EU Law

Lord Forsyth of Drumlean Excerpts

Tuesday 28th January 2025 Lords Chamber

[Baroness Gustafsson (Lab)]

I thank the noble Lord for that question. That is something that we are willing to discuss.

[Lord Forsyth of Drumlean (Con)]

My Lords, given the welcome statement by the Chancellor on financial regulation, and given that the European regulations, which were subject to some democratic control before, are now being placed in the hands of the regulators, what plans do the Government have to give direction to the regulators as to how they might be made accountable for the implementation of these as part of the Government’s growth agenda?

[Baroness Gustafsson (Lab)]

I thank the noble Lord for the question. The Government are committed to driving economic growth and working hand in hand with the regulators to make sure that that growth can be achieved in a sustainable way that is fair to all markets and ultimately beneficiary to consumers. The Government are committed to maintaining the independence of those regulators, but we work with them to provide an overall strategic steer on the directions and priorities they should be working towards so that they can work hand in hand with us and our priorities around growth.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Forsyth of Drumlean Excerpts

Committee stage
Tuesday 21st January 2025 Grand Committee

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a great pleasure to follow the noble and learned Lord, Lord Hope of Craighead. The example that he just gave us illustrates, down at the level of fine detail, the broader point I want to make about charitable organisations and non-governmental, not-for-profit organisations.

In thinking about making a contribution to this debate, I looked up contributions around the phrase, “I wouldn’t start from here”, to see some quotations. I found lots of rather repetitive jokes—noble Lords can look them up for themselves—so I shall aim not to be repetitive. As I said at Second Reading, the Green Party believes we should start with a wealth tax so that the people with the broadest shoulders make contributions to society in order that we can do what we need to do: invest far more in our austerity-stricken services and infrastructure and tackle the climate emergency and nature crisis. However, we can combine two things here and focus on charities and non-governmental organisations. We are talking about hospices, for goodness’ sake, which these amendments of which I am broadly in favour, deal with.

I want to cross-reference two Early Day Motions in the other place: EDMs 374 and 380, tabled by my honourable friend Ellie Chowns. They look at what a mess the social care sector is in now, with the chronic underfunding and the workforce shortages problems. They also note how much the voluntary sector is already under strain from escalating operating costs and cuts to contract funding.

The elements of these amendments that are worth focusing on are voluntary sector charities and not-for-profit organisations. I have a proposal to put to the Minister; it comes from the charities and NGOs that I have spoken to. They are saying, “Yes, we can imagine a scenario where we could cope with this national insurance rise, but not on 6 April, which is so close, with our budgets all set out and our staffing set in the position it is now”. Would the Government consider, specifically in the case of charities, non-governmental organisations and not-for-profits—particularly those in social care; the Government can draw the lines wherever they like—postponing for a year? This would surely not involve that much money in terms of the Budget, but postponing for a year would give these organisations the chance to reorganise their budgets so that they have a chance to prepare for this situation. That is neither where I would like to end up nor where I would like to start, but it is a constructive suggestion to help these organisations, many of which are in desperate straits.

[Lord Forsyth of Drumlean (Con)]

My Lords, as we have heard, it is rather unusual for a Bill that will have such a devastating impact on our country, businesses, charities and so on to have its Committee stage in Grand Committee. Normally, we would have it on the Floor of the House. It is certainly true that past national insurance Bills have been taken in Grand Committee, but it is distressing that the Government have chosen to push this Grand Committee to consider a very controversial Bill that will affect many groups of people. It should be taken on the Floor of the House.

I hope that this is neither a precedent nor a move that drives us in the direction of the House of Commons, which moved towards the timetabling of Bills, and proper scrutiny of important Bills, on the Floor of the House. We are familiar with the consequences of that: us having endless amendments to legislation that has not been properly scrutinised. If this was about saving time, I do not think it is going to work, because the fact that we cannot have votes in this Committee will mean us spending, perhaps unnecessarily, rather a long time on Report. Of course, the whole point of Committee stage is that it enables a bit of to and fro and discussion under the rules that apply in that respect.

I find myself in an unusual position in the Grand Committee, speaking on a highly controversial Bill, devastating in its consequences. The Minister is keen on telling us about black holes and this creates an enormous black hole in the delivery of public services and for businesses up and down the land. The unusual position in which I find myself is being in complete agreement with the noble Lord, Lord Scriven. I started to make notes to find something that I thought he had got wrong, but I could not say anything until I looked at the amendment, because the flaw in his erudite and proper analysis of the damage that will be done to GPs, social care, pharmacies, hospices and others is the distinction that he makes between the public and private sectors.

Apparently, if one is doing this in the private sector, it is okay to slap on a great tax that means one has to consider dismissing staff and so on. But if it is in the public sector, that is completely unacceptable. This is particularly egregious, although I think, and the noble Lord will correct me if I am wrong, he makes an exception for the provision of care home services in the private sector. I am not sure if that is right. I shall happily give way to him if he thinks I have got it wrong. In other respects, however, it is all about giving—

[Lord Scriven (LD)]

My amendment is clear. It is not just about the public sector. It talks about anyone who is contracted, which could be in the private sector.

[Lord Forsyth of Drumlean (Con)]

Yes, but that that completely removes the private sector providing, for example, social care. A report on social care from the Economic Affairs Committee, which I chaired some time ago, was very much endorsed by the House as a whole—there was unanimous agreement across the House. It made clear what is happening in private care homes, for example. People who are paying their own fees, as opposed to them being paid by the local authority, are being charged up to 40% more to subsidise people who are in those homes as a result of the local authority. Here we have a situation where the burden is placed even more strongly on people providing care out of their own savings and resources.

It seems to me that a distinction is being made between the elements that are providing care. For example, in dentistry, every time I go to the dentist—I see him every six months, when he has me in a position of some vulnerability—he tells me that he is unable to take on NHS patients because if he does so, the amounts he is allowed to charge mean that he is making a loss. That loss occurs because of staff and other costs, which will increase as a result of these measures. That will mean that the problem of getting dental care in the NHS, which is acute at present and even more acute for people with particularly severe orthodontic conditions, will get worse. He tells me, for example, that people can wait until their teenage years before they get treatment, and then they have to show that they have had treatment for the previous few years. If they have not had that, they are no longer eligible. The result is that people do not get treatment at all. Everyone knows that NHS dentistry is in crisis. As the noble Lord, Lord Scriven, pointed out, this will make it even worse.

Then we have the issue of the hospices. The noble and learned Lord, Lord Hope, mentioned the case of Cyrenians and I would be remiss if I did not. My noble friend Lady Goldie asked me to mention the letter that she received from that organisation, and the noble and learned Lord highlighted the fact that this will mean £171,000 extra for a charity—not a big one—which is struggling. When I was Health Minister in Scotland a million years ago, I introduced pound-for-pound funding for hospices, whereby the Government would match the funding raised by the hospices. That was hugely successful but subsequently repealed by the Scottish Parliament when it came into action. Hospices are organisations that we should be supporting. We should not be thinking of new taxes on the people that they have to employ, although of course they benefit from many volunteers.

The whole Bill is deeply misguided and, as the noble Lord pointed out, will have a devastating effect, not just on private providers but on all providers and charities. I remind the noble Lord that had we had his excellent amendment on the Floor of the House, we could have divided on it and sought the opinion of the whole House, but because we are put in here, we are unable to do so. That is a great disservice. Of course, it means that the Liberals—

[Baroness Smith of Newnham (LD)]

And democrats.

