Autumn Statement

Debate between Lord Empey and Lord Sassoon

Wednesday 5th December 2012 Lords Chamber

[Lord Sassoon]

My Lords, I am very grateful to my noble friend and agree with every word that he uttered.

[Lord Empey]

My Lords, I thank the Minister for his personal courtesies to me since I have been a Member of your Lordships’ House.

I welcome the increased allowances for small businesses and the reductions in corporation tax. Will the further reductions in corporation tax dissuade the Minister’s right honourable friend the Prime Minister from considering devolving corporation tax-setting powers to the Northern Ireland Assembly? Secondly, will he consider once more a reduction of VAT to encourage the retrofitting of buildings so that they can not only be improved from an energy-efficiency point of view but benefit from a tax holiday on VAT for a small period of time, which would have limited dead-weight potential but would stimulate the construction sector? Will he give further consideration to those two points?

[Lord Sassoon]

My Lords, the question of corporation tax in Northern Ireland continues to be considered. The key thing is that we are making the United Kingdom as a whole a more competitive place and in corporate tax terms the most competitive place to do business among our major competitors. Of course, the position in Northern Ireland will continue to be debated.

As far as the reduction in VAT is concerned, this is a case that is made regularly. We believe that what we have announced today—the two-year increase in the investment allowance—is a better way of targeting the limited resources that we have, in addition to what we have done on the basic rate of corporation tax.

Royal Bank of Scotland: LIBOR

Debate between Lord Empey and Lord Sassoon

Wednesday 4th July 2012 Lords Chamber

[Lord Empey]

To ask Her Majesty’s Government whether and when they were made aware by the Royal Bank of Scotland that the bank had dismissed employees for inappropriate behaviour in relation to setting LIBOR rates.

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

My Lords, the Government are aware that several banks are being investigated by the Financial Services Authority in relation to the setting of the LIBOR rate. While the investigation is going on, it would be inappropriate to comment on any specifics relating to the Royal Bank of Scotland. My right honourable friends the Prime Minister and the Chancellor of the Exchequer announced the Government’s response to the LIBOR issue on Monday.

[Lord Empey]

I thank the Minister for his response. Before I ask my principal supplementary question, I ask: will the Minister comment on the disastrous handling by RBS Group of the customers of Ulster Bank, who are still suffering over two weeks after the crisis began?

With regard to my main Question, will the Minister tell us what instructions he has given to UK Financial Investments Ltd, which looks after taxpayers’ interests with regard to shares held by the Government in various banks? Can he assure the House that the reporting mechanisms back to the Treasury as principal shareholder, particularly in RBS, will be such as to enable the Government to pick up evidence of any malpractice or inappropriate behaviour at an early stage?

[Lord Sassoon]

My Lords, on the RBS/NatWest/Ulster Bank IT failure, RBS has assured customers that nobody will be left out of pocket as a result of the problems. There is a Question down for tomorrow—number 4—from the noble Lord, Lord McAvoy, that touches on Ulster Bank, so I am sure we will return to that tomorrow.

On the instructions to RBS and the monitoring of them, the Government manage their shareholdings in RBS at arm’s length through UK Financial Investments and the governance arrangements are set out in the framework document and the investment mandate between UKFI and the Treasury. It is all there transparently on the website. I believe that those arrangements continue to be appropriate for the arm’s-length management. As it happens, UKFI published its annual report only this week. It sets out a very full account of the issues that it has been engaged in with RBS and with Lloyds Bank. I believe that all the appropriate channels are there and that there is a high degree of transparency. I can reassure the noble Lord on that.

FSA Investigation into LIBOR

Debate between Lord Empey and Lord Sassoon

Thursday 28th June 2012 Lords Chamber

[Lord Sassoon]

My Lords, on the noble Lord’s first point, I am sure that the board of the bank in question will listen to his views on bonus matters. That is principally a matter for the board of Barclays Bank to consider.

The noble Lord, Lord McAvoy, has said that we should not get too far into prior history here. There is a risk that I will get drawn into these matters. It was Mr Gordon Brown and Mr Ed Balls who espoused very explicitly the virtues of light-touch regulation, and that was the environment in which these traders operated.

[Lord Empey]

My Lords, LIBOR rates could not have been interfered with by one institution alone. There would have to be accomplices. I therefore presume that that is one of the directions in which the investigation will go.

Is the time ever going to come again in this country when someone takes professional responsibility for what is going on, leaving aside the criminal activities that will be pursued by the regulatory authorities? Is no one going to take professional responsibility and suffer a professional sanction if they are found in default?

