are paying due regard to what is after all a widespread position held in the country on that matter. Our proposal to limit opening hours offers some protection to the workers. We have had a discussion on giving notice to people in the workforce of the intention to work on Sunday and the time in which they can reply. However, some constraint on hours offers at least an element of protection against possibly excessive demands made upon workers during the Games period.

The amendment also gives some recognition to the concern about this legislation that we discussed at Second Reading but was not germane to, or expressed during, our debate on the previous amendments—the concern of convenience stores and small shops that they will be adversely affected by the Sunday opening hours of large stores. The Minister recognises the difficulties that we all face, but the background against which the stores have been working is that the impact assessment provided by the Government is a fairly limited document. What is more, we received it after Second Reading and it is therefore difficult to make an assessment of its value. Moreover, if we are in that position, so are interests outside.

It is clear that convenience stores feel that they may well suffer during the period of extended Sunday opening during the Olympic Games because of the superior competitive power of the large stores. At least this limitation on the hours proposed in the amendment recognises that.

The noble Lord, Lord Bates, said today that shops will open only when they think that there is market potential. They will open when they will be profitable. This will operate for a limited period and it will be extremely difficult for people to make such assessments. Therefore, we think that, at the very least, the legislation should indicate for what time shops should be open. I recognise the limitations that not opening before 10 am, in particular, represents, but it goes some way towards the recognition of Sunday being a less busy and challenging day than the rest of the week in the wider community.

Finally, I hope that the Minister will be prepared to accept the amendment. That might be a forlorn hope, but all along he has been keen to emphasise that this is emergency legislation to deal with a limited, restricted period and that it is no precursor to widening Sunday trading in future; it is solely related to the Olympic Games. If he gives fair wind to the amendment, that would indicate that we are concerned about the implications of this change for the wider community. While realising all the potential benefits of Britain being open during the Olympic Games, there should also be some recognition that on Sundays, special hours should obtain. I beg to move.

[Lord Sassoon]

My Lords, I will not disappoint the noble Lord, Lord Davies of Oldham. The Government do not see favour in the amendment. As he explained, its effect would be to restrict the Sunday opening hours of large shops deregulated by the Bill so that they can open during the suspension period only between the hours of 10 am and, now, 11 pm, the intention being to prevent large shops from being able to open any earlier on Sundays than they can now or until too late in the evening. I wish that, along with all the other things that we discussed with the Opposition, we had been able to discuss this before, because we might then have been able to point out one or two of the difficulties with the proposal.

The starting point is that the Government have been clear from the beginning that the Bill is about flexibility. It is not about the Government imposing opening and closing times on large stores during the suspension period; it is about allowing shops to make their own decisions based on what is best for themselves, their staff and their customers. I do not think that it is right for your Lordships’ House to second-guess any of that. It is not that all large stores will suddenly open for 24 hours a day during the Olympic period; that would be absurd. We have discussed opening times with the large retailers and it is clear that there will be a variety of opening and closing times within individual groups. Some will deal with it on a regional, geographic basis. Within the whole group, some will stay open late, some will open earlier, and some will not change their opening times at all. The important thing is that the Government want that to be a decision for them.

The amendment is unnecessary. I do not want to overlabour the point, but as we have seen from the scrabbling around by the party opposite, they realise that putting a 10 pm stop would be before the closing ceremony had finished. Well, putting an 11 o’clock closing time after an event where 80,000 people have to get out of a stadium, adding an extra half-hour, is absurd if the change to the amendment is intended to reflect what is really going on at the events.

Even to reflect the situation at the event that the noble Lord, Lord Davies of Oldham, identified, half an hour for 80,000 people to get to a large shop near the stadium is plainly not doable. There are events that will finish as late as midnight on a Sunday. The beach volleyball finishes at 10 to midnight on 29 July. What about all those events that start before 10 am? Why should not we allow shops, if they want to, to service all those people who will be going into events? Again, I could give a very long list, but if we just take 29 July, there is an 8.30 start for the badminton, 8.30 for the hockey, 9 am for the basketball, shooting and archery, and so on.

