Budget: Taxes and Borrowing

Lord Deben Excerpts

Monday 4th November 2024 Lords Chamber

[Lord Livermore (Lab)]

I absolutely agree with the importance of investment to the economy, which is why we have set out an investment rule which enables exactly that. The Government’s number one commitment is to economic and fiscal stability, which is why we have put in place those robust fiscal rules. It is interesting to note that average borrowing over the next five years will be 2.6% of GDP compared to 5.6% of GDP over the previous 14 years.

[Lord Deben (Con)]

My Lords, the Minister told the House that there were no promises broken in the Budget. The Secretary of State for Defra, which looks after agriculture, promised farmers that there would be no tax on inheritance. Why has he not resigned?

[Lord Livermore (Lab)]

On inheritance tax, currently the largest estates pay a lower effective tax rate than the smaller estates. I do not think that that can be right. Agricultural property relief is given on top of the normal inheritance tax thresholds. Individuals can pass up to £500,000 to a direct descendant, and then agricultural property relief would provide a further £1 million tax-free allowance. This means a couple can pass on up to £3 million tax free. Above that, there is a 50% discount on inheritance tax, so a rate of only 20% applies, and any liability can be paid in 10 yearly instalments. This seems to me to be pretty fair in the context of the decisions we have taken and in the context of what everyone else in society gets.

Buy Now, Pay Later: Regulation

Lord Deben Excerpts

Wednesday 7th February 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I am not sure whether the noble Lord has looked at what the late payment fees are for buy now, pay later firms. They are incredibly small, because the business model is very different in that it does not necessarily rely only on such charges; they are paid by the retailers as well. As I said, all sorts of existing and broad consumer protections underpin fair contracts—that would be the Consumer Rights Act. The FCA has already taken action against six buy now, pay later firms, where it felt that the contract terms were either unfair or unclear. The system is working; it is a very complicated area; the Government are looking at the responses to the consultation, and we will publish a response in due course.

[Lord Deben (Con)]

My Lords, does my noble friend accept that, if we do not do this carefully, we will be removing opportunities from a large number of people for whom this is important? Is not the rush to regulate a very dangerous concept in this case?

[Baroness Vere of Norbiton (Con)]

I agree with my noble friend.

Financial Services and Markets Bill

Lord Deben Excerpts

Committee stage
Thursday 23rd March 2023 Grand Committee

[Lord Deben (Con)]

If my noble friend is saying what the noble Baroness asked, she is making a very serious change. To object to the changes being recommended on the basis that this is the wrong place seems to me to be quite difficult to uphold.

[Baroness Penn (Con)]

The Government will make those changes only within the agreed scope set out in the Bill. That is perhaps why the DPRRC was content with the approach that they were taking.

Financial Services and Markets Bill

Lord Deben Excerpts

Committee stage
Wednesday 1st March 2023 Grand Committee

[Lord Hill of Oareford (Con)]

My Lords, I will speak briefly but strongly in support of this amendment and, in doing so, state my interest as the lead NED at the Treasury and as an adviser to a number of global and European financial businesses.

It is a pleasure to follow the noble Lord, Lord Vaux, because he made the point that I wanted to start with: we must not think of this as an alternative to parliamentary scrutiny. We all agree that we need much more thorough parliamentary scrutiny; this amendment would help Parliament to do its job. The point that the scrutiny is to be fact-based and analytical is key.

The proposal for the overall framework of scrutiny has an OFRA-sized hole, which this amendment would fill. It is rare to find an amendment where you cannot detect anyone who is going to lose from it, but I can see only an upside for all groups with this amendment. It would be good for the regulators, as we have heard, because it has the potential to detoxify the political debate. It would be good for the Government because it would provide a more stable, long-lasting framework. We need to get this right now because I do not know when next a Bill will come along that will enable us to look at this framework. We have been waiting for a long time, since 2016, so we need to get something that is stable and going to endure. As we have argued, it would be good for Parliament because it would aid its task of scrutiny and it would be good for the financial services sector, which is our most important contributor to tax revenue, because it would provide an analytical basis in which it could have confidence and trust. My noble friend Lord Bridges has presented the Minister with a gift horse and I very much hope that she will not look it in the mouth.

