National Savings and Investments

Lord Davies of Oldham Excerpts

Tuesday 14th January 2014 Lords Chamber

[Lord Newby]

My Lords, as the House is aware, when we have very low interest rates, which have been necessary in the economic circumstances in which we have found ourselves, that helps very many consumers, households, mortgage holders and businesses and is on balance, in our view, beneficial to the economy. The downside, as the noble Lord mentions, is that savers get a lower rate of interest. I think it is unrealistic to expect NS&I to promote products with a higher rate of interest than market rates, because its remit is to get best value for money for the Government, but I am sure that the noble Lord and the whole House will welcome the news that inflation is down to 2%, which is the target level.

[Lord Davies of Oldham (Lab)]

My Lords, returning to the original Question, surely the noble Lord, Lord Naseby, is right: NS&I ought to be an exemplar of good practice in informing its investors rather than apparently seeking to catch up.

[Lord Newby]

My Lords, NS&I needs to be able to compete effectively with best practice across the financial services sector. The truth is that NS&I has been behind the curve. It is undertaking a major programme to get all its customers online. Bear in mind that NS&I has 25 million customers in this country. That is a massive operation. When it is finished, it will be able to give information to the standard that people expect from the best of the other high street brands.

Banks: Payment Protection Insurance

Lord Davies of Oldham Excerpts

Monday 13th January 2014 Lords Chamber

[Lord Newby]

My Lords, a great deal of publicity has been generated on this issue, and consumer organisations are looking at how they can do more. As I have said, a very considerable number of claims have already been made.

[Lord Davies of Oldham (Lab)]

My Lords, the noble Lord will recall that in 2011 the chief executive of Barclays said that the period of remorse and apology should now be over. Since then we have had this scandal, described by the noble Lords, Lord James and Lord Wrigglesworth, as breathtaking and utterly unacceptable. We have Lloyds Bank, which is still being funded from the public purse, in the middle of it. Since 2011, we have had the rigging of LIBOR and we have had RBS, another publicly supported bank, handing out massive bonuses while declaring a pre-tax loss. When are the Government really going to get tough with the banks and make sure that the Vickers reforms are honoured in spirit and in practice?

[Lord Newby]

I think that the noble Lord must have been somewhere else in recent months because I seem to remember spending many days over last autumn in your Lordships’ House putting through, under the banking reform Bill, the tougher new approval regime for senior bankers, instituting the new criminal offence of reckless misconduct and more generally looking at ways of vetting the suitability of bank staff to a greater extent. The legal framework within which the banks operate moving forward is substantially different from that in place when this Government came into office, and it will make it much more difficult, although not impossible, for many of the problems we have seen in the past to recur. It will be much easier for the regulators to take effective action if they think it is necessary to do so.

Thames Garden Bridge

Lord Davies of Oldham Excerpts

Thursday 9th January 2014 Lords Chamber

[Lord Deighton]

The issue with a garden bridge is that it is more about gardening than it is about painting, which is the case with the Forth Bridge. The initial plan for maintenance is that it will be assumed by Transport for London along with its ongoing maintenance responsibilities around London. Of course, if, as part of the capital fundraising campaign, the Garden Bridge Trust can also persuade somebody to take on the ongoing maintenance responsibilities, that would be particularly welcome.

[Lord Davies of Oldham (Lab)]

My Lords, the House will have noticed that the Treasury is answering this Question because the bridge can scarcely be defined as a means of transport. It is a very expensive piece of public art, a vanity project of the mayor—and we know where his vanity projects have gone and what they have cost the country. The cycle hire scheme is in trouble, his Emirates gondola crossing down at Greenwich carries so few passengers that it is risible, and, of course, the taxpayer will have to pick up the bill. It is true that the Chancellor has committed only £30 million at present. The question is: with a deficit, still, of £60 million, is the Treasury still in the game?