The amendment does not work in relation to the narrow Olympic events themselves. It does not reflect the fact that retailers are already taking individual decisions to open early, late or make no change at all. As with the other opposition amendment, I note that it does not impose any sanction or penalty for breach of the 10 am to 11 pm restriction, so large shops may well ignore it. It would be a duty with no sanction, which I suggest is simply bad law. That contrasts with large shops which breach the current restrictions, which can be fined up to £50,000, which is clearly a significant punishment in relation to the gain. It does not work, it is unnecessary and I ask the noble Lord to consider withdrawing his amendment.

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[Lord Davies of Oldham]

My Lords, the Minister disappointed me and I am now going to retaliate by disappointing him because I shall not withdraw the amendment. He listed events that would go on beyond 10 o’clock as a point of absurdity in relation to shops being closed. I do not know how many people he thinks are going to go shopping after they have been in Horse Guards Parade watching beach volleyball on a Sunday evening after 10 o’clock, but to my mind such a notion beggars description. The Minister is always fertile with arguments that sustain his challenges but on this occasion I am going to disappoint him and test the opinion of the House.

Value Added Tax: Listed Places of Worship

Lord Davies of Oldham Excerpts

Tuesday 24th April 2012 Lords Chamber

[Lord Sassoon]

The right reverend Prelate raises some important points. I can give him only partial comfort, or the answer that he wants, in respect of some of his question. First, as I have already explained, we intend to make sure that the compensation number fully reflects the additional costs of the Budget change. The element that troubles us most is that under the previous VAT arrangements the incentivisation worked in favour of alterations of listed buildings as opposed to repair and maintenance. We do not want to see anything that incentivises people against repairing and maintaining and therefore preserving the core heritage features of the property, so we think that it is right to put alterations, repairs and maintenance on an even basis. Therefore, although I cannot give the right reverend Prelate the comfort that we intend to revisit that issue, I stress again that we want to make sure that the churches are fully protected against the impact of the Budget change.

[Lord Davies of Oldham]

My Lords, is this a good time to reduce demand for the construction industry? In January this year, its output fell by 14 per cent. It is true that there was a slight improvement in February, but in the first quarter of this year output from the construction industry is certain to fall, with all the implications that that has for economic growth. Can the Minister look at this issue again?

[Lord Sassoon]

My noble friend was perhaps being excessively charitable to the noble Lord, Lord Davies of Oldham, in saying that he was always right on matters. I am afraid that on this one he has not got it right. As I explained, the Government are fully compensating churches for the changes in VAT so that there will be just as much money available to listed places of worship before and after the change for them to put into something that we want to protect—the ongoing repair and maintenance of our listed places of worship.

Sunday Trading (London Olympic and Paralympic Games) Bill [HL]

Lord Davies of Oldham Excerpts

Tuesday 24th April 2012 Lords Chamber

[Lord Davies of Oldham]

My Lords, the Minister has several problems to address but I shall help him with one of them. Discordant voices on his side can be reconciled quite easily here and in the other place. The major parties have always left Sunday trading to a free vote and, therefore, discordant opinions are part of the rich warp and weft of debate in this House. I would not get too upset about the discordant voices this evening, although the Minister needs to address the point made by the noble Lord, Lord Cormack, at the beginning of the debate, rather than in his contribution at the end. He asked the obvious question: why is this Bill before us now? Not only do we have to deal with it at this very late stage, under the extreme privations of a rushed parliamentary timetable, but there were opportunities when the issue could have been addressed in an appropriate manner for this revising Chamber. I am grateful to the Minister for the element of generosity that he showed when he indicated that an impact assessment, which we pressed for in the rushed days of consultation, will be provided—tomorrow, after Second Reading on the principles of the Bill. This is evidence of the fact that we are faced with an extremely difficult situation, dealing with fast-track legislation in this form. It can only be down to government incompetence.

The fast-track legislation process that we face in dealing with the Bill in three days, with an impact assessment interspersed between the days, is designed for urgent responses, for example to terrorist attacks or natural global disasters—not for retail opportunities during the Olympic Games, particularly when, as every Member of the House knows, we have known since 6 July 2005 that we would have the Games in London. One would have thought that that had given the Government plenty of time to get their act together. The noble Lord, Lord Newby, asked pointedly about the nature of the emergency. The answer is clear: the Government had their chance a few months ago. They brought before the House six months ago the London Olympic Games and Paralympic Games (Amendment) Bill, which is now an Act. This was a suitable vehicle for consideration of exactly the issues that we are dealing with extraordinarily rapidly in the course of this week.