[Lord Deben (Con)]

My Lords, I remind the Committee of my interests, including chairmanship of PIMFA, which represents financial advisers, and at Sancroft we advise a number of financial institutions on sustainability.

I merely want to say that one of the groups of people who will benefit considerably from this are those who are regulated. The fact is that we need to recover confidence in the regulator in two particular areas. The first is what I call the conflicts between regulators, for which there is really no way of unpicking them so that they can work more effectively. That is particularly true among many of the people with whom I deal almost every day.

The second reason why this is so important is that I do not believe that anyone should be unaccountable if they have a public position. I very much agree with the noble Lord opposite who talked about the terrible opera story. I just do not think regulators can do their job properly unless they look over their shoulder to the public as a whole, which is what we are talking about in this bit regarding accountability. As a Minister for 16 years, I know that one’s accountability to Parliament and the public was an essential part of doing the job properly. One had to say to one’s civil servants, “Look, we can’t do that because it really would make people feel that we were behaving in a way that was unacceptable to Parliament or to the public.”

That is the problem for the boards of these regulators, which seems to me to be one of the issues. As my noble friend Lord Bridges suggested, some say that the boards should deal with it. That is not possible unless a board is itself accountable to the public and, in that sense, to Parliament. I do not believe that you can expect the boards to do their job of saying to the regulator, “Look, I’m sorry, you really can’t do that”, or indeed, “You can and should do this”. I am not suggesting that it should always be “Don’t do it”; sometimes it should be “Do it”. Later on, for example, we will discuss the issue that in the City of London the regulator does not insist that a competent person says not only whether, for example, there are gas deposits but whether under the law of Britain those gas deposits will be able to be used, which is just as important. At the moment the regulator does not do that and there is no way of insisting that it should. I therefore strongly support what my noble friend Lord Bridges has said.

[Lord Forsyth of Drumlean (Con)]

My Lords, this amendment is absolutely inspired. We had a debate earlier about the merits of parliamentary committees, and it was questioned whether they would have sufficient resource to do the work. I am very taken by what the noble Lord, Lord Tyrie, had to say. At the risk of embarrassing him, he was a very distinguished member of the Treasury Select Committee and did some fantastic work there. He comes from a background in the Civil Service and has experience inside government. Therefore, we should take very seriously what he had to say about the merits of this proposal.

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In the meantime, my only remaining question is to ask whether the Minister accepts that the RDC has some concerning shortcomings. If so, it would be much easier for us all. Perhaps the Minister can take this problem away, ask for an independent assessment of the RDC’s performance and then publish the results. If that does not take place, perhaps it could be an early project for the scrutiny body proposed by the noble Lord, Lord Bridges, which could do a thorough report on the job and advise on how to improve the RDC’s performance.

[Lord Deben (Con)]

My Lords, much of what we have just heard would be very much supported by the group of people with whom I work. We do not want to reduce the protection of either group of which we are speaking, particularly small people asking for redress.

The ombudsman service needs reform; there is no doubt about that. We really have to discuss putting some stakes in the ground about not blaming people for things they would never have thought of at that point because we now think of them. I am afraid that my noble friend Lord Lilley’s amendments do not help us in that direction. In other words, all the issues I would want to raise about the ombudsman are not covered by these amendments. Similarly, it is true about the protection of people from the effect of investigation, even when that investigation turns out not to be justified.

I finish by reminding the Committee of the original discussion we had. We need a system that people see to be fair and is shown to work effectively for small as well as big people. I do not think these amendments will help this, but I hope we will be able to have changes. I do not think that you should accept any changes just because you want changes, and I submit that these are the wrong changes.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I am speaking later than I would have in the debate, due to the absence of my noble friend Lady Kramer. The Committee will be pleased to know that I shall not try to say everything that I would have said, as well as everything that she would have said.