[Lord Deighton]

I am not sure what the deficit of £60 million refers to. I will run through, very quickly, the benefits of the project and how its value for money will be assessed. First, there is the pedestrian connectivity that it will give. It will switch people out of cars and on to their feet and make a very important connection. Secondly, it will increase London visitor numbers, which is very important. It will be a great visitor attraction. Thirdly, it will have significant development value, connecting the South Bank and its creative centre to the Aldwych and Covent Garden. The development it will bring on each side will have significant value. Finally, it will be a great showcase for UK expertise. Our brilliant designer, Thomas Heatherwick, is designing it, Arup is engineering it and Dan Pearson is landscaping the garden, so it will generate other future business for London through that showcase.

National Insurance Contributions Bill

Lord Davies of Oldham Excerpts

Tuesday 7th January 2014 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, it is a happy occasion when I can congratulate the Minister on his opening speech and on the accuracy with which he presented the Bill. As the noble Lord, Lord Razzall, noted, there has been a 100% contribution by the Liberal Democrats on his side of the House. He put it as two-thirds of the speakers in the debate; perhaps he should have put it as 0% Conservative speakers. After all, this is a fairly worthwhile measure, so he should not be surprised if the Opposition look on certain elements of the Bill with considerable favour.

The judgment of the House appears to be that this is a fairly uncontentious Bill. As I look around, I notice that I have not got too much support from Labour Back-Benchers on the matter. They are totally reliant on me being able to deliver exactly what is necessary in criticism of the Bill—and to express support where we see the merits of it.

The Minister will be delighted to hear that we approve of the five main provisions in the Bill, although there are areas on which we will seek additional clarification in Committee. In at least two sections there are proposals with regard to regulations and other actions of the Government where it is not entirely clear how they will be phrased in future. I want to press the Government on these matters at that time.

I turn to the real issues. The main issue is the employment allowance, which we welcome, although we note the comment of the director of the Institute for Fiscal Studies, Paul Johnson, who said:

“Whether it will actually have any measurable effect on the creation of jobs we don’t know”.

Given that there is no pilot for this measure and that it is extremely difficult to measure its effects, we may never know its real effectiveness.

Nevertheless, one must welcome a step in the right direction by the Government, particularly when we look at the next major issue of the Bill. We of course approve of the abolition of national insurance contributions on the earnings of employees under 21, although we are concerned about the introduction of the measure. The Minister clearly indicated that it is significant and important, but we will not get it for another year. The Minister may be content with that rate of progress. I must say that this Government are undistinguished in their rate of progress on the issue of national insurance contributions. I do not think that the Minister was in that role when we considered the previous efforts by the Government to introduce some stimulus to job creation by legislation or national insurance contributions, but I was certainly in my place when that Bill was introduced. It was a complete disaster in its conception and absolutely absurd in its execution.

The Government argued that there should be some regional dimension to the provision on the grounds that some regions were less well favoured than others. It was quite difficult to accept because the Government bracketed with London and the south-east, which one might recognise as being different from the rest of the country and in less need of job creation, the eastern region, as if East Anglia were a high-wage, high-employment area—but the Government were convinced of the rectitude of their position at the time. What was the result? We were told that 400,000 businesses would benefit, with the possible creation of 800,000 jobs. In fact, after three years, just over 25,000 businesses, rather than 400,000, took advantage of the scheme, so it is not surprising that it was jettisoned and that the Government, after three wasted years, addressed themselves to a more realistic approach to the issue.

We welcome the second attempt. It is infinitely better than the previous effort, but the price is three wasted years on the matter when the Government have only five years of constructive activity, even assuming that the long run-in to the general election, which is based on the concept of a fixed date for the election, allows them to be constructive in their last few months, rather than just defensive about their record. We shall see.

We express general approval for the other aspects of the legislation. We shall seek to press the Minister in Committee on the effectiveness of the measures. They depend on other legislation or secondary legislation related to NICs—in fact, NICs are only a bit player in the strategy that the Government propose. The Minister will therefore not be at all surprised if he is pressed to identify just how significant this particular legislation is, so dependent is it on other, more significant activities by the Chancellor in conducting the economy.