The Government failed to do it then, and as a consequence the Minister emphasised that he had been involved in consultation. What levels of consultation? Certainly the Opposition had the opportunity for a certain exchange of views; but as I will point out in a few moments, we are not reconciled to every aspect of the Bill and we will put down amendments on Thursday because the Government have not met our anxieties to the necessary extent.

If the issue of trading opportunities was so important, why on earth was it left to this year’s Budget, a few weeks ago, to air it? One can only speculate that pressures were brought to bear on the Government. If that is denied and it is the Government seeing an opportunity, without any pressures at all, how strange it is that they should largely have ignored in the first instance the very considerations that a large number of contributors to the debate this evening, on their own Benches as much as on ours, emphasised: namely, that the proposed legislation may work adversely against the interest of workers who must contribute to Sunday working—a contribution that at present is carefully regulated by legislation that was passed, as noble Lords emphasised, more than a decade ago in such a way that we reached agreement across the nation.

There is no pressure for enormous changes. Of course, I heard the representation of the noble Baroness, Lady Deech. I also know that the noble Baroness, Lady Trumpington, takes a different view from some of us in the House on the extent of Sunday trading. However, on the whole, the legislation that was passed in the 1990s has stood the test of time. Every Government and Minister since—and I include my Minister, Alan Johnson, for example, as well as Conservative Ministers—who have consulted on whether Sunday trading laws should be relaxed have found that it has not looked worth while.

This Bill ought to have been considered within the framework of provisions for the Olympics, and it was not. I think that the Bill is necessary. Let me give one obvious instance. Somebody has tumbled to the fact that the closing ceremony of the Olympic Games begins at 7 pm and under the present legislation, unless it is changed, the outlets and the shops must close at 6 pm, so if you are at the ceremony and get that great emotional feeling of a successful Games, which we all look forward to, and that surge of determination to get a memento of the experience by buying something to take away from London as a result of that great experience, the shops and outlets will have closed before the closing ceremony has begun. You would have thought that the Government could have got their head around this issue somewhat earlier rather than producing this emergency, fast-track legislation.

Noble Lords have emphasised that the greatest concern in this House, which will certainly be of great concern in the other House, and I have no doubt that my party will be united on it, is that this has got to be a unique event related to the Olympic Games. It must be no Trojan horse. In his opening speech, the Minister indicated that he is not constructing a Trojan horse, but I guess that that is what the Greeks suggested at the time of the construction of the original Trojan horse. We want to emphasise that we are accepting the good faith of the Government how this is not a tryout for some further onslaught on the abolition of red tape and the transformation of Sunday trading laws in circumstances where there is little public clamour for it, although there may be discreet interests of influence in the Conservative Party that seek to benefit from it.

Since we do not have a great deal of supporting evidence, we do not know what will be the impact of this potential opening on small shop keepers. We may get some enlightenment tomorrow, but at this point, where we are considering the principle of the Bill, we are devoid of information on that score. Of course, it is obvious that those shops that are not controlled by Sunday trading laws at present will lose their competitive advantage over the eight Sundays on which this legislation is to operate. That is why they made representations to the effect that they are against this legislation; they are concerned about it and they are particularly concerned if it should presage further changes subsequently.

Another dimension was brought up by noble Lords in all parts of the House this evening. It is whether the legislation significantly affects the rights of workers under existing legislation. As a result of the tight timetable between the passing of this legislation and the opening of the Games, the period of notice to workers has to be changed. It is the case, therefore, that in their ability to respond to the pressures that an employer may apply—and noble Lords have been right to emphasise that these pressures can be severe in some circumstances—workers will be disadvantaged by the tight timetable.

Of course, we want the Olympic Games to be successful. Other noble Lords have testified to the work that they have done on Sunday trading. I might add that I answered dozens of questions about the Olympic Games and participated in a number of debates on the Games when in government. Of course, I want to see them a success, the same as every other Member of this House. Whether that is dependent upon changes in trading laws, I have greater leave to doubt.