It is well known from the previous FSMA that I support independent review. I had an earlier amendment to this Bill suggesting the use of the NAO, to which the noble Lord, Lord Bridges, referred. I am pleased to support his amendments, which I have put my name to and which lay out a much more thorough range of new provisions. At this stage, I should probably remind the Committee of my interests in the register, in that I am a director of the London Stock Exchange, as I am going to talk about my regulator.

The UK would not be alone in having independent review of financial regulations as part of its accountability. That was one outcome of the review of the financial crisis in Australia. I have been around this argument many times, and today it has already been eloquently explained by the noble Lord, Lord Bridges, so I pose instead the question: what happens without an independent review? One thing that is certain is that there will be complaints about regulations and, by and large, the regulators will defend their work. Parliament’s committees will try to scrutinise, but that is a public process—or it has been called the political process. They are well adapted to do the kind of inquiry that they do and often get into the nub of the matter. But as we have found out in the Industry and Regulators Committee, it is difficult to get industry to state in public what its issues are with the regulators. As I have pointed out with amendments and speeches on previous days, the Government do not give any legislative status to the parliamentary reports, so there is scrutiny but no consequence, which is not accountability.

Additionally, within intensively supervised frameworks, such as that which exists, probably uniquely, in the financial services sector, there is genuine concern on the industry side about regulators’ retaliation or suspicion if they complain. I acknowledge that the heads of the regulators have said that this would not happen, and would be wrong, but that does not allay concerns or whispers about this most crucial of relationships between industry and its regulators, where every word is guarded. There are also genuine concerns that explanations require public disclosure about investigations or other difficulties that firms may have faced in compliance, which they would rather not put in the public domain—for example, out of commercial confidentiality about future plans and not for reasons of bad behaviour.

Industry will therefore instead bend the ear of government through many of the private channels that it has, whether through the Treasury or at Cabinet level—for example, as it has about international competitiveness. The Government may choose to act, as they have in that instance. Meanwhile, the public channels remain uninformed or unconvinced, because—and I refer again to the experience of the Industry and Regulators Committee—we were given evidence of only operational inefficiency and not of rules that caused any lack of competitiveness. How is public trust to be maintained under these circumstances? How is there to be the legitimacy that has been spoken about? How are reviews to get through the confidentiality concerns in a way that the public trusts?

The Minister has sat tight on review in all the previous debates on this Bill and the previous one, saying that the Government have given themselves powers to satisfy those requirements—powers to ask the regulator to review its rules. I do not object to that, but it hardly has any independence or new eyes. There are powers to seek independent reviews but as we know from experience, because those powers have been around for a while, such reviews have not been used quickly or frequently. They tend to follow a sequence of disasters, as the Gloster review did, and not to be done in any checking or anticipatory way. I understand why that is, because government must keep a certain distance and look for some systemic concern rather than one-off causes, but that distance leaves a gap.

Of course, there are powers to intervene by way of directions, which need to be used with care if the independence of regulators and international respect for them are to be maintained. None of those powers satisfactorily address how there should be checking in a way that permits private submissions but remains free of it looking as if government either is interfering too much and getting too cosy with industry, which is what it will look like if the Government use their powers to intervene as much as might be needed, or never acts until there has been substantial damage, when it really is too late.

I would also be interested if the Minister would inform the Committee of the level of resources and number of personnel that the Treasury is able to put behind its own monitoring, and whether it is free from reliance on industry and consultancy involvement. It is no good if it is just sent back to the same people, who will give the same information as comes in through the private channels anyway. How is that meant to be independent? I hope the Minister will take account of the fact that calls for independent review, as well as enhanced parliamentary scrutiny, come from all sides of the House and need to be addressed. There should be some serious conversations before we get to Report.

I will briefly say a few things about the amendments put forward by the noble Lord, Lord Lilley but I agree entirely with the noble Lord, Lord Tyrie. It would be a dreadful shame if one of the major achievements of this Parliament after the last financial crisis were watered down or, even worse, set aside. I fear that, as has been explained, that could well be the case. When the noble Lord, Lord Lilley, introduced his previous amendments, I said that I am not totally against a libertarian approach—one where you have to take care, and if you get it wrong then you are for the high jump—but that is not what is presented here. This proposal would make it extremely difficult for the regulators. It does not fit with the kind of regulatory system we have, with its underfunded regulators. It is a way to make it easy to set aside what the regulators have done. Given what I just explained about the relationship that firms have with their regulators—one of the reasons why, regrettably, they will shy away from legal action—it will not necessarily overturn that.