[Lord Forsyth of Drumlean (Con)]

Well, I am not so sure about the “democrat”, but they are certainly called Liberal Democrats. They will be able to say, “We raised your concerns”, but they raised our concerns in a way that made it difficult to have the rules of engagement that would enable us to refine those amendments in Committee.

I hope that in considering his amendment, the noble Lord, if he takes it a stage further—I do not anticipate that the Government will accept it—may take account of the concern that it is not just about the public sector but the private sector. Bear in mind that this is just one measure on top of others—the increase in the minimum wage and the employment rights legislation—that will make it much more difficult for people to be flexible in their labour arrangements. All these things together are crushing these important public service organisations.

I support the amendment, but I hope that the noble Lord might think further on the contribution made by those private providers providing services to people who pay from their own pockets.

[Lord Scriven (LD)]

My amendment, in proposed new subsection (1B), says:

“A ‘specified employer’ means … a person providing a care home service”


under the Health and Social Care Act 2008. So that will cover a private care home, not just a public sector care home. Would the noble Lord agree?

[Lord Forsyth of Drumlean (Con)]

I would agree, but it would not provide for the costs of private patients, who are already paying over and above the odds because of the local authorities. I am not criticising the local authorities—in fairness to them, they simply do not have the money. More than three-quarters of councils’ budgets are going on social care, and the costs are going up. This is extending the cost, and therefore it will mean a greater burden on those people paying out of their own pockets.

[Lord Eatwell (Lab)]

When the noble Lord, Lord Forsyth, raised the issue of our meeting in Grand Committee—when the proposal was being discussed—and argued that votes could not be taken, I intervened and said that he was incorrect because I had won a vote in a Grand Committee many years ago. After a little research, I discovered that the noble Lord, Lord Forsyth, was right and I was wrong. The reason is that the Committee in which I won a vote was a Special Public Bill Committee. For those of your Lordships who have not encountered such a thing, a Special Public Bill Committee is exactly the same as a Grand Committee, except you have votes. It is designed to deal with Law Commission Bills. I apologise to the Committee for that error, and especially to the noble Lord, Lord Forsyth.

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[Lord Forsyth of Drumlean (Con)]

The noble Lord was kind enough to write to me and apologise, and we always very much respect the courteous way in which he handles debates in our House.

[Lord Eatwell (Lab)]

That is very kind.

I turn to the amendment. One of the major failings of the UK tax system is its complexity. That complexity is a major source of tax avoidance—that is, the use of legal loopholes, often in ways totally unintended by the policymaker—to avoid tax. The real problem is the large number of exemptions—exemptions which riddle our taxation system and make it so susceptible to tax avoidance.

Increasing exemptions to a particular tax is the wrong way to deal with the perhaps real problems described by the noble Lords, Lord Scriven and Lord Forsyth. The right way is for the Government to target direct subsidy to those services that they wish to have funded. These proposals increase the number of exemptions in the tax system. I can assure the proposers that they will be gamed and will result in tax avoidance, which is totally outwith the intention of the proposers of the amendments. Several other amendments would also add exemptions to the tax system. We should not do it. It makes our tax system worse and more complex and it increases avoidance. The approach embodied in the amendments is a very bad idea.

[Lord Forsyth of Drumlean (Con)]

Before the noble Lord sits down, does not the Bill itself extend extensions, by changing the secondary threshold for class 1 contributions?

[Lord Eatwell (Lab)]

I agree, but adding more exemptions is adding to the pile. What we desperately need is a reform of our tax system that removes exemptions and forces Governments to make policy by deciding which goods and services they are going to subsidise.

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[Baroness Neville-Rolfe (Con)]

My Lords, I thank the noble Lord, Lord Scriven, for tabling these amendments and others who have spoken, particularly my noble friend Lord Randall, who supported the amendments highlighting the damage to smaller businesses. I very much share his view.

This has been an interesting discussion and it has brought out how unjust the proposals in the Budget for national insurance were. The amendment rightly draws attention to the problems created across the health sector, all of which we will discuss again in detail on other groups. “Stark” was the rather good word used by the noble Lord, Lord Scriven. As we heard at Second Reading, there are appalling consequences for those dealing with some of the most tragic services, including hospices and the transport of those with special educational needs. There will also be an immense strain on care homes, GPs, dentists and pharmacies—mostly small operations employing a number of part-time and low-paid staff. That will seriously impact on the health of the NHS.

What is so unfair is that the public sector is being compensated for the extra costs. That is in contrast to those carrying out public good in the private sector, which, incidentally, we know is more productive. For example, I have been amazed by the industry of family-run pharmacies, which helped so much during Covid and are asked to do more and more year by year. They are having to deal with the treble whammy of NICs, the national minimum wage rises—especially for the young—and the prospect of the Deputy Prime Minister Angela Rayner’s proposals for new employment legislation.

As I highlighted at Second Reading, many in the health sector say that they will be forced to reduce services and limit headcount. For example, we heard from the noble Lord, Lord Scriven, about the increased cost of social care faced by the independent care providers—I think he talked about £900 million; I had a figure of £940 million—which simply dwarfs the £600 million support rightly included in the Budget to help the sector. If the Government recognise that this tax is not sustainable for the public sector, why are they unable to apply that same logic to sectors that provide public services? These are not big businesses. They provide a critical service for the people and, if they are unable to do so, that will add to the pressure on the NHS. The noble and learned Lord, Lord Hope, gave a good example of the Cyrenians in Scotland and my noble friend Lord Forsyth rightly mentioned hospices, as I think everybody will do throughout this Committee.

[Lord Forsyth of Drumlean (Con)]

Before my noble friend leaves this figure of £940 million for social care, something like one in seven of the beds in the NHS are occupied by people who are well and who could be discharged. If we are going to add a burden to the social care sector, that £940 million does not take account of the cost to the NHS of those beds being occupied by people who would otherwise be able to be in their own homes, not just saving the taxpayer money but also hugely improving their quality of life. So the £940 million —or the £900 million, as mentioned by the noble Lord, Lord Scriven—is a gross underestimate of the real costs that are being imposed by this policy, is it not?

[Baroness Neville-Rolfe (Con)]

My noble friend makes an excellent point. It is a question of the dynamics. I know, having once been a Treasury Minister, that dynamics always worry it. But the fact of the matter is that, if we can get things done and get people out of hospital quicker, as my noble friend suggests, that would make a real difference.

I feel that the proposals that we are faced with for hard-working businesspeople and for social enterprises are a huge slap in the face. They are being discussed on a day when unemployment is rising and job opportunities are falling. I believe that that reflects the impact of the £23.8 billion hit on employers’ national insurance. It is a veritable jobs tax and the gloom that the Government have admitted for the first six months of their tenure has not helped. That is why my noble friend Lord Forsyth was right to regret that we were debating this not on the Floor of the House but in Grand Committee. I hope that none the less we will attempt to give the Bill proper scrutiny here, because if we do not, that would be a big failing.