Of course, as a party, we will not vote against this legislation. We will not do it here or in the other place. However, on Thursday we will go into detail on this Bill and I signal to the Minister that I do not regard his present amendment as being sufficient to safeguard the interests of those workers whose conditions will be changed by the legislation, and we shall be tabling amendments accordingly.

Economy: Budget Statement

Lord Davies of Oldham Excerpts

Thursday 22nd March 2012 Lords Chamber

[Lord Davies of Oldham]

My Lords, this has been an excellent and wide-ranging debate, and therefore it is all the more difficult to wind up the issues from this side. Before we came into the Chamber, the Minister was kind enough to indicate that it is always the senior figure, in the Commons and here, who introduces the debate and the poor junior who has to cope with winding up. Of course, the Minister is playing both roles, so he has my greatest sympathy.

I hope that in responding to the debate the Minister will find time to address himself, in particular, to specific points that Members of the House have raised. They are difficult for me to develop in the limited time available but I think they are well worthy of consideration. My noble friend Lady Worthington drew attention to the extent to which this Budget challenges the Government’s green credentials, and the noble Lord, Lord Marlesford, indicated that property taxes are a pressing issue that we ought to address. My noble friend Lord Desai said that the Minister ought to consider what should have been done with the windfall of Royal Mail resources. The noble Lord, Lord Northbrook, indicated something that is of great concern to the nation—the imposition of an extra 3p on fuel duty later this year unless the Chancellor takes action.

In the limited time that I have, I will concentrate on the main themes of this debate. The main theme is obvious: this is a Budget presented in an age of austerity. That is why the country sought to respond to the concept that was presented a year or so ago—we are all in this together. The Government said that they were concerned about fairness in the necessary privations that would be visited on the nation as it emerged from these great difficulties. We were somewhat reassured last year when the Chancellor said that it was not the right time to remove the 50p tax rate, when others in society on much lower incomes were being asked to make sacrifices. Exactly, but what has changed? Only that the least well-off in our society—the poor; those who are losing their jobs as mass unemployment begins to emerge across the nation; those who are losing their benefits; those who are finding their pay frozen; and those who are threatened with regional pay rates at a lower level than they enjoyed in the past—are making sacrifices while the Government reduces the 50p rate of tax. It is payoff time for the Government’s supporters but payback time when the nation regards this issue as appallingly unfair.

Of course, the Budget did not come as a shock. As the noble Lord, Lord Higgins, indicated, there was very little left in the Budget that could cause any surprise because the press had been well briefed. My noble friend Lord Davies of Stamford asked whether Ministers knew that this briefing was going on. Is it conceivable that even the challenging folk in the Treasury would have been so brave as to give these leaks without sanction? Of course not; this was a carefully prepared position.

What was not revealed in the leaks beforehand was the granny tax. That emerged from the finer print of the Budget. As my noble friends Lord Wood and Lord Myners, who both demolished the totally contradictory defences that the Government have erected for the reduction in the higher rate of income tax, pointed out, everyone is scandalised by the Government attacking pensioners in such an obscure way. The reason for doing so is straightforward and has nothing to do with the Government’s defence of, “We haven’t hit pensioners hard enough yet so it’s their turn”, which seems an odd idea of fairness. Pensioners are on fixed incomes, with fixed expectations; that is why the change to the terms of trade in pensions is so acute and causes such anxiety. Members of the Government ought to appreciate just how significant that is in the response to the Budget.

However, even then, we are still discussing minor matters in relation to the economy. I think the noble Lord, Lord Higgins, first voiced the opinion, which was subsequently reinforced by a number of noble Lords, that the Budget did not have a great deal to do with the real economy. Given its neutral stance, it will have a marginal impact on the real economy. However, this debate is about the real economy and some of the interesting contributions have addressed that.

In a central part of an extremely challenging speech, my noble friend Lord Eatwell indicated that one of the crucial figures is that business investment, which was anticipated to be 7.7 per cent, is down to 0.8 per cent at present. That ought to be a source of real anxiety for us all. Is it because businesses lack cash? That is not what the Institute of Directors says. Its director-general says that we do not lack cash but we do lack consumers. Certainly, many of our major companies are cash-rich at present. However, they do not have confidence in the market. They are not confident that they will get a return on their investment. This is not the case to the same extent with the SMEs, which may not be so cash-rich. As my noble friend Lord Sugar pointed out, there ought to be a role for government. He was not the only speaker to voice this point but he was probably the first to do so. We need an investment bank that directs itself to provide resources for what would be the rapid growth areas of the economy, if we can only prime them successfully.