I do not agree with the predictability and consistency objective, for the reasons that others have explained: we want agility and change, and have to adapt to circumstance. If something comes to court, surely it could remain that a judge ultimately applies it, but that would be in the light of circumstances and an acknowledgement that circumstances change and regulation necessarily proceeds.

Likewise on a good-faith defence and reasonableness, my take on the senior managers regime is that the whole point is to make individuals be proactive, rather than just coasting along in what has been a comfortable way of life—how things have always been done. It has meant they have to engage their brain, think about it and update in the light of circumstances. Just saying, “There was a set of rules and I complied”, is not meant to be enough; you have to take account of what is going on.

Is there not a conflict here to some extent between people on the one hand talking about wanting principles-led regulations and, on the other, talking about that being vague? There are complaints that there are too many rules, yet it is industry compliance departments that are first off the blocks saying, “Where are the rules? Give us the rules! I want to know where to put my tick”, so I am not sure which section of the market this proposal is supposed to serve.

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[Baroness Penn (Con)]

Whether it is there to aid others in the accountability structure or is an accountability body itself is a further question, but its proposed role raises questions about, for example, how transparently it operates, as the noble Baroness, Lady Bowles, touched on, and other such considerations. I merely said to my noble friend who raised this point that the establishment of the OBR happened in a Bill of its own after a manifesto commitment, and that it had been up and running for some time before it was put into statute. It is not unreasonable to say that considerations need to be made when we think about this issue.

[Lord Deben (Con)]

There are certainly considerations, but surely one of them is that we have an opportunity to make the change in this Bill, and we will not have another opportunity for a very long time. The Minister is proposing that we do not do it, frankly. Therefore, let us do it in this Bill, because it is the one opportunity that we have.

[Baroness Penn (Con)]

My Lords, I would never want to speculate as to future parliamentary timetables. My noble friend Lord Naseby talked about the importance of listening to those who are impacted by the provisions of the Bill. He spoke about the City, and we have heard various points of view in that respect. I would add consumers into that mix, too. I say to noble Lords that the Government have consulted extensively on the approach we are taking in the Bill, and we have received a number of responses on this specific issue in both future regulatory framework review consultations that took place. Although I absolutely recognise that a small number of respondents were supportive of further consideration of such a body, the vast majority were focused on how existing mechanisms for accountability to Parliament and government and engagement with stakeholders could be strengthened. The Government therefore decided, in response to those consultations, against creating a new body, and focused on ensuring that the mechanisms for Parliament and government to scrutinise the regulators are effective.

Energy Profits Levy

Lord Deben Excerpts

Tuesday 7th February 2023 Lords Chamber

[Baroness Penn (Con)]

I absolutely agree with the noble Baroness on the importance of protecting consumers, including vulnerable consumers. We have the energy price guarantee and other support for them, for example, through increasing rates of universal credit. I completely agree with her on the need to focus on energy efficiency, but I disagree on her interpretation of the current regime as having “loopholes”. They are about encouraging investment in the sector, which is incredibly important for our energy security and for keeping bills down in the longer term.

[Lord Deben (Con)]

My Lords, in the announcement of record profits, BP has said that it is not going to reach the very moderate targets it had for moving towards net zero. The Climate Change Committee is constantly saying that this is not just a government problem but a business problem. What discussions are the Minister and her department going to have with BP to get it back on track?

[Baroness Penn (Con)]

The Government regularly engage with all sectors on their net-zero targets. When it comes to the oil and gas sectors specifically, the changes that we made at the Autumn Statement increased the level of tax relief for decarbonisation of the production of oil and gas better to incentivise companies to take more action in that area.