The scheme for offshore employees—oil and gas workers—is unexceptional, but of course many aspects of the reforms in this area are to be delivered outside the Bill, so the Minister must expect that we will press him on greater clarification there.

The Bill also provides for alternative investment fund managers and members of limited liability partnerships a strategy in which the Government anticipate a considerable increase in returns from taxation, because they will have ended what we recognise is not just avoidance of tax but unfairness between the groups concerned. We are in favour of what the Government are doing there but, again, the Minister will recognise that quite a lot of what he has said in relation to the Bill here is only part of the general picture.

At this stage in my brief response, I am entirely happy to associate the Opposition with the broad thrust of the Bill—particularly as the noble Lord, Lord Razzall, indicated that we should concentrate on the Liberal Democrat part of the coalition when discussing this matter. We will of course seek to test the Government further in Committee, while applauding the fact that the main principles of the Bill are those to which we subscribe. In particular, we recognise the application of GAAR to this area. GAAR is always going to loom up as a deus ex machina in relation to a great deal of finance legislation. It does so here, and we noted the optimistic assessments that the Minister put forward on what it may achieve. The proof of that particular pudding will be in the eating—but, as a concept, we support that interaction in the Bill.

[Lord Newby]

My Lords, I thank both noble Lords for their broad welcome for the proposals in the Bill. I am very grateful to my noble friend Lord Razzall for setting the Bill in the context of all the other measures that we have taken to support business, particularly SMEs. The Bill contains useful and valuable measures but, as my noble friend pointed out, they are only a couple of pieces in the large jigsaw of provisions which, taken together, we believe will help to sustain the recovery and put Britain on the path to strong, prosperous growth in the years ahead.

The noble Lord, Lord Razzall, referred to the findings of the Federation of Small Businesses’ survey in this area and what small businesses said they would do with the additional resource. I thought that one of the more interesting aspects of that survey was that a substantial proportion of respondents said that they would increase wages. Given that I think both the Government and the Opposition are keen that wages at the bottom end are improved, if the measure does have the impact of increasing wages—as well as generating new jobs in other cases—that will mean that it has been effective.

The noble Lord, Lord Davies, slightly chided me on the fact that I had no support on my Benches. He will have seen support flooding in during this short debate.

[Lord Davies of Oldham]

If the Minister will allow me, the verb “flood” in the present circumstances is not the right one to use.

Autumn Statement

Lord Davies of Oldham Excerpts

Thursday 5th December 2013 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, it is a pleasure to address the issues raised in the Autumn Statement in our usual atmosphere of calmness and courtesy—a rather sharp contrast with the wall of noise that greeted my counterpart, the shadow Chancellor, in the other place. This is an occasion for asking questions so I am sure that I am not going to be able to generate such excitement on the government Benches, but I hope that the Minister will answer my questions.

The Chancellor did not mention the concept of productivity, made no acknowledgment of the weakness of our balance of payments position in recent years despite the significant devaluation of the currency that we have experienced, and showed no real appreciation of the fact that real wages are still falling, among those who are employed. It is therefore proper to ask the Minister whether he is assured that the much vaunted growth figures quoted in the Statement are not based upon a somewhat insubstantial platform. Do these figures also not reflect a bounce back from a very low base indeed? The House will appreciate that even if growth reaches the figures that the Chancellor quoted, with his customary optimism, after three years of this economy flatlining, growth by 2015 will be only half the growth that in 2010 the Chancellor indicated to the nation that he hoped to achieve by the time that this Parliament had concluded.