In that respect, one of the things that annoys me most is the lack of a proper impact assessment. We have a very inadequate impact note, which was published on 13 November. That gives a run of the yield to the Exchequer year by year but does not break it down into the three categories: the costs of the increase to 15%, the lowering of the threshold, which is extremely regressive, and the welcome benefit from the rise in the employment allowance—and indeed anything else included in the figure of £23.8 billion, which was by far the biggest change in the Budget and which is why so many people are here today worrying about the Bill.

There is also an unexpected dynamic effect highlighted by the OBR, which means that, following the reduction in wages, profits and employment, this tax will raise over £5 billion less than the Treasury forecast, raising £18.3 billion in 2025-26 and nearly £10 billion less than the forecast in 2026-27. So there is a great deal of pain for wealth creators and effective employers, but not a lot of gain.

I cannot see how we can scrutinise the Bill without proper impact information, and I look forward to a proper discussion during the debate on Amendment 13. However, I think the Committee would also like to have authoritative, disaggregated figures on the impact on the health and care sectors under discussion today. That is why I am raising this now, and I hope the Minister will consider what he can do to assist the Committee so that we can have proper understanding and proper scrutiny. We want to do the right thing here.

It is against that sombre background that I shall speak to my Amendments 38 and 42, which have been grouped with this amendment. They seek to increase the employment allowance in the primary care sector. My purpose is to probe the Government’s openness to helping the sector a bit more through an increase. Perhaps the Minister could clarify the facts. The BMA has said that, as public authorities, they are unable to access support via the increased allowance and the noble Lord, Lord Scriven, made a similar point in relation to dentists. The Committee needs to know whether that is true.

Mine is a probing amendment and the first of several relating to Clause 3. To reply to the noble Lord, Lord Eatwell, as someone who has tried to reform taxes in the past, originally with the help of my noble friend Lord Heseltine as part of the deregulation initiative, it is very difficult to get simplification of the tax system. That is one reason why I have tabled an amendment relating to the employment allowance, because it comes at the matter in a different way.

Primary care is vital to the Government’s plans to improve the NHS. My fear is that the NICs changes, especially the lowering of the threshold and with part-time working so common in primary care, will lead to further problems in GP surgeries, increasing chronic conditions and waiting times for appointments across the NHS, and having the perverse effect that I think we will come back to as this Committee progresses.

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[Lord Forsyth of Drumlean (Con)]

If the noble Lord is going to make a Second Reading speech on an amendment, is it okay if we all do the same thing?

[Lord Livermore (Lab)]

I think the noble Lord did in his contribution; I remember him raising the minimum wage, for example. I do not think that is directly related to the amendment. We are all absolutely entitled to set out some contextual points in the points that we raise.

Let me turn directly to the amendments in the name of the noble Lord, Lord Scriven, the noble Baroness, Lady Kramer, and the noble Lord, Lord Randall of Uxbridge, which seek to exclude care providers, NHS GP practices, NHS-commissioned dentists, NHS-commissioned pharmacists, charitable providers of health and care, and those providing hospice care, from the new rate and threshold for employer national insurance. I say at the outset that I have listened very carefully to the points raised by all noble Lords during these debates and taken on board what has been said.

As I said, the difficult decisions the Government took in the Budget last year, including those in the Bill, were necessary to repair the public finances, protect working people and rebuild our public services. As a result of the measures in the Bill and wider Budget measures, the NHS will receive an extra £22.6 billion over two years to deliver 40,000 extra elective appointments a week. This investment is dependent on the Bill.

As noble Lords will know, the Government have already set out that they will provide support for departments and other public sector employers for additional employer national insurance costs. But independent contractors, including primary care providers, social care providers, charities, including hospices, and nurseries will not be supported with the costs from these changes. This follows the precedent for such national insurance measures. It is exactly the same as was the case with changes to employer national insurance rates under the previous Government’s plan for the health and social care levy.

Primary care providers—in general practice, dentistry, pharmacy and eye care—are important independent contractors, who provide nearly £20 billion-worth of NHS services. Every year, the Government consult each sector about what services it provides and what money it is entitled to in return under its contract. As in previous years, the issues we are debating today will be dealt with as part of that process.

The Government have announced a proposed £889 million uplift for general practice in 2025-26 and have set out the proposed areas of reform that will help us to deliver on our manifesto commitments. This is the largest uplift to GP funding since the beginning of the five-year framework; it means that we are reversing a recent trend, with a rising share of total NHS resources going to general practice. We have started consulting the General Practitioners Committee of the British Medical Association on the 2025-26 GP contract in England. We will consider a range of proposed policy changes. These will be announced in the usual way, following the close of the consultation later this year.

Turning to adult social care, the Government have provided a real-terms increase in core local government spending power of 3.5% in 2025-26, including £880 million of new grant funding provided to social care. This funding can be used to address the range of pressures facing the adult social care sector. Finally, we are also supporting the hospice sector, with a £100 million boost for adult and children’s hospices to ensure that they have the best physical environment for care, and £26 million of revenue to support children and young people’s hospices.

I turn to the amendments tabled by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Altrincham, seeking to increase the employment allowance for employers in the primary care sector and for dental practices. Currently, small businesses with national insurance bills of £100,000 or less receive a £5,000 employment allowance, which means that they can deduct £5,000 from the total national insurance they pay on their employees’ wages. Under the proposals in the Bill, the employment allowance will increase to £10,500 from April 2025.

The Bill also expands the employment allowance to all eligible employers by removing the £100,000 eligibility threshold. This will simplify and reform employer national insurance contributions so that all eligible employers now benefit. Increasing the employment allowance for specific sectors, including just the primary care sector and dental practices, as my noble friend Lord Eatwell said, would add additional complexity to the tax system and would be incoherent, given the wider changes to simplify the employment allowance made in the Bill.

These changes would also create additional costs. How would these additional costs be met—through more borrowing, lower public spending or additional revenue-raising measures? If so, where would these additional taxes fall? If the Government were unable to meet these additional costs, we would be unable to provide the extra £22.6 billion for the NHS.

In the light of the points I have made, I respectfully ask noble Lords to withdraw or not press their amendments.

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[Lord Eatwell (Lab)]

My Lords, I wonder whether noble Lords who have been referring to national insurance growth as a jobs tax have actually read the OBR assessment of the impact of the Budget on employment. If they have not, I will quote it here. It states:

“The … boost to output from this Budget reduces the unemployment rate by 0.3 percentage points, equivalent to around 90,000 people, on average in 2025 and 2026. Compared to our March forecast, the unemployment rate is lower across most of the forecast, but is in line with its unchanged estimated structural rate by the forecast horizon”.


Why is it that the OBR, having considered carefully the impact of the increase in national insurance, has told us that the level of unemployment is going to fall, in its estimation?

The reason was spelled out beautifully by the noble Lord, Lord Layard, at Second Reading. Perhaps nobody listened carefully to a distinguished professor of economics setting out why the characterisation of the national insurance rise as a jobs tax is seriously misleading in economic terms.

I hope the Committee will forgive me if I repeat the argument of the noble Lord, Lord Layard. The cost to an employer of the increase in national insurance determines the choices that the employer will make with respect to the input of labour in the output that he or she can sell. The increase in national insurance will indeed tend to encourage employers to lower the labour input per unit of output: that is, it will increase productivity. The level of employment then depends on the amount of output.

The amount of output—the overall level of employment—is determined, as the OBR points out clearly in the piece I quoted, is determined by the overall fiscal balance, and this Budget injects £26 billion of extra spending into the economy. Therefore, the economies in employment made by individual employers are significantly offset by the overall level of demand in the economy, because it is that overall level that determines employment, not the individual decisions.