IMF Economic Outlook

Lord Deben Excerpts

Tuesday 31st January 2023 Lords Chamber

[Baroness Penn (Con)]

I do not, but I will write to the noble Baroness if there is something available on that matter.

[Lord Deben (Con)]

Does my noble friend accept that, if we are to equal the United States, we have to have investment in new green businesses which help in the battle against climate change? When will the Government bring forward the legislation that is necessary to do that? At the moment, we are wildly behind, which is clear from both the Skidmore report and the Climate Change Committee’s report last June—where I declare an interest. I dare say that “freedom” from the EU is not something that any exporter would believe today.

[Baroness Penn (Con)]

My noble friend is right about the importance of investment, which is why the Government are maintaining record levels of capital investment: £600 billion over the next five years. We have permanently set the annual investment allowance at its highest-ever level of £1 million. My noble friend is also right about the importance of green investment and driving green growth in our economy. We have one of the strongest legislative frameworks for tackling climate change and nature loss, and we will continue to build on that. Our record is clear: we are one of the most significant decarbonising economies in the G20, and we have achieved that at the same time as growing.

Economy: Public Finances

Lord Deben Excerpts

Tuesday 24th March 2015 Lords Chamber

[Lord Newby]

My Lords, one of the main reasons why we need to get debt under control is that the long-term borrowing costs are very significant. Whatever the interest rate, even with current low rates of interest, we are spending 2.5% of GDP per annum on servicing it, significantly more than we spend on the aid budget. Because interest rates are low and because we have a very credible economic policy, we have been able to borrow long term at low interest rates—but none the less we need to get the debt down because we want to get the borrowing costs down.

[Lord Deben (Con)]

Does my noble friend accept that the Government’s change of heart, which has meant that every taxpayer now has a proper breakdown of where their tax goes, is an enormous advantage? If you read it carefully, you see that the cost of our membership of the European Union is extremely small, very good value and that is where we should stay.

[Lord Newby]

I completely agree with the noble Lord.

Small Business, Enterprise and Employment Bill

Lord Deben Excerpts

Tuesday 17th March 2015 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, we debated on Report whether the Equality and Human Rights Commission should be excluded from the small business appeals champion in the Bill. I committed to consider the question. Amendment 5 now delivers an exclusion. The Government have always maintained that the EHRC is a very special case and should not be subject to the duty to appoint a champion. We considered that an exemption in secondary legislation would be sufficient, but noble Lords were concerned about this and the potential implication for the EHRC’s “A” status as a national human rights institution. The Government believe that there is only a very small risk here, but we have listened to noble Lords and agreed to eliminate the risk altogether with this amendment, which I know from the debate will be welcomed across the House. I beg to move.

[Lord Deben (Con)]

My Lords, I thank my noble friend very much for this concession. I entirely agree with her that nobody in this House thought that the Government were not going to do this. We understood that there was no malice aforethought in any sense at all, but it is surprising how people can make malice if they can find a way of doing it, and many people were suggesting that, in some way, the Government were taking control over this independent body, which would be unacceptable internationally. That is why we made the point, and I, for one, am very pleased that the Government have accepted it. I thank my noble friend for the courteous way in which she has dealt with this and, indeed, the detailed answer that she has given us.

[Lord Stevenson of Balmacara]

My Lords, this is a strange moment because exactly the same arguments and debates—indeed the same personnel—debated much the same amendment in the Deregulation Bill, as the Minister has explained. The result on that occasion was that the EHRC was not excluded from the Deregulation Bill. In a sense, the points made by the noble Lord, Lord Deben, are entirely correct. I think that we as a House are convinced that the Government do not wish any ill on the EHRC and wish to see its “A” status preserved. We have excluded it from this Bill—which had a small but important adjunct of policy which bit on the EHRC—but we have not excluded it from the Deregulation Bill, which covers a much larger area. Obviously the Minister has skills way beyond those with which she came into this House—and there were many when she arrived. She has gained in strength and capacity. She has been able to do the impossible in going round the magic circle of Cabinet committees in a record-breaking time and I congratulate her on this amendment.