The Minister who will respond to this Statement speaks and acts significantly on the issues of infrastructure in the economy. Will he comment on the fact that infrastructure output has fallen by 15% since 2010, and that so much which is promised remains unfulfilled? In 2010 the Chancellor also said that he was setting out to balance the books by 2015. It is clear that in 2015 we shall still have a deficit of £80 billion. That reflects the amount of borrowing that he had to do in the lean, flatlining years when no growth occurred. Will the Government persist in seeking to deny that we are in the middle of an acute cost of living crisis?

The Government are of course so wedded to the free market that they are quite unable to recognise the challenge presented by the Opposition on energy prices. After all, their belief in the market means that they cannot even recognise a standard textbook analysis of the creation of cartels, which is what the six main energy companies represent, and how that leads to excess profits. It is noticeable that the Government’s gesture in attempting to moderate the level of energy prices during this winter does not cost the cartel anything at all. It is the taxpayer who is going to meet the deficit that will occur due to the companies charging quite so much, and prices will still rise, going up by £70 in this period. For an awful lot of people in the country, £70 is a very significant sum for fuel. After all, we pay £100 to pensioners in the winter fuel allowance because we recognise the acute need that pensioners have to keep their homes warm. However, we expect all the rest of the population, whatever their incomes, to withstand an increased charge of £70.

The Government shy away from any interference with the market. However, I am a fair man and therefore the House would expect me to acknowledge those occasions when the Government do interfere—for example, the gesture with regard to payday loans, but that is a straight reflection of the pressure that had been generated from my party and in this House on the issue, and of course the Government’s response has been woefully inadequate.

The crucial thing I want the Minister to address is the constant failure of wages to match prices, which is making working people poorer. It may be that the Minister is not that familiar with those people who find themselves poor at present. He is likely to meet an awful lot of people—his friends certainly have many associates among the banks—in the banking fraternity, at the highest levels, who are of course not feeling the pinch at all. Hedge funds, too, are not noticeably short of returns. That is to say nothing of the growth of high salaries right throughout British commerce and industry, while wage levels stay stagnant. It is only accidental that some of those groups have a profound interest in sustaining and supporting the Conservative Party both between elections and at election time. We are not seeking to be too controversial today so the Government need not comment on that particular point, but I want the Minister to respond on the issue of falling wages.

It is quite clear that the Government are committed to a position. The Chancellor waxed with some strength over the fact that there will be a cap on welfare and very severe constraints on public expenditure, and gave the briefest outline of what that would mean. We all know what it means: five more long and hard years. We also know who is going to bear the costs of those five long and hard years—those who have done it since the coalition came into office in 2010.

The other obvious question is: if the Government are so wedded to free markets, do they consider that the free market worked well in the banking crisis of 2007-08? That was not a failure of anything except the free market. I notice some excitement on the government Bench, because they have worked out that in 2007-08 Labour was in power. That is certainly so, but we were not in power when the Big Bang freed up the City to create the successive market mechanism, and whenever there were suggestions of anything to do with regulation we know on which side the Conservative Opposition were. Of course, they have shown themselves to be exactly the same in the energy debate.

Will the Minister confirm that the Chancellor envisages—if, by some mischance, this Government, or a Conservative version of them, were retained in office—aiming for the size of the state in public expenditure to go back to the levels of 1948? To contemplate that in a modern society merely demonstrates that ideology dictates this Government’s economic policies, not the welfare of the nation.

[Baroness Thornton (Lab)]

Answer that!

Taxation: Rental Income

Lord Davies of Oldham Excerpts

Tuesday 3rd December 2013 Lords Chamber

[Lord Newby]

My Lords, as the noble Lord mentioned and the noble Baroness raised again, this is an extremely important and live issue, which I will raise again with my colleagues in the DCLG.

[Lord Davies of Oldham (Lab)]

My Lords, is the Minister, a member of the Liberal Democrat Party, in favour of a mansion tax, which would certainly go a long way to dealing with this in terms of transparency of who owns property? He should be a little careful if he denies the validity of that, because the Chancellor has an awkward habit at present of listening to what the Labour Front-Bench says one day and doing something similar to it the next.

