Queen’s Speech

Lord Forsyth of Drumlean Excerpts

Thursday 5th June 2014 Lords Chamber

[Baroness Noakes (Con)]

My Lords, four years ago, the Government inherited an economy on its knees. We had emerged from the most severe recession in post-war history. We had a big structural deficit. Government debt was more than 60% of GDP and rising. The previous Government had no plans to deal with this. They left an uncompetitive economy and tax system with a corporation tax rate of 28% and a top personal rate of 50%. It has been a long haul over the past four years to restore the economy to something that resembles health. The job is far from over, but there is a lot to rejoice about. The economy really is growing again—and at the fastest rate in the developed world. Unemployment is falling rapidly and real disposable incomes are starting to rise again. I am sure that the Benches opposite will join me in rejoicing that manufacturing industry, which suffered so much under the previous Government, is now firmly on an upward trajectory. My right honourable friend the Chancellor was wise to reduce the deficit largely through expenditure reductions rather than taxation, and he was wise to ignore the Keynesian sirens calling for more spending and more borrowing.

On the downside, the deficit remains stubbornly high and it is not a cause of celebration that the debt to GDP ratio will peak at nearly 80%. There is still an absolute necessity to continue to bear down on government spending. The Government have played a difficult hand very well, but there are of course some things that they could have done better. Our energy policy is still a mess. We have the self-inflicted wounds of environmental policies that load costs onto British businesses and on to vulnerable consumers. We need some common sense on how much this country is prepared to pay for green luxuries. I endorse everything that my noble friend Lord MacGregor of Pulham Market said about the potential for shale to transform our economy, but dealing with underground access to shale resources in the Infrastructure Bill is but a small part of what the Government need to do to get this moving. Like my noble friend, I look forward to the government response to the report of the House of Lords Economic Affairs Committee on this.

There is also much work still to do on reducing regulatory burdens. There is only so much that we can do in the UK, so we will have to take the fight to Europe—and the sooner we get into serious negotiations over our membership of the EU and its terms the better.

However, my main topic today is taxation. It was wonderful to hear in the gracious Speech that the Government would continue to cut taxes. My right honourable friend the Chancellor has done much good work already. I will single out two things in particular: the path to the lowest rate of corporation tax in the developed world and the reduction in the top rate of income tax. However, the Government get few points for tax simplification. The Office of Tax Simplification was a great idea and has done excellent work, but its recommendations have not all been heeded, and more than 2,000 pages of complex tax legislation will have been added to our tax code by the end of this Parliament.

The Chancellor has shown his capacity for radical thinking with his excellent pension reforms, announced in this year’s Budget. I look forward to the pensions tax Bill delivering those reforms. What the country now needs is a similar reforming mindset applied to the tax system. I draw noble Lords’ attention to a substantial report on a single income tax, produced two years ago by the 2020 Tax Commission, which was sponsored by the TaxPayers’ Alliance and the Institute of Directors. It echoes the conclusions of work done by my noble friend Lord Forsyth of Drumlean’s Tax Reform Commission over eight years ago. The report recommended that most taxes should be abolished and replaced with a new single tax on income. This major simplification would replace the existing income tax, national insurance, corporation tax and various capital taxes including inheritance tax. For good measure, it would get rid of the detested air passenger duty.

The commission recommended a single 30% tax rate on income plus a total restraint on taxes as a percentage of national income of around one-third. The essential argument for a low-tax regime is that high taxes act as a drag on the potential of the economy. The 2020 Tax Commission estimates that its proposals would add over 9% to GDP over 15 years. Importantly, the annual growth rate would permanently be increased by around 0.4%. These potential prizes are too great to ignore.

The Tax Commission’s analysis included dynamic modelling carried out for it by the Centre for Economics and Business Research. This is the key. Many of us were delighted that the Chancellor used dynamic modelling to underpin the reductions in corporation tax last year and the recent cut in fuel duty—so far, so good. What we really need the Treasury to do is move towards using dynamic modelling as a way of life. It is good to use dynamic modelling for specific taxes but the Treasury should be using it to understand how to drive the tax system to support the whole economy. Traditional modelling methods will inevitably produce incremental rather than radical approaches to policy. If the analysis of the 2020 Tax Commission of a single low rate of tax is even half-true, the Treasury simply has to embrace it.