The problem is that the Government are massively reducing demand. They are reducing the resources available to people to spend. I am not, of course, talking about those who will benefit from the reduced rate of taxation and can afford to buy sports cars costing £40,000 to £60,000. The only tragedy about that is that those cars are almost certain to be German and therefore British industry gains little from those transactions. However, the vast majority of the population are exhorted not to spend what they do not have. The problem is that they have less, or they are anticipating that they are about to have less.

We are used to a Conservative Party which in times of austerity has a history of being quite prepared to run the country with high levels of unemployment. Reference has been made to the lessons of the 1930s, but there was high unemployment in the 1980s and we are now approaching similar levels of unemployment. That is a tragedy for all those who are unemployed. Those who think that the 1 million young people who are unemployed are unemployed because they prefer to hang around on generous benefits know nothing about the young people of this country. No young man or woman wants to be in a position where there is no possibility of getting a job or career. The reason why they are unemployed is because the jobs do not exist. The Government ought to address those issues a great deal more intensively than they do. Encouraging higher growth would give people a chance to get jobs.

The noble Lord, Lord Bates, and the noble Baroness, Lady Randerson, referred to the north-east and Wales respectively. Those areas, which have relatively low levels of income, are now being threatened by cuts in public sector employment, which will result in even lower levels of income. I heard what the noble Baroness, Lady Randerson, said about the Welsh economy. However, I have also heard representatives of the other place speak of their great concern for the Principality.

The great highlight of this debate was of course the presence and contribution of the noble Lord, Lord Heseltine. We all congratulate him on his maiden speech, although that phrase sits ill with me due to his contributions at Westminster over the years. We wish him well in the role that he is to play, particularly because, despite all the trials and tribulations of the immediate future, it is important that we have a longer-term perspective.

International comparisons can be of great benefit to us. We can learn from the way in which others tackle their business, not least because—let me make the obvious point—the US economy grew by 2 per cent last year. When the US car giants threatened to collapse, the US Government moved in. It might be that this Government should have a bit more confidence in doing so.

National Insurance

Lord Davies of Oldham Excerpts

Monday 5th March 2012 Lords Chamber

[Lord Sassoon]

Again, I am happy to hear the thoughts of my noble friend about what might be done. The national insurance holiday, which is estimated to be already supporting some 40,000 jobs in new firms, is only one part of the package to help small businesses: the reduction of the corporation tax rate, the extension of business rate relief for a further six months from 1 October this year onwards, the coming national loan guarantee scheme, as well as what the Government did with the above-indexation increase in national insurance thresholds. This is a significant package of which the holiday is only one element.

[Lord Davies of Oldham]

My Lords, the Chancellor has always claimed that the last Budget was not a tax-raising Budget, but I am sure the Minister will acknowledge that national insurance was raised. How much is that going to cost the average worker up to the end of this Parliament?

[Lord Sassoon]

My Lords, the subject of the Question is employers’ national insurance. By introducing the £21 a week above-indexation rise in the threshold, the Government benefited all employers by £3 billion a year through that very significant increase. Job creation in the private sector is in many ways very remarkable. Since the election over 500,000 new jobs have been created in the private sector, thus increasing employment, and only today Tesco announced 20,000-net new jobs in the UK over the next two years. We really must not run down what the private sector is doing to create new and sustainable jobs.

Budget Deficit

Lord Davies of Oldham Excerpts

Wednesday 15th February 2012 Lords Chamber

[Lord Sassoon]

My noble friend probably thinks that Moody’s have in mind what I have in mind: the policies of Mr Ed Balls. However, the chances of those being implemented are, fortunately, small. Only yesterday, a respected City broker from BGC Partners said:

“Ed Balls can whinge all he likes but you only have to look at a compendium of 10 year bond yields to know that the UK Chancellor, George Osborne is on the right track. For the Chancellor to take his foot off the gas in terms of cutting the debt reduction would be insanity personified!”.