That is what Keynes taught us in 1936, which is why this characterisation of the national insurance charge as a jobs tax that will cause unemployment actually misses out the vital issue of what the revenues from the tax are used for. If they are used, as they are in this Budget, to increase expenditure, as my noble friend Lord Livermore pointed out in his scene-setting discussion, then employment may rise or fall depending on the fiscal balance—and the fiscal balance of this Budget, as the OBR points out, will reduce unemployment.

[Lord Forsyth of Drumlean (Con)]

That is a very ingenious argument, and I hesitate to argue with such a distinguished economist, but just think of what the noble Lord said. He said that the increase in the labour cost as a result of this tax being imposed will force employers to improve productivity, and the way you improve productivity is by sacking the worker and replacing them with a machine, or AI or some other system. It is a bit of sophistry to suggest that it is not a jobs tax because it will only mean that some people will lose their jobs and that the improved productivity may have an effect. As for basing his argument on the predictions of the OBR, I think unemployment went up today.

[Lord Eatwell (Lab)]

It did not. The level of employment went down, but unemployment is not measured by that.

[Lord Forsyth of Drumlean (Con)]

Indeed, but let us not get into that argument. What is the biggest problem facing the country? It is that more than 9 million people who are of working age and capable of working are not working. An argument that suggests that by making it more expensive to take people on, and then add to that—I am not making a Second Reading speech —employment protection, that this will not result in job losses and therefore is not a tax on employment is, even by the standards of great economists, stretching the argument too far. The consequence of this will be, as the noble Lord acknowledged, that some people will surely lose their jobs because employing them will become too expensive.

[Lord Howard of Rising (Con)]

I just say, in relation to that and to the noble Lord’s arguments, that what he completely forgets is that manufacturing companies faced with this will simply move their production abroad. That is what he forgets.

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[Viscount Chandos (Lab)]

My Lords, I shall speak briefly on this group, particularly Amendments 4 and 5, but the arguments that I make really apply to many of these early groups because each one is a special plea. My noble friend Lord Davies of Brixton asked, “How can you speak out against an exemption in favour of veterans?”. The same could be said for small animals or whatever tugs at our heartstrings, but it comes back to the argument that my noble friend Lord Eatwell made so powerfully, which is that in an already complicated tax and national insurance system, we should avoid any further complexity if we can, and I think that the price which that may impose on different organisations is a price worth paying.

The noble Baroness, Lady Neville-Rolfe, talked about her involvement in attempts to achieve tax simplification when she was in government. It was the Conservative Government who introduced the Office of Tax Simplification and then abolished it, perhaps because it came up with the inconvenient truth that the agricultural and business relief regime should be reviewed and, implicitly, abolished.

At Second Reading, I made a declaration of interests which include being a trustee of two charities. One of them is a higher education institution, so it is covered doubly by Amendment 4 and Amendment 5. Many noble Lords who have spoken have referred to their personal experience of charities or different organisations. I have to say that I am struck by the fact that the organisations of which I am a trustee have, without any input from me, taken this philosophically as a cost that they must cope with. No increase in cost is welcome. Energy-led inflation was not. The insurance inflation that we are all suffering from, the wage inflation that we have seen and the overall increase in the cost of living are unwelcome costs for any organisation, large or small, to bear.

As I suggested at Second Reading, there is an understanding in many organisations, including commercial ones—I cited the comments of Mr James Daunt, as chief executive of Waterstones and his eponymous chain of bookshops—that the purpose of this revenue-raising from the changes to NI feeds into supporting the community from which organisations draw their employees, customers and donors. For this reason, although I do not welcome the increase in the cases of the organisations with which I am associated and of the many others that are similarly affected, I believe in the simplicity of applying the same rate to pretty much all organisations in the private and voluntary sectors. The arguments for simplicity outweigh those of the individual challenges that this measure will give organisations.

[Lord Forsyth of Drumlean (Con)]

My Lords, it is a great pleasure to follow the noble Viscount, Lord Chandos, who is very wise and diligent. For many years, we were together on the Economic Affairs Committee. I agree with him about the simplification of the tax system. Indeed, the Office of Tax Simplification was a recommendation from the tax commission that I chaired back in 2006 to George Osborne and David Cameron. It was implemented and, somehow, the Treasury managed to bog it down in a way that prevented it doing an effective job.

I agree entirely with the noble Lord, Lord Eatwell, that we need a simpler, fairer tax system. The simplest way of dealing with that would be not to have this increase at all because then there would not be the need to have these exemptions. This is a problem that has been created by the Chancellor and the Government. I must say, in speaking to these amendments, that Amendments 4, 5 and 8—

[Lord Eatwell (Lab)]

Okay, let us say that we do not have this measure at all. Is the noble Lord going to cover the expenditure by borrowing or is he not going to spend on the health service, care services and the areas set out by the Minister in his scene-setting remarks?

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[Lord Forsyth of Drumlean (Con)]

The noble Lord is very diligent in his reading. I am sure that he will have read the all-party report that has only just been published by the Economic Affairs Committee of this House, which points to where savings can be made in welfare in a way that will encourage people back to work to make a productive contribution to our economy. That is my answer to the noble Lord’s question.

I have great sympathy with the noble Earl, Lord Kinnoull. As I was about to say, I do not know who did the grouping for Amendments 4, 5 and 8 but it is hard to think of more diverse subjects than education, registered charities, housing associations, town councils and parish councils, all of which are in one grouping. I am astonished that we are expected to deal with all of them here, so I may test the patience of the Committee in trying to address all of them.

Do noble Lords remember “Education, education, education”, that great banner carried by Sir Tony Blair, then leader of the Opposition and Prime Minister? Whatever has happened to the Labour Party that it wants to put a tax on the provision of education for those aged five and younger? It is most extraordinary, and therefore this amendment is very sensible. We all know that women, in particular, find it extremely difficult to combine childcare with work; this is adding to the cost of childcare.

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[Lord Livermore (Lab)]

My Lords, I am grateful to all noble Lords. I will address the amendments and proposed new clauses proposed by the noble Baronesses, Lady Grender and Lady Kramer, and the noble Lords, Lord Storey, Lord Sharkey and Lord Randall of Uxbridge, which seek to exclude early-years settings, universities, charities, housing associations and town and parish councils from the new employer national insurance rate. I have listened very carefully to all contributions made in this debate and, of course, I understand the points raised.

The Government recognise that early-years providers have a crucial role to play in driving economic growth and breaking down barriers to opportunity. We are committed to making childcare more affordable and accessible. That is why, in our manifesto, the Government committed to delivering the expansion of government-funded childcare for working parents and to opening 3,000 new or expanded nurseries through upgrading space in primary schools to support the expansion of the sector.

Despite the very challenging circumstances the Government inherited, in the Budget in October the Chancellor announced significant increases to the funding that early-years providers are paid to deliver government-funded childcare places. This means that total funding will rise to more than £8 billion in 2025-26. It is very likely that many private nurseries will be able to claim the employment allowance, as receiving public funds does not necessarily mean that work is of a public nature, and they should check HMRC guidance.