Of course, analysing the impact of a radical tax change is one thing and implementing it is another. It is not easy in an advanced economy such as ours to re-engineer the tax system in a short period of time. There have to be transitions to avoid destabilising the economy and harming individuals. There is the underlying paradox that if you take a long time over transition and overprotect the status quo, you will not see the benefits of higher growth, which is the aim. So there is a case for boldness.

I can see why the Government might shy away from wholesale restructuring, as proposed by the 2020 Tax Commission. It does seem pretty scary. But I do not understand why the Government are not pressing ahead with one key element of the tax commission changes: namely, merging national insurance with income tax. This has a growing body of support. The Office of Tax Simplification proposed it in its review of small business taxation; the Institute for Fiscal Studies supports it; and surveys of businesses show strong support.

Informed commentators know that national insurance is a tax in all but name, but the one thing that has managed to keep it alive is that it is the ultimate stealth tax. Gordon Brown knew that when he raised the extra 1%, allegedly for the NHS—and it seems that Mr Miliband is thinking about trying the same wheeze if he gets a shot at running the country. I find it extraordinary that the Exchequer Secretary has used the Beveridge notion of the contributing principle as the rationale for keeping them separate. Expecting citizens to contribute in return for qualifying for benefits is fine, but you do not need the fiction of a separate national insurance fund to achieve that. The time has come to be honest about national insurance. No one pretends that merging the two systems is a walk in the park. There are many legal and administrative hurdles to overcome. But the prize is great if we want a simpler tax system.

[Lord Forsyth of Drumlean (Con)]

What would my noble friend do about the problem of pension income, which is not subject to national insurance?

[Baroness Noakes]

I was about to say that the TaxPayers’ Alliance produced a very thoughtful report, which showed how a transition could be made within five years and could also protect the expectations of pensioners at the same time. There is a way of doing it. All I would say to my noble friend and to noble Lords generally is that it can be done—it just needs a Government with the will to do it.

High Speed Rail (London–West Midlands) Bill

Lord Forsyth of Drumlean Excerpts

Thursday 8th May 2014 Lords Chamber

[Lord Foulkes of Cumnock (Lab)]

My Lords, I also wish to take part in a debate on this. The Clerk of the Parliaments very kindly confirmed to me in an e-mail that this is a debatable Motion and therefore, we can discuss it. We are not discussing today the merits or demerits of HS2, of which I am in favour, as it happens. But this is a procedural Motion. When I saw that the noble Baroness, Lady Kramer, would be moving the Motion I wondered why. That is no disrespect to the noble Baroness who is a very good Minister, but surely this is a procedural Motion which should be dealt with if not by the Leader of the House then certainly by the Chief Whip so that we can have a proper explanation of its implications.

I take part in the Lord Speaker’s outreach programme. I go to schools and talk about what this House does—that we consider and amend legislation, hold the Government to account and debate the issues of the day. I must say that I am beginning to feel a wee bit of a fraud in terms of holding the Government to account when we have just returned from a four-week Easter Recess. Whatever the Leader of the House said earlier, it was much longer. I have never known a four-week Easter Recess, either when I was in the other House or in this House. Then, from next week, we will be off for another three weeks. That does not seem to me to be the way to do things.

Noble Lords may wonder what this has to do with a carry-over Motion. What I want to point out is that this Motion is typical of what the Government are doing in trying to sideline Parliament. Increasingly, they are treating Parliament as a rubber stamp. Noble Lords will see that the heading for this business is:

“Business expected to be brief”.

The Government want to rush it through, yet it is debatable and we can discuss it. As my noble friend Lord Richard just said, it raises issues of particular significance. All carry-over Motions are significant because legislation can be moved from one Session of Parliament to another. But having looked at previous carry-over Motions, as I understand it, this one is unique and of particular significance because it will carry a Bill over not just from one Session of Parliament to another, but from one Parliament to the next. The noble Lord, Lord Cormack, who understands these issues, is nodding wisely.