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[Lord Deben]

My Lords, as a representative of the rebellious tendency on this Bill, I thank my noble friend for the considerable improvements to the Bill as a result. It has been an example of the House of Lords at its very best. We now have something that will make a difference in a lot of areas and which has removed some of the things that might have made a difference in the wrong way. We owe a great deal to the Minister responsible because, as the noble Lord, Lord Stevenson, said, she has achieved things that many others have not.

[Baroness Neville-Rolfe]

My Lords, I thank noble Lords for their warm and gracious words and put on record my thanks to everyone who has played a role in supporting the rapid passage of this sizeable Bill through our House. I start by thanking the Lord Speaker and all Deputy Speakers who have facilitated our proceedings, as well as the clerks, the doorkeepers and our skilful reporters in Hansard. As other noble Lords have done, I thank the excellent, hard-working, never-complaining members of the Bill team and officials from the 12 departments who have supported our debates.

This is a wide-ranging Bill. We have considered it from A to Z: right from access to finance through to zero-hours contracts and beyond. We even mentioned Gibraltar and fish and chip shops. I thank all noble Lords for their contributions to our debates and for the detailed scrutiny they have given the Bill. Having benefited from the expertise for which this House is renowned, the Bill now returns to the other place much improved.

We have heard a range of expert voices from the opposition Benches, helped by their excellent apprentice. I am grateful to noble Lords, particularly the noble Lords, Lord Stevenson and Lord Mendelsohn, and the noble Baroness, Lady Hayter, who are in their places, and the noble Lords, Lord Young of Norwood Green, Lord Mitchell, Lord Grantchester and Lord Watson, and the noble Baronesses, Lady Jones. I thank them for their constructive, but challenging, approach and for working with me and my officials outside the Chamber.

We have added new provisions on equal pay and on whistleblowing. I thank the noble Lord, Lord Wills, for mentioning that and for the stand he has taken in that area. We have reached agreement on the vital pubs measures in a form that is workable to deliver the protections that tied tenants need. I also thank my noble friend Lord Hodgson for providing the perspective of the pub investor so eloquently. Although there has been a lot of passion on either side of the debate, I am glad for the drinkers among us that it was mild-mannered and that nobody has been left feeling too bitter.

Finally, I thank my noble friends Lord Popat, Lord Newby, Lord Nash and Lady Verma, who have so expertly assisted me at the Dispatch Box, as well as my many noble friends who have supported the Bill from the government Benches, especially my noble friend Lord Stoneham, who has attended every day and made the most excellent contributions. I also thank my noble friends Lord Borwick, Lady Harding and Lady Mobarik, who gave us the strength of their business experience on this, their maiden Bill, and my noble friends Lord Lee, Lord Flight, Lord Ridley, Lord Phillips, Lord Freeman, Lord Deben—and his rebellious tendency—and Lord Young of Graffham, who was the inspiration for our public procurement measures.

It is now vital that this Bill proceeds to Royal Assent swiftly so that we can start to reap the benefits for small businesses. It will open up new opportunities for small businesses to innovate, compete and secure finance—to create jobs, to grow and to export. As we call last orders on the Bill, I am sure that is something all noble Lords will want to toast.

Small Business, Enterprise and Employment Bill

Lord Deben Excerpts

Wednesday 11th March 2015 Lords Chamber

[Baroness Butler-Sloss (CB)]

My Lords, I very often find myself in disagreement with the noble Baroness, Lady Hollis, as she knows very well, but on this occasion I strongly support her powerful and very moving speech. We are talking about a disadvantaged section of the workforce. As the noble Lord, Lord Stoneham, has just said, the wording of the regulations is a matter for the Government of the day, who could therefore keep regulations in such a way as to allow the maximum flexibility. However, I felt that he was not thinking about the single mother or the examples given by the noble Baroness, Lady Hollis, such as the woman who gets somebody to look after her child on Friday, then finds that she has not got the job on that day but has still had to pay for care. She is then expected to turn up on Saturday and cannot afford the care for the child or to go to work. She is therefore penalised the following week. That cannot be what the noble Lord thinks that we should be cautious about.