[Lord Davies of Oldham]

My Lords, when it comes to whingeing the Government take first prize. They spend their time blaming either the previous Government or external forces. When will they take responsibility for the fact that they promised to encourage growth and have failed to do so, and promised to reduce the deficit and are failing on that? How much must the British people suffer before the Government change their policy?

[Lord Sassoon]

My Lords, these are very difficult economic circumstances, in this country and globally. However, to give one example of where growth policies are coming through, there are 60,000 more people in employment than there were one quarter ago. That takes the total number in employment in this country to 29.13 million—a rise of more than 250,000 in the past 18 months. We must not play down the strength of the private sector in the UK economy.

Coins

Lord Davies of Oldham Excerpts

Tuesday 24th January 2012 Lords Chamber

[Lord Sassoon]

Noble Lords may not be aware that they may have in their pocket two different sorts of 1p and 2p coins, because they were changed from cupronickel to copper-plated steel in 1992. When looking in my pocket this morning, first, I could not distinguish them and, secondly, I had not been aware of the distinction. This is well trodden territory as successive Governments have updated the coinage, and there should be no particular difficulty.

[Lord Davies of Oldham]

My Lords, the House will have derived some reassurance from the Minister's answers thus far, but given that in the not too distant future there are likely to be changes to the higher denomination coins, would it not be politic now to have a full-blown consultation on, or perhaps even a commission into, the coinage to look at the future, to give people the opportunity to make their views known and to prepare?

[Lord Sassoon]

My Lords, prepare for what? I have already said that there are no plans to change the £1 coin and I am happy to say that there are no plans to change any of the other denominations of coins. It is all rather hypothetical.

Shipping: Tax Revenue

Lord Davies of Oldham Excerpts

Wednesday 18th January 2012 Lords Chamber

[Lord Sassoon]

My Lords, the tax has achieved an estimated reduction of £45 million of tax which the shipping industry in this country would otherwise pay under conventional corporation tax. It means that we have a more vibrant and healthy shipping industry in this country. Of course there are many other associated issues that my colleagues in government keep under review and discuss with the industry.

[Lord Davies of Oldham]

My Lords, is the Minister not concerned that the obfuscation involved in his replies to my noble friend Lord Prescott's questions merely reinforces our anxiety, which has also been expressed by the Public Accounts Committee of the other place, that the Government may be guilty of treating large companies somewhat more favourably than ordinary taxpayers, and that this may be another instance of cover for a somewhat cosy deal?

[Lord Sassoon]

My Lords, I am surprised that there are any suggestions of some cosy deal. After all, this was a tax introduced by the noble Lord’s Government. He now says that he might have done a cosy deal. It has put British shipping ownership on a level playing field with other countries in Europe; it involves state aid, and the EU at some stage will review it. If anything, the complaint that we get is that other countries take unfair advantage of the EU dispensations.

As to what the other House has to say, I am sure that noble Lords will not need reminding that it was as recently as 1628 that this House stood up to another place on the question of tonnage and poundage and got us into frightful trouble, not least with the attempted impeachment of the Duke of Buckingham, who put forward the proposal. So I am certainly not going to cross swords with another place on this topic.

Economy: Government Policies

Lord Davies of Oldham Excerpts

Wednesday 7th December 2011 Lords Chamber

[Lord Sassoon]

My Lords, to repeat, the pension funds and also the insurance companies have come to Government and asked for our help. We have signed a memorandum of understanding to help them set up their vehicle as quickly as possible, because clearly they want to find an investment home for their money.

[Lord Davies of Oldham]

My Lords, does the Minister accept that the best deficit reduction strategy is in fact a growing economy? Why are the Government pursuing policies that have already reduced growth, and are destined to do so for several years?

[Lord Sassoon]

I do not accept that at all. Of course we all wish to see a strongly growing economy. The latest forecasts from the OBR are that the private sector will generate 1.7 million jobs over the forecast period. That is strong growth in the private sector.

European Union Membership (Economic Implications) Bill [HL]

Lord Davies of Oldham Excerpts

Friday 25th November 2011 Lords Chamber

[Lord Davies of Oldham]

My Lords, I, too, offer my congratulations to the noble Lord, Lord Pearson, on introducing his Bill and on opening the debate with his usual stirring speech. This has been a striking debate because, while on the whole cost-benefit analyses have played a relatively small part in our deliberations either in or out of Europe, they have been the burden of the majority of speeches. That is why, when the noble Lord is congratulated in some quarters on the timeliness of this debate, I am afraid I beg to differ. I cannot think of anything less timely than Britain beginning a potential process of long debate on whether we should continue as members of the European Community when the whole of the world is in such an intensive economic crisis.