I have some questions which I hope the Minister will be able to answer. I warned her yesterday that I would put these questions to her. First, why did she not feel it right to give the House an explanation at the start? Increasingly things are being moved and passed on the nod. Surely, when it is a matter of significance, the Minister should feel obliged to get up and explain why something is being done. It may be that one or two people in the usual channels understand what this is about, but with respect, every Member of the House should be made aware of what is happening.

Secondly, I hope that the Minister will explain why there is such a rush. Why do we need it now? I first saw this when I looked at the future business of the House online at the end of the Easter Recess. Many colleagues have told me that they did not see it until they arrived here on Tuesday, only two days ago. That is not enough time for Members to consider its implications properly. Why the rush? Could this not be held over? Does the Minister really need to push it through today?

The most important question of all is this: what are the implications? It is the question that was put by my noble friend Lord Richard. What kind of precedent will it set? Can this kind of procedure be used for any Bill or just for Bills dealing with infrastructure projects such as HS2?

[Lord Forsyth of Drumlean (Con)]

I am most grateful to the noble Lord. Can he tell me whether he has asked his own Front Bench these questions? Surely his colleagues have agreed to this procedure? Why does he have so little faith in the judgment of his own colleagues?

[Lord Foulkes of Cumnock]

I have great respect for the noble Lord, Lord Forsyth, and I am really grateful to him for that intervention—really grateful—for two reasons. The first is that I spent an hour yesterday with the Leader of the Opposition, the Chief Whip and others discussing this very issue. It was also discussed at our group meeting last night. Our Chief Whip said that he was not consulted about the tabling of this Motion. Others can confirm that he said that at our meeting. So I hope that we will get some answers to these questions.

When we discuss the future of the House of Lords—our group is considering a report on changes to the House—I hope that more and more Members will feel that we have an obligation to question and challenge some of the things that are simply put on the table for us to rubber stamp. We must show that the Executive and the Government are going to be scrutinised by Parliament. I can then go into schools as part of the Lord Speaker’s outreach programme and talk with clarity and honesty, feeling that I am absolutely right when I say that Parliament does have a real job in scrutinising the Executive.

Airports: Heathrow

Lord Forsyth of Drumlean Excerpts

Wednesday 13th February 2013 Lords Chamber

[Earl Attlee]

The noble Lord will know that this is an extremely difficult issue. For every suggestion that the noble Lord could make about what we should do about this problem, I could tell your Lordships what the difficulty is. We have set an extremely difficult exam question for the Airports Commission, and we will just have to wait and see what it advises.

[Lord Forsyth of Drumlean]

My Lords, I declare an interest: it took two and a quarter hours to get from Glasgow to Heathrow on Monday, most of that time being spent on the tarmac at either airport. How long are we going to continue with the disgrace that is Heathrow? Is it not obvious for a Government with no money that if there is a proposal to create a privately funded third runway—up and running and providing jobs—and we want growth, then we should get on with it?

[Earl Attlee]

My Lords, I understand noble Lords’ passion about the problem with Heathrow, but we must also recognise that there are over 200,000 people around Heathrow adversely affected by the noise of airport operations.

Airports: Heathrow

Lord Forsyth of Drumlean Excerpts

Wednesday 23rd January 2013 Lords Chamber

Tabled by

[Lord Forsyth of Drumlean]

To ask Her Majesty’s Government whether they will hold an inquiry into the operations of London Heathrow airport following the recent severe disruption.

[Baroness Browning]

My Lords, on behalf of my noble friend Lord Forsyth, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

Scrap Metal Dealers Bill

Lord Forsyth of Drumlean Excerpts

Friday 18th January 2013 Lords Chamber

[Lord Berkeley]

My Lords, I support the comments of my noble friend Lord Faulkner. I find it quite extraordinary, with all the work that has gone on to get this Bill through, and all the damage, cost and disruption to railways, sculptures, communications and churches that we have seen, that here we have the coalition supporting an amendment that will dump the same problem on the next Government in five years’ time. I hope they will reflect on this, because whoever is in government then—and I am sure it will not be the present coalition—will be blamed. It is really totally unnecessary to have this sunset clause. I hope that the Minister, on reflection, will withdraw this amendment so that the legislation can go through as quickly as possible and we can get some protection from these thieves through a system that will record transactions and enable the police to charge people, thereby reducing the thefts and all the damage they are causing.