I absolutely recognise that in a time of austerity—a time when the GDP is at long last rising and we want the utmost flexibility in business—we should not generally be putting curbs on business. However, speaking as a woman, we have to look at this. As a mother and grandmother who had to play my job as a barrister, and then as a judge, against the care arrangements when the nanny did not come in or the au pair was sick, I just said, “What do I do? How do I get to court?”. I was very lucky—I was very privileged—but these women are not. To suggest that we should keep the flexibility at their expense is something that I feel very concerned about. I am speaking rather passionately about this because of what the noble Lord, Lord Stoneham, said.

For goodness’ sake, the CBI, which cares about improving the GDP and having flexibility in business, supports some form of compensation. That is very significant support for what, to me, is a modest amendment. I hope that the House agrees.

[Lord Deben (Con)]

My Lords, I must confess that I find myself in a very difficult position. Your Lordships will know that I usually have views on things and people will know pretty clearly which side I am on. I find this one of the most difficult things to come to terms with because, for example, having some experience of employment in France I am perfectly clear that the unemployment rates there are very strongly affected by the stupidity of French employment laws. We in this country have had a much more open way of dealing with employment and, although we may think that zero-hours employment is not the ideal form of employment, it has certainly provided people who would otherwise not have a job with one.

As an employer who does not use this employment in any circumstance, I can honestly say that that is because I am privileged to run businesses which have been able to hold their head well above water during this depressing time. Businesses which have not been able to do that would not have been employing anybody if they could not have managed their way through recession in the way that they have done, through the use of employment practices of this kind. My concern is that this House should be very careful about making decisions that replace a form of employment with these disadvantages with no employment at all. I am sorry, but that is the issue. We are, I think, in danger if we say to ourselves, “This is what we would like to see, and we don’t see why we shouldn’t see it, and therefore we must see it”. I have a problem with that.

On the other hand, I accept very strongly that there is a difficulty for the single parent who has to make all sorts of arrangements in advance if they are to do a job at all. This Government have been absolutely right in trying to find ways in which we could encourage such women back to work. They do that not only because it contributes to society but because it also contributes to the women themselves. There is nothing as depressing as trying to live on a very small income and not being able to get out of that very closed-in situation. Those of us who have been lucky enough to bring up children in relative comfort and with two parents know how important it is for one or other of you—usually your wife—to hand the child to the other and say, “Look after it, I just have to have a moment”. That is the nature of bringing up children, and I have every sympathy with that.

I wonder, though, whether we should be careful and mindful of what the amendment says and whether the Minister will think on this: we do not want to do something that replaces less than good employment with no employment at all. The issue that the noble Baroness raised is very important. I am not sure that the amendment is right, but it is not an issue which we can just leave and let it go on. We really do have to see whether we can find proper evidence for a way of doing this that is not going to have the downside that I suggested. Is it possible for the Minister to give us some suggestions as to what she might do to meet the gravamen of the case in a way that does not have the downside that my noble friend Lord Stoneham has put forward? Is there a way in which we could get better evidence and find a more precise way of helping people, particularly the women concerned?

I think that it is very difficult for young people. But, in the end, young people are normally resilient enough to overcome those difficulties and I am not sure that I would risk anything to remove that. However, there is a specific case here for a specific group of people. I wonder whether the Minister can find a way through that, because otherwise I, along with my noble friend Lord Stoneham, think that the balance is just too dangerous for us to step over. But I would still like us to do better than that. Perhaps the Minister will find a way of helping me, for a rare time, find a clear answer to what seems a very difficult problem.

[Lord Butler of Brockwell (CB)]

Does the noble Lord recognise that all that this amendment does is force the Government to make regulations? In making those regulations, they can find a way of doing precisely what he is asking the Minister to do—to meet this problem in those areas where it needs to be met without damaging the principle of zero-hours contracts.

