Autumn Statement

Debate between Lord Deighton and Lord Hollick

Wednesday 3rd December 2014 Lords Chamber

[Lord Deighton]

I thank my noble friend for that question. Obviously she was in my mind when we developed that measure. It will be part of the Finance Bill next year.

[Lord Hollick (Lab)]

Can the Minister shed some light on the increase in infrastructure spend over the forecast period? In his Statement today the Chancellor said:

“Improving productivity for all business demands a major investment in our nation’s infrastructure”.

Over the past few weeks we have been showered with press releases setting out various infrastructure projects; I stopped counting when we got to around £15 billion. I was therefore a little surprised by table 4.3, the summary of the effect of government decisions, which shows that over the forecast period there is only a £600 million increase in capital. Can the Minister tell us what the actual increase in infrastructure spend is and how it is to be financed if it is only £600 million over the next four years?

[Lord Deighton]

As I explained to the noble Lord earlier, we have made a very detailed analysis of infrastructure spend, which is running on average at £47 billion per year. The majority of that, more than 60%, is financed by the private sector, which of course is a great sign of the success of this Government. Every scheme which has been announced has a clear funding plan attached to it. The real transformation that has taken place with this Government is that instead of having a plan for roads one year at a time—if there is a bit more money you can tell the Highways Agency to build a road; if there is no money, you tell it to stop, which results in a very inefficient road-building programme—we have given it a proper organisation, a proper strategy and a proper financing plan over the next six years.

Autumn Statement

Debate between Lord Deighton and Lord Hollick

Thursday 5th December 2013 Lords Chamber

[Lord Deighton]

On universal credit, I can tell your Lordships from a personal point of view that the individual whom we have brought in to manage that programme, Howard Shiplee, worked on the Olympic Games and delivering the Olympic park, so we have got the right people focused on getting the delivery of universal credit absolutely right. Our current planning assumption is that universal credit will be available in each part of Great Britain during 2016, with new claims to the benefits that it replaces having been closed down and the majority of the remaining caseload moving to universal credit in 2017. I do not have the particular numbers on how much it has cost, but I will work with DWP and provide the noble Lord with a response to that question. On capital gains tax for non-residents, we are introducing it in the normal way. The efficacy with which we have approached closing down these loopholes puts the previous Government to shame.

[Lord Hollick (Lab)]

The Statement recognises that we have a cyclical recovery and that in order to turn that into a sustainable, long-term recovery, we need investment—we have had a number of discussions on that—and an improvement in productivity. The Statement references a report, presumably prepared by the Treasury, showing that the policy pursued by this Government and their predecessor to reduce corporation tax has increased investment and raised productivity. In the light of this, is it not strange that the Government have so comprehensively rejected the recommendation of a report prepared by the Economic Affairs Committee of this House and enthusiastically endorsed by all sides in a recent debate that we take measures to ensure that all companies pay corporation tax, particularly those international companies which currently do not, and that UK companies using complex and—frankly—dodgy procedures not to pay tax here should all be required to pay tax? As a result of that, the tax rate to both large and small companies could be substantially reduced, to the benefit of productivity, and the Treasury would be no worse off.

[Lord Deighton]

I thank the noble Lord for his analysis of our need for investment. We also talked about productivity. The review that the noble Lord referred to that the Treasury did on corporation tax is what we describe as dynamic modelling, which means understanding the long-term effects of the tax cuts and demonstrating that the increase in income that flows afterwards pays for the majority of them. The way that we are dealing with making sure that overseas companies pay their fair share is through the OECD and taking leadership internationally. I think that is the only way that you can do it. You have to be able to deal with these international companies on a global basis, otherwise it is impossible to close them down, so that is probably the right way to approach it. The general trend of getting people to pay less tax and making sure that everybody pays that tax is the right strategy, and one that is working well for this country.

Infrastructure: Expenditure

Debate between Lord Deighton and Lord Hollick

Monday 25th March 2013 Lords Chamber

[Lord Hollick]

To ask Her Majesty’s Government how much has been spent on infrastructure projects in the current financial year, and how that figure compares with that in the previous financial year.

[The Commercial Secretary to the Treasury (Lord Deighton)]

My Lords, we are spending more on infrastructure projects this year. Capital spending by the departments responsible for economic infrastructure—DfT, DECC and Defra—is increasing. The transport budget, for example, rises from £7.7 billion last year to £8 billion this year, then £8.7 billion next year and £8.9 billion in 2014-15, which is more than at any point under the last Government. This has been possible because the Government increased infrastructure spending by £10 billion over the past two Autumn Statements, increases which the Budget committed to making permanent, with a further £3 billion a year from 2015-16.

[Lord Hollick]

I thank the Minister for that Answer. However, the Office for Budget Responsibility reported a rather different situation last week, when it announced that public sector net investment would fall by 34%, from £38.7 billion in 2010-11 to an estimated £25.5 billion in the current year, 2012-13. The OBR also forecast that, taking into account all the measures so far announced, including those announced in the Budget last week, there would be zero growth in infrastructure spend between now and 2017-18. Will the Minister please explain why these measures have failed, and continue to fail, to boost overall infrastructure investment, and which additional measures he plans to introduce to improve the dire forecast for the next five years?

[Lord Deighton]

My Lords, first, it is necessary to clear up the numbers. There is a significant difference between public investment numbers and investment in infrastructure. Public investment includes huge investments in health and in defence, so there is a significant difference there. Also, if you look at the national infrastructure plan, you see that approximately 80% of the investment that we expect over the next 15 years in fact comes from the private markets and not from public capital expenditure.