On universities, I of course recognise the great value—

[Lord Forsyth of Drumlean (Con)]

I accept that more money has been allocated to nursery and early-years provision, but providers are also facing increased costs. Does the Minister not accept that the national insurance charge is one that has been implemented by the Government, so the Government are giving with one hand and taking away with the other? The Minister is not really addressing the point that this is an unbudgeted cost that is being imposed on top of all the other costs that they face.

[Lord Livermore (Lab)]

I totally understand the points that the noble Lord is making but, as I said at the outset, there are specific reasons for the Bill. Those decisions are difficult decisions, but they are necessary decisions.

On universities, I recognise the great value of UK higher education in creating opportunity, being an engine for growth in our economy and supporting local communities. The Budget provided £6.1 billion of support for core research and confirmed the Government’s commitment to the lifelong learning entitlement, a major reform to student finance that will expand access to high-quality, flexible education and training for adults throughout their working lives.

The Secretary of State for Education has since confirmed that maximum fees will rise in the academic year 2025-26 for the first time since 2017, from £9,250 to £9,535 for a standard full-time undergraduate course. This was a difficult decision which demonstrates that the Government are serious about the need to put our world-leading higher education sector on a secure footing.

I have previously set out the Government’s position on additional impact assessments.

I turn to charities and housing associations. The Government recognise the need to protect the smallest businesses and charities, which is why we have more than doubled the employment allowance to £10,500, meaning that more than half of all businesses, including charities, with national insurance liabilities will either gain or see no change next year.

The Government also provide wider support for charities via the tax regime. The UK’s tax regime is among the most generous in the world, with tax reliefs for charities and their donors worth just over £6 billion for the tax year to April 2024.

More broadly, the Government deliver a number of grant and support programmes, including the community organisations cost of living fund last year and the ongoing social enterprise boost fund. Across 2023-24, the National Lottery community fund made grant awards totalling more than £900 million, 84% of which were under £10,000, with the majority supporting grass-roots organisations.

Regarding housing associations, the Government have announced major steps towards delivering a once-in-a-generation increase in social housing, including supporting the housing associations that deliver this. We are consulting on long-term social rent settlements to provide housing associations with the long-term stability they need to deliver crucial services. I am afraid that I cannot comment on the specific case that the noble Baroness, Lady Grender, set out, as I do not have all the information about it, but I am of course more than happy to discuss with her at any time. On the wider points, any exemptions, carve-outs or delays would of course undermine the fundamental purpose of the Bill, which I have set out before.

Finally, Amendment 8, tabled by the noble Baroness, Lady Kramer, and the noble Lord, Lord Storey, seeks to exclude town and parish councils from the employer national insurance rate change. The Government have no direct role in funding parish and town councils and therefore do not intend to provide further support for the employer national insurance changes. This is in line with the approach taken for previous national insurance policy changes, including the previous Government’s health and social care levy.

All these proposed amendments would of course come at a cost. They would necessitate either higher borrowing, lower public spending or new revenue-raising measures. That is not what this Government intend to do. For the reasons I have set out, I respectfully ask noble Lords not to press their amendments.

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[The Deputy Chairman of Committees (Viscount Stansgate) (Lab)]

In answer to the noble Baroness, I am in the hands of the usual channels.

[Lord Forsyth of Drumlean (Con)]

Good God.

[The Deputy Chairman of Committees (Viscount Stansgate) (Lab)]

They were once described as some of the most polluted waterways in Europe.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Forsyth of Drumlean Excerpts

Wednesday 8th January 2025 Lords Chamber

[Baroness Kramer (LD)]

My Lords, we on these Benches are focused on the substance of this important Bill, which we demonstrated with our regret amendment on Monday. Disputing where Committee stage is debated is very much a second-order issue, especially when, to make progress on the substance, we will have to try to find some common ground. During the years of the Conservative Government, significant mixed Bills of equal impact on people were debated in Grand Committee at Committee stage. We did not seek to vote against that then. I do not see the change of Government as a reason to vote against that now, and we will support from these Benches the Government this afternoon.

[Lord Forsyth of Drumlean (Con)]

My Lords, forgive me for pointing out that on the Liberal Democrat Benches, the turnout in support of their regret amendment on Monday was less than half their complement. They moved a moved a regret amendment; they made fine speeches about how damaging this Bill will be to charities, hospices and other organisations; and then they also, at the end of the debate, made it clear that they would not give the whole House an opportunity to consider this on the Floor of the House. I do not know what is going on between the Liberal Benches and the Labour Party, but what is clearly going on is some kind of deal—a deal that is against the interests of the people of this country, including many charities, hospices and other organisations.

It is completely wrong to argue that in the Grand Committee this Bill can be subject to similar scrutiny. If it is on the Floor of the House, we can vote on some of the measures that we agreed with the Liberal Democrats need to be considered. We can have proper scrutiny. This is simply an attempt by the Government to hide their embarrassment at the atrocious consequences of this unprecedented national insurance Bill.

[Lord Eatwell (Lab)]

The noble Lord, Lord Forsyth, suggested just now that it would not be possible to vote in Grand Committee. He is in error. I know that because I led for the Opposition on an insurance Bill about 12 years ago and there was a vote in the Committee, which the Opposition won. So it is entirely possible for the same process, the same level of scrutiny and the same seriousness to take place in Grand Committee as on the Floor of the House.

--- Later in debate ---

[Lord Livermore (Lab)]

I am sorry. I apologise; I meant procedure. The noble Baroness did not address a single question of procedure. She sought to relitigate all the arguments that were made extensively at Second Reading. That shows that we are far from seeking somehow, as the noble Lord, Lord Forsyth, said, to shy away from debate. Both he and I sat through six hours of debate on the Bill on the Floor of the House just on Monday, so in no way am I or the Government seeking to shy away from debate. I am very happy to debate these matters on the Floor of the House any time, as the noble Lord knows.

As I said in my opening remarks, every national insurance contributions Bill since 2006—in answer to the noble Baroness, Lady Williams of Trafford, this one has not been fast-tracked; the two she mentioned were fast-tracked—has been considered in Grand Committee. This has been the normal venue for small or technical Bills—and, as the noble Baroness said, this is indeed a small Bill—including some that have made substantial changes. She mentioned some that made extremely substantial changes that were considered in Grand Committee.

The precedent set over the past two decades demonstrates that Grand Committees are well equipped to handle the detailed examination that is required for such legislation. This Bill follows the same technical nature and the Government believe that it should be treated in the same manner as all its predecessors. We of course understand and respect the legitimate concerns that have been raised in relation to the Bill. We are committed to ensuring thorough and detailed scrutiny of the legislation which, following the precedent of the past two decades, we believe will be best achieved in Grand Committee.

[Lord Forsyth of Drumlean (Con)]

Will the Minister take the opportunity to correct his noble friend and confirm that Divisions are not allowed in Grand Committee?

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Forsyth of Drumlean Excerpts

2nd reading
Monday 6th January 2025 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, it is a pleasure to follow the right reverend Prelate. I look forward to him tabling amendments at a later stage in the consideration of the Bill to meet the requirements that, as he has quite rightly pointed out, are essential for transport for children with special needs.

This is an unusual proceeding, is it not—that we are allowed in this House to consider a Budget measure? The reason we are able to do it is that national insurance is not a tax. I repeat: it is not a tax. It is a specific, compulsory social insurance scheme. Therefore, I was surprised to hear the Minister arguing that it was necessary to put it up to close his £22 billion black hole, which, of course, does not exist. If it did exist, it would surely be entirely inappropriate to use national insurance to meet requirements that were not specific for the purpose of national insurance.