[Lord Forsyth of Drumlean]

My Lords, I declare an interest, as my wife’s family has suffered from metal thieves taking memorial plaques from the side of a church in Dewsbury. I feel strongly about this: I do not think there are many people in this House who feel as strongly as I do about deregulation, but it seems quite extraordinary that we have Bills coming before this House—mainly originating from European directives—where there is no possibility of having a sunset clause and where the Government are unable to proceed. This looks like a bit of window dressing. We should listen very carefully to the wise words of the noble Lord, Lord Faulkner, about the risk and the delay which will arise.

I hope my noble friend will tell us whether, if this amendment were not passed, the Government would continue to support this Bill with enthusiasm. It seems to be an unnecessary risk and an unnecessary delay to send it back to the House of Commons for further consideration. I understand the long-standing difficulties there are with Private Members’ Bills in the other place. My late colleague, Eric Forth, used to cause considerable irritation by what he regarded as a principled stand on this matter. However, this is a Bill which, as several speakers have said, is urgently needed. I pay tribute to my noble friend Lady Browning for the diligent way in which she has carried us forward. At this very late stage, I am sorry that the Government are proposing to put a spanner in the works, which will delay much needed legislation.

[Lord West of Spithead]

My Lords, I support my noble friend Lord Faulkner and what has just been said by the noble Lord, Lord Forsyth. I declare an interest as I am involved with war memorials around the United Kingdom. Metal theft has meant disaster for those memorials, and it has caused immense damage, sadness and pain to a number of people.

The noble Lord, Lord Cormack, suggests that this amendment is the price that we might have to pay for the Government to agree to this legislation, and that it would speed things up. Surely it will slow things down and surely things would happen much faster if we did not have this amendment.

--- Later in debate ---

[Earl Attlee]

My Lords, I am grateful to all noble Lords who contributed to this important debate. First, the noble Lord, Lord Rosser, talked about the need to use Private Members’ Bills. The noble Lord knows perfectly well how difficult it is to secure time for a government Bill. My noble friend Lady Browning’s comments reminded me of my Road Traffic (Enforcement Powers) Bill that I ran as a Private Member’s Bill in your Lordships’ House on behalf of the Labour Government and the noble Lord, Lord Whitty. I experienced similar problems trying to get the Bill through the House of Commons because of the sadly deceased Mr Eric Forth.

There is no benefit to be gained from inadequate reform of the scrap metal industry. The clause would allow for the system of regulation to be fully reviewed and assessed and for the government of the day to re-legislate in five years. The Government are not making these amendments because we do not have faith in the Bill delivering what is required. We believe that the Bill will be effective and that the review will bear testament to that.

How the House of Commons decides to handle a Bill is clearly a matter for that House. I agree that the House of Commons has problems in the way that it handles Private Members’ legislation—in a way that we do not. I do not accept that this Bill would be at an unacceptable risk if we sent it back to the other place amended. The Government are fulfilling their commitment, made in the House of Commons. We expect individual Members of the House of Commons to fulfil their commitments.

[Lord Forsyth of Drumlean]

My Lords, if the Bill is amended as my noble friend proposes and it then goes back to the other place and there are difficulties, will the Government take it on and ensure that it reaches the statute book?

[Earl Attlee]

My Lords, I am confident that individual Members of another place will undertake to meet their commitments. Perhaps I may carry on.

We should not risk the House of Commons being reluctant in the future to accept government commitments in the circumstances of private legislation. My noble friend Lady Browning talked about honour and the word of a politician. How right she is to do so. We all know in our hearts what the right thing to do is. The noble Baroness, Lady Farrington, is correct in what she says—

--- Later in debate ---

[Earl Attlee]

The noble Baroness is, of course, absolutely and precisely correct, but my advice to the Committee is to accept this amendment.

I was asked whether there are any plans for the Government to include the contents of this Private Member’s Bill in a government Bill. The current Government do not have any such plans and it would be for the Government of the day to decide on the most suitable legislative vehicle to relegislate in this area. I would also point out in response to the noble Lord, Lord Rosser, when he identified problems with renewing legislation, that as a defence spokesman he will know that the Armed Forces Act has to be renewed by order every year and by Act of Parliament every five years, but that does not mean that members of the Armed Forces do not have confidence in the legal arrangements of the Armed Forces.