[Lord Deben]

I think that I am being tempted to answer in an uncharacteristically charming way. The people who are going to make these decisions are, if I may say so to an old friend and civil servant of mine, civil servants. I want this House to be a little bit careful about that, because very few civil servants have ever run any business in their life. It is one of our biggest problems that we have a system in which business is not understood by those who make most of the decisions. I want to know much more about what this regulation would be. If we agree to an open-ended provision that regulations shall be made, I am not sure that I would be happy to trust such regulations without a closer understanding of what they would be.

[Lord Cunningham of Felling (Lab)]

My Lords, I support the intervention of the noble Lord, Lord Butler, who seems to have got to the nub of this issue: the amendment is not about abolishing anything; it is about abolishing exploitation at the lower end of this employment policy. I could not disagree more with what the noble Lord, Lord Stoneham, said, which seemed to be a hagiography of the system. He seemed not to recognise that vulnerable people are regularly and deliberately exploited by it. I believe that the amendment in the name of my noble friend Lady Hollis is aimed at correcting that exploitation and nothing more. It is not about abolishing the system, as the noble Lord, Lord Stoneham, seemed to imply—I apologise if I have misinterpreted his comments. The noble Lord, Lord Butler, has got this absolutely right. That is why I urge the House to support my noble friend’s amendment.

Small Business, Enterprise and Employment Bill

Lord Deben Excerpts

Tuesday 3rd March 2015 Lords Chamber

As I have tried to explain, the opportunity for flexibility is not given, because the secondary legislation process does not provide it. Real flexibility would be to determine now which regulators go into the Bill and which do not. That is why the amendment would be important in making sure that there is clarity. I hope the Minister will accept that there is at least a case for looking at this issue again and, perhaps, coming back to it at Third Reading. I beg to move.

[Lord Deben (Con)]

I do not find the second half of the amendment compelling, but the first half is very important indeed. The EHRC has a very special role in society and it is looked at very carefully by people outside. The Government have to be super-careful: we know perfectly well that this will not, of course, interfere with the EHRC. This is not, in any way, some sinister operation, but there are people out there who will find sinister operations in anything, particularly when one is dealing with something as delicate as the issues with which the EHRC is concerned. The trouble is that the mischievous people come from both ends of the spectrum: one end wants the EHRC to be more dominant and expansive in its role and the other end wants to have as little to do with it as possible. It is, therefore, important that the wording is right and I hope that my noble friend will have been able to consider this, both in relation to this Bill and on the other occasion that this issue has been raised. I hope she understands that this is not because either side really thinks that there is something here that is wicked or hidden and being covered up. It is simply that there is a very blanket view from outside and it is quite hard to see why it is so difficult to exclude the EHRC. I very much hope that my noble friend will be able to help on that part, at least. The other part of the amendment is probably otiose: I shall not argue with it but I would not want to support it. However, the EHRC is particular, special and has a real reputation in the rest of the world that we do not want to see undermined.

[The Earl of Lindsay (Con)]

My Lords, I also have a problem with a large part of the amendment. I disagree with the argument of the noble Lord, Lord Stevenson, that putting some departments and regulators in the Bill would make it more flexible than using secondary legislation. The Bill provides a requirement for that secondary legislation to be debated by Parliament. My other concern is the very wide exemption that the amendment suggests for a large number of regulators that fall under the six departments cited. This would undermine and threaten a policy that has been developed specifically to support small businesses and would send an unhelpful message. The policy is simply aimed at improving the appeals and complaints processes of a regulator when dealing with small businesses.

We should not forget that driving greater efficiency, accountability and transparency into the interaction between regulators and those they regulate has to make sense, as does having a simpler, more effective, more transparent, less costly and better understood series of processes by which small businesses are able to challenge regulators’ decisions and behaviour. Ensuring that regulators have appeals and complaints processes that work well and are fit for purpose, that rectify wrongs with minimal delay and are sensitive to small businesses—and micro-businesses in particular—must be good news for the economy as well as for the objectives that regulators are seeking to deliver. I would be very uneasy at the thought of the Bill exempting the number of departments and the very large number of regulators that the amendment proposes. I agree about the EHRC, but I understand that the Government will use secondary legislation to exempt it from this section.