As it is not a tax—even if this Government treat it as if it were—we are able to discuss the Bill in this House. We are able to reject it, and to amend it. The Government’s response is to put it in a cupboard, around the corner, in the Moses Room, where there will be no opportunity to amend it, in the hope that no one will notice the severe damage that is being done to our country in so many sectors, as we have heard. As the noble Baroness, Lady Kramer, pointed out, this is an opportunity to ask the Government to think again. I look forward to seeing the Liberal Democrats coming through the Lobbies with us in support of amendments to change the nature of this Bill; I think not. I think not because it is all posturing on their part; it is just empty rhetoric.

Even if we were to accept, as the OBR did not, that there was a £22 billion black hole, after all the arrangements are made to compensate very small businesses and others for the impact of this crazy scheme, the net revenue that the Government will achieve is about half of the £25 billion. Some people say it will be even less; some say it could be as little as £10 billion. Is that not a coincidence? That £10 billion is almost exactly the same figure as the cost of the inflationary pay increases given by this Government on taking office to the most militant unions in the country, including the BMA. They pretend that this is about dealing with some black hole left by the previous Government when, in fact, as the old adage—the old cliché—says, “When in a hole, stop digging”. If the Minister thought he was in a hole, why on earth did he keep digging by allowing a £10 billion inflationary increase in pay, without any requirement to improve productivity with a view to financing it?

The HMRC says—I assume that the Minister will not challenge HMRC’s figures—that 940,000 businesses will lose an average of £800 per employee, at a time when the economy is stagnant. Six months of this Government have brought growth to a complete, shuddering halt, and brought back the ghost of stagflation to our country, which we remember in the 1970s as the inheritance that we got from irresponsible government policies.

The list of organisations—private sector, public sector and charitable—in this country is endless. We have just heard from the right reverend Prelate about the problems for the Church in meeting the stipends—it might be worth reducing the contribution in reparation for alleged crimes against slavery to meet that requirement. We have heard from leading retailers that there will be major store closures. We have heard from pubs and restaurants already severely damaged by the impact of Covid, along with the rest of the country, about how they will be affected.

Faced with that—faced with the problems in the hospitality industries and others—this Government decide to reduce the schedule to people who are paid £5,000 a year in order to create a requirement to pay national insurance. They say, “We are going to compensate that because you can apply for a rebate”. That means more bureaucracy and more impediments to businesses that are struggling. In my time I have done quite a bit to support Marie Curie Cancer Care, so I know intimately how important its work is. This measure will cost that organisation £3 million. That is a lot of coffee mornings up and down the country, with volunteers raising money for charities such as Marie Curie.

There are many other examples, such as homeless charities, childcare, which has been mentioned—single parents are already struggling, yet we are told this is not going to affect working people—and universities. Then there is the nasty, vicious imposition of VAT on private schools, which will mean that many children with special needs are no longer able to get the support they need because the state sector is unable to provide it. I know the Government will say, “People who are designated will get support”, but it takes years to get an assessment and there are many kids—the right reverend Prelate mentioned children with autism—for whom a move from school is disturbing.

Then there are parish councils and GPs. I had a representation from the BMA telling me that this was iniquitous and would have an impact on GPs—absolutely so. That is the same BMA that was campaigning and striking for more money for doctors, and now it is arguing that there should be more money for GPs because the Government are saying they need the money in order to pay that obligation.

I understand that I have a different figure for the cost of adult social care. It is true that the last Government messed up on social care, and that this House was unanimous across all Benches on the need to address social care to protect the NHS. Where are the people on the Benches opposite now speaking up for social care, where I believe the costs are nothing short of £2.8 billion?

Perhaps I have been a little tough on the Chancellor, but she is right about one thing: we desperately need growth in this country. The reason we are not getting it is that the state has become too large and overmighty; it has become a cuckoo in our country’s economy. The Government said this Budget was necessary in order to stabilise the economy, but what have they done? They have not only added this tax but increased borrowing at a time when the costs of borrowing are growing as a result of the actions they have taken.

We keep hearing that Liz Truss crashed the economy because she made tax cut proposals that were not equally balanced by cuts in public expenditure and, as a result, the market for 10-year gilts went up. I have to tell the Minister that, as has been pointed out, the market for gilts is now at a higher level than it was then. So am I entitled to say he has crashed the economy because of the imposition of this tax?

Of course we all know that taxes are too high and that the previous Government allowed that to happen, but that was because we had Covid and Ukraine. The only reason why this Government are continuing to increase borrowing and so on is that they want to have a bigger state.

If we are to get Britain working again, we need to get people back to work. I actually agree with the noble Lord, Lord Macpherson, about merging income tax and national insurance because, as I hope I have demonstrated, it is a fantasy to treat it as being anything other than a tax. Indeed, the tax commission that I chaired for George Osborne in 2006 recommended that, but they were not too keen on the idea because it would make it absolutely transparent how much of people’s hard-earned money the state was taking in taxation. The noble Lord is right about that.

I also find it extraordinary that as someone—your Lordships may be surprised to hear—who is over pensionable age, I do not have to pay national insurance on my income. The Minister asked us to say what else they could have done. Well, they could have done that instead of imposing a tax on employment. It is estimated—of course, we do not have the proper figures—that more than 9 million people in this country who are of working age and capable, in theory at least, of being at work are not working. To resolve that situation by making it more expensive for people to take on others as employees seems to me an extraordinary act of madness.

The CBI, an organisation that I do not often cite, believes, following a survey of its members, that 50% of them think that the imposition of these national insurance changes will result in its members cutting the numbers of jobs, and that two-thirds of its members believe that it will curtail recruitment. Bloomberg estimates that 130,000 jobs will be lost. The noble Lord, Lord Macpherson, talked about full employment; how can we do so when we have so many people not working at all? This is a nonsense. He also talked about the importance of addressing the numbers of elderly people who now have to be supported by a shrinking working population. I have to say to him—nothing personal, you understand—that having index-linked final salary pension schemes in the public sector and increasing the burden on people in the private sector, who do not enjoy such gold-plated pensions, is simply unsustainable.

If those on the Front Bench opposite are worried about black holes, they should consider the black hole represented by that. It is a contingent liability of £1.3 trillion, which makes the £22 billion black hole look like an asteroid compared with it, or with the black hole that student loans are creating. It is estimated that the nominal debt on student loans will be more than £1 trillion in 25 years. These are the black holes that should be addressed.

The truth is that our country is running on empty. We desperately need to reinvigorate the private sector to create the wealth to meet those obligations, and we are not going to do that by hobbling and damaging the private sector with impositions of this kind. If the Government want growth, we need less bureaucracy—not a quango being created every week. We want to be encouraging investment from overseas, not penalising it and forcing people to leave by introducing non-dom taxes. I personally know a large number of people who have already left the country. There must be a huge number because I do not know that many billionaires, unfortunately.

If you tax something, it is usually because you want less of it. Taxing employment makes no sense at all. If you want to tax something and to look at other sources of revenue, deal with the unfair competition from Amazon and other online retailers with our high street retailers. Deal with gambling, as the noble Baroness said, or with welfare dependency, which is partly at the root of the problems in this country.