[Lord Newby]

My Lords, I am sure that the whole House knows that the Liberal Democrats are in favour of a mansion tax. I remind the House that, in the recent Budget, the Government introduced an annual tax on high-value dwellings—so-called enveloped dwellings —owned by companies, which will generate from £15,000 a year for properties worth between £2 million and £5 million to £140,000 a year for properties worth more than £20 million.

Banking: Lending

Lord Davies of Oldham Excerpts

Tuesday 12th November 2013 Lords Chamber

[Lord Newby]

My Lords, in respect of SME lending more generally, gross lending is now rising. The picture is clouded by the fact that a lot of SMEs are still paying back loans, so the net position is not as positive, but net lending is down by a much lower amount. As far as lending to SMEs as a whole is concerned, the picture is improving. The Business Bank was launched on 17 October and it aims to support economic growth by bringing together public and private sector funds to improve financial markets for SMEs. Very recently it announced its first commitment of £45 million from the initial £300 million investment programme.

[Lord Davies of Oldham (Lab)]

My Lords, does the Minister think that his answers thus far will have given any satisfaction to those vocal critics of the low level of lending by banks to business, who include the director-general of the British Chambers of Commerce, the International Monetary Fund and the Business Secretary, Vince Cable?

[Lord Newby]

My Lords, it is important to look at what is happening in the real world. The CBI’s SME trends survey, published yesterday, showed that SME business optimism was rising at the fastest rate since the survey began some 25 years ago. Among SMEs, output grew for the fourth quarter and is expected to grow more rapidly going into 2014. More generally, vacancies—the best indication of growing or falling demand for labour—are rising at the sharpest rate for more than six years.

Families: Cost of Living

Lord Davies of Oldham Excerpts

Thursday 31st October 2013 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, this has been an excellent debate, and we owe a debt of gratitude to my noble friend Lady Prosser for both securing the debate and introducing it in such an expansive and perceptive way that it gave all other contributors some substance on which to cohere. She reflected on the changes in our economy and society over the past three decades, and the change in the nature of work. We have moved from a much more substantial manufacturing base 30 years ago and lost our capacity to make cars, unless the Japanese are employing British workers; all our companies apart from Jaguar Land Rover went down. The movement from the manufacturing industry to the services industry has produced a change for workers, with much greater part-time work; the emergence of the concept of zero-hours, which seems such an offence to the dignity of people presenting themselves for work; and the reduction in the bargaining power of the workforce.

The Government are represented today by a single voice from the Back Benches, the noble Lord, Lord Horam, who introduced some challenging concepts on which, if he will forgive me, I will not dwell too much on this occasion, because my noble friend Lady Drake raised the whole issue of how much the reduction of equality leads to the impoverishment of society, and what that means to those at the bottom end.

I am very grateful to the right reverend Prelate for identifying the community and local dimension of difficulty in acute economic circumstances, where a whole neighbourhood is beset by poverty among so many households. My noble friends have been concerned to emphasise the sheer blatant facts of the failure of wages to maintain the level of inflation. For wages to be stagnant over a decade when the inflation rate is more than 2.5% throughout that period is a reduction in the resources of working people. That is to say nothing about the level of unemployment, which also means that very many do not have work at all. Those in work have also suffered greatly in that period, at a time when on all sides we have been beset by the concept of the bonus culture and the “get rich quick” dimension of the City.

If we are talking about inequality, let us talk not just about inequality between groups but between regions. The real desperation of our nation at present is a ridiculous concentration of resources in London, which distorts the whole perspective of national statistics, but is reflected in the fact that ordinary Londoners are less able to get homes than people in other parts of the country. I was very grateful to the noble Baroness, Lady Tyler of Enfield, for her reflections on that point. She also raised the crucial question of energy. Let me emphasise that as we approach the depths of winter, the anxiety of people faced by the increase in energy bills at present is profound. Added to the insecurity which they suffer about the world of work, they are now facing circumstances in which the increasing bills will thrust many of them into considerable debt and, in order to avoid debt, into taking risks with keeping the household warm.