I was asked the broad question of whether the Bill could not simply be re-enacted after five years. The outcome of the review could well recommend that the Bill meets its requirements and should be continued after five years. The Government of the day would have to make the case back before Parliament; that could be one approach that is taken. The principle of parliamentary sovereignty means that any future Parliament can legislate as it sees fit at any given time, even if this means acting inconsistently with the previous parliamentary intention.

Noble Lords will be aware that provisions to extend the life of a Bill are relatively easy to make, either by a Bill with a tightly worded Long Title or through an appropriate clause in a rather wider Bill. That would meet the need and it is not a difficult thing to do, as experienced noble Lords well know. In answer to my noble friend Lord Skelmersdale, I have already explained how the review system will work. Once the Bill becomes law, the fact that it was a Private Member’s Bill will make no difference. My noble friend Lord Forsyth asked whether, if an amendment is not agreed, a Bill can go to Royal Assent. Yes, of course it can, as all noble Lords well understand. If we do not agree this amendment, the Bill will go on to Royal Assent and become law. That is simple fact. However, future government assurances about Private Members’ Bills will carry a lot less weight, and I am not convinced that that is in anyone’s interests. Therefore, I beg to move.

[Lord Forsyth of Drumlean]

Before my noble friend moves the amendment, could he explain the principle that a Bill will carry less weight when it has been passed by both Houses?

[Earl Attlee]

My Lords, perhaps my words were not clear. I did not mean that the Bill would carry less weight, but that a government assurance made at the Dispatch Box in respect of private legislation would carry less weight. If future Ministers experience the same problems in the House of Commons, they will not be able to get out of the problem so easily.

[Lord Forsyth of Drumlean]

I apologise for interrupting my noble friend once again. My noble friend Lady Browning, who is a lady of considerable integrity, has done what she said she would, the Government have done what they said they would do, and their assurances have been met. However, neither the Government nor the movers of a Bill can anticipate and pre-empt the decision of a House of Parliament.

[Earl Attlee]

My Lords, I have already agreed exactly that point with the noble Baroness, Lady Farrington. The Committee can decide this amendment as it pleases, but my strong advice to the Committee is to agree to it.

Airports: Heathrow

Lord Forsyth of Drumlean Excerpts

Tuesday 15th November 2011 Lords Chamber

[Earl Attlee]

My Lords, I can definitely feel the heat from your Lordships. The sale of these slots to BA will increase the share of BA’s parent, IAG, of all Heathrow airport slots from 44 per cent to around 53 per cent, although IAG points out that even after the acquisition of BMI’s slots, its percentage of Heathrow slots would still be smaller than Lufthansa’s 60 per cent slot holding at Frankfurt.

[Lord Forsyth of Drumlean]

Will my noble friend give an undertaking to look at this issue more carefully? The noble Lord is perfectly correct that this is an issue not just for Northern Ireland but for Scotland, where the flights from Glasgow and Edinburgh have been greatly reduced, the fares are very substantial and it is undoubtedly the case that British Airways would use these slots for more lucrative transatlantic flights. It is no good looking at London as a whole. The point is that Heathrow is the hub from which it is possible to do business internationally.

Airports: Heathrow

Lord Forsyth of Drumlean Excerpts

Monday 31st January 2011 Lords Chamber

[Earl Attlee]

My Lords, the reports will come in due course. However, if there are any lessons to be taken on board immediately, we will listen and take action on those points.

[Lord Forsyth of Drumlean]

My Lords, is it not rather ridiculous to try to turn this into an argument about public versus private? The motorway between Glasgow and Edinburgh was closed for two days, yet as far as I know has not been privatised. Is not the real issue whether we will have winters like this on a regular basis, and whether we need to invest in our infrastructure—our roads, our airports and the rest—to prevent our country from looking ridiculous in the eyes of the rest of the world?

[Earl Attlee]

My noble friend is absolutely right. That is why my right honourable friend the Secretary of State has asked Sir John Beddington to give us some scientific data on how likely it is that we will experience such severe winters in future.