The Government’s great boast, they say, is “Not a penny more on payslips” as a result of this Budget. Sadly, for many there will be no more payslips and no more pay increases. I hope that the Government think again and that there will be an opportunity in Committee for us to send a message to the House of Commons to rethink this incredibly damaging proposal, which goes to the heart of the Chancellor’s pledge to get growth in our country.

Autumn Budget 2024

Lord Forsyth of Drumlean Excerpts

Monday 11th November 2024 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, the Minister, in his speech, criticised the previous Government’s record on growth. Well, this is certainly a Budget for growth, is it not?

There will be massive growth in taxes, massive growth in the debt that our children and grandchildren will inherit, and growth in the cost of it too, as the noble Lord, Lord Burns, pointed out. There will be growth in inflation, with supermarkets already warning of food prices rising as the Chancellor adds billions to the cost of staff.

There will be growth in blocked beds and hospital waiting lists, as yet another Government fail to tackle social care. With employers’ national insurance increases being imposed on low-paid, part-time workers for the first time, we can be certain of care home closures, rising fees that councils cannot pay and our most vulnerable citizens being denied the support that they need, as the noble Lord, Lord Fox, pointed out in his remarks. Building costs will soar too, undermining the Government’s housing targets.

There will be growth in class sizes, as pupils are forced to leave private schools, with a vicious, wicked mid-term tax on education leading to private school closures and heartbroken parents being forced to tell their children that they can no longer stay at school with their friends because of this Government.

There will be growth in the number of family-owned businesses and farms—held for generations—that are forced to throw in the towel and be broken up, reducing competitiveness, enterprise and choice. There will be growth in the number of wealthy individuals leaving our country and, with them, the private investment capital and tax revenues we desperately need. There will be growth in human misery, as children with special needs are forced out of the security of their specialist school places with no alternative support available from a state already struggling to meet demand.

There will be long-term growth in the number of folk with inadequate pension provisions as constant changes, state interference in investment policies, new taxes and uncertainty destroy trust in saving for a pension. There will be growth in the size of the state and, with it, unaffordable, unfunded, index-linked final salary pensions.

There will be growth in unaffordable student debt. When we looked at this in the Economic Affairs Committee some years ago, we were told that, by 2050, student debt would amount to £1.2 trillion on the Government’s balance sheet. This Government are adding to that.

There will be growth in private sector unemployment as firms are forced to shed labour to meet the tax burden, business rate increases, and the costs and risks of Labour’s so-called employment rights. Insolvency numbers are already rising.

The growth our country desperately needs if we are to have decent public services, and which this Budget does not provide, comes from private enterprise, from releasing the forces of competition, from flexible labour markets, and from government as referee and not player. It comes from unleashing the aspirations of the British people, from rewarding hard work and thrift, and from giving folk in genuine need a hand up and not a handout. It comes from nurturing the family, encouraging self-reliance, independence and excellence, and from encouraging the basic aspiration to hand on a better life to our children, not taxing it.

The adage “primum non nocere”, or “first do no harm”, is often associated with the medical profession. It also applies to Chancellors of the Exchequer. I fear that our first woman Chancellor will be remembered for having forgotten this. Of course the Government inherited a bad situation, as the costs of Covid and war in Europe were funded by quantitative easing, but to deliberately set out on a path that history tells us will sink our economy in pursuit of failed dogma and class war is unforgivable. It is astonishing, is it not, that in a matter of weeks the Government have squandered a great victory, set a course heading for the rocks and betrayed the trust of millions of voters who supported them in the general election?

It is said that the crew rearranged the deckchairs on the “Titanic” when faced with inevitable disaster. In Downing Street now, they are rearranging the pictures; out go the portraits of Margaret Thatcher and William Gladstone, both of whom understood, as Gladstone put it, that

“money is best left to fructify in the pockets of the people”.

Having broken their election promises, the Government now pledge that there will be no return to austerity. Without growth and the kindness of strangers, that is just empty rhetoric. This divisive, nasty and irresponsible Budget puts both prospects in mortal danger.

Wales: Public Services

Lord Forsyth of Drumlean Excerpts

Tuesday 5th November 2024 Lords Chamber

[Lord Livermore (Lab)]

No, I do not think I agree, and I am not sure that the formula that the noble Baroness sets out would deliver a better deal for Wales or any of the devolved Administrations. The Barnett formula has been revised recently and now includes a needs-based factor to ensure fair funding for Wales in the long term. The recent Budget delivered a very good deal for Wales: the Welsh Government settlement for 2025-26 is, as I have said, the largest in real terms of any Welsh Government settlement since devolution.

[Lord Forsyth of Drumlean (Con)]

My Lords, might the Minister take the time to read the report of this House’s Select Committee on the Barnett Formula, which was delivered 15 years ago? It clearly showed that Wales loses out substantially under the Barnett formula and recommended that we move to a needs-based formula which would treat all parts of the United Kingdom fairly. The previous Government ignored that for their own reasons, but now is an opportunity for a Labour Government to help a Labour Administration in Wales.

[Lord Livermore (Lab)]

I always take the noble Lord’s recommendations extremely seriously. I will certainly read the report he recommends, although it is interesting that it came out 15 years ago and for the subsequent 14 years his own party was in government.

Crown Estate Bill [HL]

Lord Forsyth of Drumlean Excerpts

Report stage
Tuesday 5th November 2024 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, I rise briefly to support Amendment 5 in the name of the noble Earl, Lord Kinnoull. In passing, I still am rather confused by this Bill, which covers Scotland but not Crown Estate Scotland. That seems a bit of a contradiction, but it is clear there is a degree of overlap between the two. There certainly is an overlap of opportunity—we have heard about Great British Energy et cetera.

It is also clear that, while devolution must be respected and that is extremely important, Crown Estate Scotland and the Scottish Government want to have the same levels of flexibility. This simple amendment keeps the matter on the table and that is the key here, so I hope the Minister will be able to accept it.

[Lord Forsyth of Drumlean (Con)]

My Lords, I rise very briefly to speak to Amendment 5 in the name of the noble Earl, Lord Kinnoull. This is an entirely sensible proposal that I cannot imagine for a moment the Government would wish to resist, and which respects the autonomy of the devolution settlement. If I were a commissioner on the Crown Estate in England or the Crown Estate in Scotland, I would very much welcome this provision, and I congratulate the noble Earl on his ingenuity in tabling an amendment that would enable us to deal with this lacuna. I entirely understand why the Liberal Benches would not want to be accused of doing anything that undermined devolution. The noble Earl has found an elegant way of dealing with this, and I very much hope that the Government will support it.

[Baroness Vere of Norbiton (Con)]

My Lords, I entirely agree with my noble friend Lord Forsyth. In tabling Amendment 5, the noble Earl, Lord Kinnoull, has hit upon something here; it is a report that would be worth doing. When I was having discussions about the Bill between Second Reading and Committee, I spoke to people in the port sector and they were very concerned that, if there is to be investment in ports in one part of the country, that investment should be equally likely to happen in another part of the country—namely, Scotland. It is an important opportunity, and I am sure that the Minister will respond in a positive fashion, as far as he can.