Finally, sadly, we as taxpayers own substantial numbers of banks. Can the Minister assure the House that there is no such activity in institutions that are owned or partly owned by the taxpayer?

[Lord Sassoon]

My Lords, on the first point made by the noble Lord, Lord Empey, as I have said, other banks are being looked at by the relevant supervisory authorities here and in other countries. All that is ongoing. I very much endorse what the noble Lord has to say about the profession taking responsibility. If the banking industry wants to be thought of as a profession, clearly it should think about how it re-establishes professional standards. I speak as a chairman of the ifs School of Finance, the former Institute of Bankers, so I feel very strongly about that and believe that the profession needs to think about it very clearly.

I am not aware of public authorities being involved. I can be pretty clear that no public body is involved in any way in the LIBOR-setting regime and therefore in what we are discussing this afternoon.

Eurozone

Debate between Lord Empey and Lord Sassoon

Thursday 17th May 2012 Lords Chamber

[Lord Empey]

To ask Her Majesty’s Government whether they intend to make any further financial contributions to the eurozone bailout.

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

My Lords, first, we should be clear that there are no requests on the table for further financial assistance. The Government have made clear their view that the responsibility for sorting out the problems of the euro area rests primarily with euro area Governments. The UK will not be a member of the permanent European stability mechanism, which will replace the European financial stability mechanism established under the previous Government, for which the UK holds a contingent liability.

[Lord Empey]

The Minister will be aware that there is considerable confusion in the public’s mind about what our commitments to the eurozone actually are. Although we may not have those commitments through formal European agreements, we are putting more money into the IMF and have done a bilateral deal with Ireland. Can the Minister clarify, in language that people outside can understand, exactly what our liabilities to the eurozone and its member countries are in the event of further financial turbulence?

Economy: Private Capital Investment

Debate between Lord Empey and Lord Sassoon

Tuesday 20th December 2011 Lords Chamber

[Lord Empey]

To ask Her Majesty’s Government what additional fiscal measures they will take to encourage private capital to invest in manufacturing or tradable services in the United Kingdom.

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

My Lords, the Autumn Statement announced several measures which encourage private capital investment: an above-the-line research and development tax credit from 2013, ensuring that the relief continues to attract large-scale investment in innovation; 100 per cent capital allowances for six enterprise zones; and a new seed enterprise investment scheme in 2012 to help early-stage companies. The draft Finance Bill also set out further steps in wider corporation tax reform.

[Lord Empey]

I am sure that the Minister will agree that the best way of achieving long-term financial and strategic security for the United Kingdom is to strengthen our international trading position. A significant increase in our manufacturing capability is one of the best ways of achieving this. Can the Minister tell the House whether the Government have any plans to offer increased fiscal incentives to encourage businesses, especially SMEs, to invest in R&D spending? Can he further advise whether any additional fiscal incentives are being considered that will create sufficient confidence in the private sector to boost investment in manufacturing?

[Lord Sassoon]

My Lords, the first thing to remind the House is that the changes already made in corporation tax and the capital allowance regime will in total, in 2015, contribute an extra £700 million in reduced taxes to the manufacturing sector. For example, £1 billion of R&D relief was claimed in 2009-10, including by 7,400 SMEs. So this Government are indeed taking considerable targeted action to support our manufacturers, including SMEs, whether by way of encouraging R&D or through other aspects of the corporation tax regime.

Autumn Budget Forecast

Debate between Lord Empey and Lord Sassoon

Tuesday 29th November 2011 Lords Chamber

[Lord Empey]

My Lords, I welcome many of the comments made in the Budget Statement but there is one that I want to ask the Minister to clarify. He announced that he was asking the independent pay review bodies to consider how public sector pay can be made more responsive to local labour markets. Can he explain what that means? How are the regions geographically defined? Further, if there were to be a reduction in public sector pay in some of the regions, would that lead on inevitably to reductions in benefits in those areas as well?

[Lord Sassoon]

My Lords, I am grateful to the noble Lord, Lord Empey, for drawing attention to this critical issue because it is potentially an important structural change in the economy. We want to make sure that in the labour markets in all the regions of the country there is no unfair competition or crowding out in any way of the ability of the private sector to hire people. Private sector pay has to be reflective of local market conditions where until now public sector pay has been set on a national basis. We have said that we will be asking the independent pay review bodies to consider how pay can be made more responsive to local labour market conditions, and they will report to us by July 2012.