I know that there has been an element of dismissiveness about Ed Miliband’s proposal for a price freeze. However, that freeze is to do two things: first, to protect people in this crucial period of need so that further increases do not take place and, secondly, because we are concerned to restructure this imperfect market represented by energy. Of course, that means looking at the structure of Ofgem and its failure to avoid a situation in which our energy is overwhelmingly run by a group of six in a cartel, which play follow my neighbour in enriching themselves at the expense of ordinary members of the public.

One dimension that has not come into this debate but which is also of great significance to people on low incomes is the increasing cost of transport. I emphasise the cost of buses. Poor people do not travel a great deal by train, although those people who do become poor because of the massive increases in fares that the rail companies are able to perpetrate. Poor people travel on buses and are continually seeing those fares increase by more than double the rate of inflation. Travel costs are a very great concern for the person with a part-time job, and limited opportunities to work, who has to travel. That is so even for the person with a full-time job who has to travel. It is also true for our young people. How are they meant to get to their colleges and engage in education in circumstances where travel costs are so great?

I emphasise also a fact which my noble friends have covered very fully, as they have all aspects of this debate. There is a real issue of the pressure on housing. A very large percentage of our population are now in the private rented sector, and we all know the rate at which rents are increasing. Nothing is more disturbing to a family or to individuals than to feel that their housing costs are running out of control. As for whether one can get into the housing market with a purchase in London, unless a family is earning £100,000 a year its entry into the housing market is very difficult indeed. We all know the particular approach of the Government in their limited position with regard to 5% mortgages. The anxiety about that is obvious enough: that it will stimulate a housing bubble which will put us back to 2007-08, unless we are very careful.

In this debate, my noble friend Lady Prosser engaged with the fundamental issues of how people protect themselves and achieve security in a society in which so many issues are stacked heavily against them. She was followed by contributions from all parts of the House, but overwhelmingly from my own Benches, which have identified just where the Government need to act. It is a tough agenda that we have set for the Government, but the Minister has already been identified as our treat, so let us listen to him.

Taxation: Tax Law Enforcement

Lord Davies of Oldham Excerpts

Wednesday 30th October 2013 Lords Chamber

[Lord Newby]

My Lords, I absolutely agree with my noble friend. I would remind him that this Government reinvested an additional £917 million in compliance activities in the 2010 spending round. They added another £77 million in last year’s Autumn Statement. Therefore, we have a track record of providing HMRC with additional funding, should it come forward with proposals that result in additional tax yield. It is not inconceivable that HMRC might come forward with such proposals in respect of this year’s Autumn Statement.

[Lord Davies of Oldham (Lab)]

My Lords, should Ministers not be taking some initiative, irrespective of HMRC and its officials? Are Ministers aware of the level of anger in the country, and not just against the multinationals? We all recognise that that is a challenging nut to crack and needs international co-operation. Internal British companies—not least the energy companies—are able to locate their senior companies in offshore tax havens in order to avoid paying their legitimate tax. Is the Minister not aware that action is necessary from Ministers and not just from HMRC officials?

[Lord Newby]

I think the decision taken by Ministers to give an additional £1 billion for compliance activities was pretty clear. Many of the problems that we see with multinationals paying less tax than would appear appropriate are international by nature. That is why we have put a lot of resources into the OECD. We put another £400,000 into the work that it is doing following the G20 summit earlier this year. There is a determination across the international community, to a degree that has not been apparent before, that companies cannot get away with avoiding taxes. This must be dealt with internationally, and that is what we are promoting effectively.