We in Britain know the costs that are being borne by our people at the present time. We know about the increase in unemployment. We know about the reduction in services on which our people rely. Of course, our crisis looks relatively marginal compared with the crisis in the eurozone. I do not hold it against those who have long careers of criticism of the European Community to use the crisis in the eurozone to some advantage, particularly if they are in the position of being able to say, “We told you so”. At the time, the Labour Government also said, “We told you so”, because we made sure that we did not join the eurozone.

However, it is not just Europe: the United States economy is largely stalled. The one part of the world that is expressing itself in more positive terms in its economy is of course China, the other south-east Asian growing economies and India. When China is suggested as a possible solution to the problems of sovereign debt crisis in Europe, do we not learn the lessons of interdependence? Do we not appreciate that we are not going to solve these problems through unilateral action but by considerable international economic action to promote growth, develop jobs and stimulate demand?

We know that we cannot do this on our own. We know that we cannot do it readily if the European market stays as depressed as it is. Yet we have today a suggestion that we do a cost-benefit analysis on Europe. The noble Lord, Lord Bilimoria, suggested that the Treasury does this every day. The Minister will find the response to that particular point fairly straightforward. I am not so sure that the analysis is carried out in the Treasury every day in quite the comprehensive terms that the noble Lord, Lord Pearson, suggests. The Treasury should be engaged in rather more significant matters of reviving the British economy at the present time than that which is proposed in the Bill.

I had some sympathy with my noble friend Lord Lea when he asked about the methodology of the small group of carefully balanced individuals setting about their cost-benefit analysis. I appreciated rather more the contribution of the noble Lord, Lord Risby, who said that we cannot get away from our geography or avoid the consequences of the European crisis at the present time. That is why we should be directing ourselves towards new solutions to the situation.

As always, I have considerable sympathy for the Minister responding to a debate of this extent and complexity, to say nothing of passion. He will have noticed that the noble Lord, Lord Risby, is alone in being a Member from his own Benches who is not severely and totally critical of the market. The noble Lord demanded that the Minister get some pretty clear indication today that this cost-benefit analysis would bear some kind of fruit in Britain's future in Europe.

A cost-benefit analysis would certainly need to address itself to some rather tricky points. My noble friend Lord Davies of Stamford asked the obvious question of whether the Japanese motor companies would be in Britain if Britain were not part of the European Community. How does one set about counting the benefits derived from that analysis against the background where we all know where the British motor car industry was in the mid-1980s until the Japanese companies arrived here?

Surely what we need at this point of real crisis is not to cast uncertainty in Europe and uncertainty in the markets about where Britain would stand in relation to Europe. In this crisis, we do not need added uncertainty, certainly not one of such significance as this. Surely what we need are degrees of confidence. To cut ourselves off from a market of 500 million customers is scarcely conducive to international confidence. It would suggest that we had lost faith in Europe and it might even suggest that we had lost faith in our ability to compete with our European rivals.

It is clear that high-value services and highly skilled manufacturing need to be underwritten. I heard what the noble Lord, Lord Kakkar, said about the particular issues of the directives that he is concerned about. As ever, European directives certainly exercise our minds greatly in a whole range of areas, but the noble Lord would be the first to acknowledge that medical science is international in its research and international in its advances and that a great deal of that work depends on international co-operation of a high degree.

In addition to medicine, we can quote the issue that cropped up in this debate if only in passing: the whole issue of the environment. Britain has been in the lead in Europe in developing policies on the problems of our environment. We all know what the challenge is and we all know that significant costs are involved for industry and for householders as well as for the economy in coping with climate change. We also know the catastrophic consequences of us not acting. Yet Britain has been the lead in Europe on this project.

In Committee we will enjoy more fruitful debates on this Bill and analyse some of these issues with much closer scrutiny than we have been able to do in general terms today. However, although I will be only too happy to see the Bill get its Second Reading and I look forward to future exchanges, the real issues that face this country are not those of membership of the European community but more fundamental economic issues.