Tackling Corporate Tax Avoidance: EAC Report

Lord Davies of Oldham Excerpts

Wednesday 30th October 2013 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I have read the report and congratulate the committee on the excellent work it has done and the judicious way in which it has presented its arguments. The chairman of the committee who introduced the report today—the noble Lord, Lord MacGregor—continued that pattern in identifying the committee’s arguments. He indicated that the Government had not responded constructively to an issue which the committee clearly recognises is one that exercises the public and is of considerable immediate importance. The chairman’s judicious and careful presentation was somewhat submerged in the subsequent debate in which noble Lords forcefully expressed the view that the Government’s response was utterly inadequate. I think that the noble Lord, Lord Lawson, called the response lamentable. Other noble Lords have indicated that the response goes beyond complacency and is not worthy of a government response to a Select Committee report.

I will comment on several of the speeches made in the debate but it also falls to me to congratulate the noble Lord, Lord Leigh, on his maiden speech, in which he expressed himself with great precision. However, he also did something which is quite exceptional in this House in that he apologised for speaking briefly. He will not encounter brevity too often and he will never find it accompanied by an apology except on this occasion. However, we are grateful to the noble Lord for the points he made.

My noble friend Lord McFall wasted no time in identifying the context in which the report was presented. The committee feels very hard done by in terms of the Government’s response given the serious level of public discontent about corporation tax that has manifested itself over the past 18 months. The public outcry was sufficient for Starbucks to decide that it merited a gesture on its part in the form of making a contribution to the Revenue. My noble friend said that the public felt there was a breakdown of the national contract. That may not be putting it too high. After all, everyone knows that in this time of great austerity and difficulty, when wages have not increased over the past 10 years, people are paying their taxes, as they are obliged to do, and they find it scandalous that some large organisations can treat corporation tax almost as a voluntary levy to which they pay mere lip service. That is why the Government’s response ought to be much more positive.

We have encountered many difficulties with regard to these issues. My noble friend Lord Browne referred to the scale of the tax gap and asked whether that gap was increasing or decreasing. There are clear reports that in the last recorded year the gap was £34 billion, and that it has gone up £1 billion since then. However, as my noble friend indicated, it is very difficult to put the basis on which these figures are presented into clear perspective. That is why it has been constantly argued throughout the debate that the first thing we need is transparency on the part of companies and the second is accountability on the part of HMRC. We all know what the Government’s response was to the question of accountability. The committee stated:

“The threat of naming and shaming represents a reputational risk to companies; and may therefore have the effect of encouraging boards to make sure that the companies they run are not using inappropriately aggressive tax avoidance strategies”.

The Government’s response is that the Government are subject to taxpayer confidentiality rules that protect the tax affairs of all taxpayers. In other words, there is to be no advance in that area, or on the committee’s constructive recommendation that there should be parliamentary scrutiny not dissimilar to that which obtains with regard to the security services: that is, a parliamentary committee should be established to look at these issues on a confidential basis. However, the Government are, of course, utterly and totally dismissive of that proposal. This will not do. It certainly will not do against a background of a determination to make progress in this area at an international level, as my noble friend Lord Brennan indicated. Where is the UK to figure in this? The committee obviously hoped that we would be in the van of progress. The Government’s response makes them look as if they want to be as distant from such progress as they can possibly be.

The Minister has a significant task ahead of him in winding up the debate. I have not even reinforced the points which my noble friend Lord Hollick made about the successful use of eurobonds on the part of multinationals, and indeed on the part of some British companies which are not multinationals. Thames Water, which has approached the Government on the issue of a subsidy with regard to a big investment it wishes to make, is also reducing the tax it pays through the use of the eurobond device which my noble friend Lord Hollick identified. However, there seems to be no response whatever to that point.

Has corporation tax had its day, to use the colourful phrase of the noble Lord, Lord Lawson, who should know about these things? I do not know whether that is the case but it is certainly in need of considerable reform, as the committee identified. The Government’s response makes them look as though they regard those arguments as having being drafted on another planet and therefore are ones to which they have no need to make a coherent, consistent or constructive response. I hope that the Minister does rather better this evening.