Turning to government Amendment 3, I am grateful to the Minister, who listened to concerns from all sides of the House about ensuring that sufficient information is forthcoming about the relationship between Crown Estate and Great British Energy. I am somewhat disappointed that we never saw the partnership document. I still suspect that that is because it does not exist, so I am not entirely sure what the partnership is; but let us put that to one side. I am looking forward to seeing information come through on the results of this partnership as we go forward.

I note what the noble Earl, Lord Russell, said about the intention behind his Amendment 8. Any noble Lord who has looked at the Crown Estate annual report will know that it is already quite detailed, and I appreciate that a lot of work has been put into sharing information about the organisation with stakeholders. I suspect that his amendment is too detailed to be wholly useful, but I am sure that he has picked out various elements that the Crown Estate will no doubt take note of and include in future reporting.

--- Later in debate ---

Moved by

[Lord Forsyth of Drumlean]

4: After Clause 2, insert the following new Clause—
“Salmon farms on the Crown EstateAfter section 3 of the Crown Estate Act 1961, insert—“3A Salmon farms on the Crown Estate(1) In carrying out their functions under this Act, the Commissioners must assess the—(a) environmental impact, and(b) animal welfare standardsof salmon farms on the Crown Estate.(2) If the assessment under subsection (1) determines that a salmon farm—(a) is causing environmental damage, or(b) has significant animal welfare issues,then they must revoke the licence for the farm in question.(3) The Commissioners must assess the potential—(a) environmental impact, and(b) animal welfare standardsof applications for licences for salmon farms on the Crown Estate.(4) If the assessment under subsection (3) determines that an application for a licence for a salmon farm—(a) may cause environmental damage, or(b) raises significant animal welfare concerns,then they must refuse the application.””

[Lord Forsyth of Drumlean (Con)]

My Lords, I am tempted to take this amendment, frame it and put it in my downstairs loo, given that it is supported not just by the noble Baroness, Lady Jones of Moulsecoomb, but by the noble Lord, Lord Sikka, and my noble friend Lord Strathclyde. This is a new experience for me and shows the extent to which this amendment makes sense. It is, of course, the same amendment as I tabled in Committee. I should perhaps re-declare my interest as a salmon fisherman; I never kill a salmon, but I fish for them and my family has a timeshare week on the River Tay.

I am sure the House will be relieved that I do not plan to repeat everything I said in Committee about the extensive damage that salmon farming can cause if not properly regulated. I gave a number of examples, and examples of countries that are going so far as to ban salmon farming altogether. That is not my purpose, but I made a reasonably robust speech about the dangers of salmon farming, and I am surprised that I have heard not a cheep from the industry or, indeed, from the Crown agents to push back on anything I said, so I assume that this perfectly sensible amendment causes no concern. Nor should it, because all it does is provide that the Crown Estate commissioners in carrying out their functions under the Act must assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate. If the assessment determines that a salmon farm is causing environmental damage or has significant animal welfare issues, they must revoke the licence for the farm in question. Who could possibly be against that? Also, the commissioners must assess the potential environmental impact and animal welfare standards of applications for licences for salmon farms on the Crown Estate, and if the assessment determines that an application for a licence for a salmon farm may cause environmental damage or raise significant animal welfare concerns, they must refuse the application. This is a perfectly sensible provision, which places a clear duty on the commissioners.

The Minister was kind enough to arrange a very short meeting with me at which he indicated that he might not be able to support the amendment. I am really looking forward to hearing why, because he was unable to tell me at that time what his reasoning might be. I was struck in the proceedings earlier today by the emphasis that he put on the essential duty for the protection of the seabed and, of course, protection of the seabed is central to some of the issues, apart from the protection of salmon and everything else.

--- Later in debate ---

[The Earl of Devon (CB)]

My Lords, briefly—I did speak at Second Reading but failed to be here for Committee—I thank the noble Lord, Lord Forsyth, for his excellent introduction. The challenge I give to those proposing this amendment—particularly the noble Baroness, Lady Jones—is: why is it so narrow? Why are we focused solely on salmon farms and salmon fishing?

The reason I rise—and I note my interest—is that the foreshore of the River Exe estuary is absolutely inundated with non-native Pacific oysters, which are carpeting the foreshore and depleting the stocks of crabs, and bait digging is now impossible across this foreshore. This pest was introduced by the Crown Estate’s junior cousin, the Duchy of Cornwall, which introduced Pacific oysters into the Helford down in Cornwall and this pest has now spread across all the estuaries of the south-west peninsula. If the Crown Estate had been responsible and had known what it was doing in granting leases to Pacific oyster farmers, this would not have happened and we would have proper, sustainable mussel farming and crab tiling, as we have had for centuries on the Exe estuary.

While salmon farming is obviously important and is a pest, this should expand to all sorts—

[Lord Forsyth of Drumlean (Con)]

If the noble Earl is concerned about the wider thing, he will find that two later amendments in my name cover the point he is making.

[The Earl of Devon (CB)]

I appreciate that from the noble Lord, Lord Forsyth. Perhaps he could cover that in his winding up.

I think it is important. The focus on salmon farming is perhaps too focused and this should be much broader.

--- Later in debate ---

[Lord Forsyth of Drumlean (Con)]

My Lords, it is not much fun being a Minister when you have to read out a speech like that. I suspect that, like all of us in the Chamber, the Minister is concerned about the animal welfare and environmental issues. What he had to say about the Scottish Government, as opposed to the Scottish Crown Commissioners, was rather revealing, but I shall not go there. However, I thank everyone who has spoken in this debate, particularly my noble friends Lord Strathclyde and Lord Trenchard, and the noble Baroness, Lady Jones—our being so aligned must be a first. I am also grateful to the noble Earl, Lord Kinnoull. The noble Earl, Lord Peel, asked who would do the assessment. The Minister said that, in Scotland, SEPA and other agencies are charged with looking at the damage caused.

I gently point out to the Scottish Government, in their complacency, the number of fish that have escaped from farms, doing real damage and destroying the wild population. As far as I am aware, no sanctions have been imposed against a billion-pound industry operating around the world where Governments have been forced to intervene and close them down in some circumstances. We are well aware of the danger.

I am very disappointed by the Liberal Democrats; this is almost a permanent condition for me, but on this occasion I really am very disappointed. I think it was Amendment 8, which we discussed earlier, on which the noble Earl, Lord Russell, argued that there should be a report which could then be considered by the environment committee and others. He was actually arguing for a method allowing some parliamentary scrutiny. I have always thought of the Liberal Democrats as very determined to put a duty on, for example, landlords and others, as property owners, to behave responsibly, and that is what this amendment would do. I find this new alliance, whereby the Liberal Democrats do all kinds of somersaults in order to support the Government, very intriguing, and wonder what can possibly be behind it.

[Earl Russell (LD)]

There are no somersaults here. My previous amendment did not relate to devolution. I return the question: does the noble Lord admit that his amendment applies only to one salmon farm? Does he recognise that that is not a good way to make legislation? I fully support what he is trying to do, and am not doing somersaults to protect the Government, but the issue needs to be resolved with Scotland. This is not an English issue but a Scottish one. On these Benches, we believe strongly in devolution. The amendment sounds good but it does little, and that does damage to us as lawmakers, to the standing of this House and to devolution. It does nothing to protect any fish.

[Lord Forsyth of Drumlean (Con)]

I am grateful to the noble Earl. He may be disadvantaged, compared with others in this debate, because he is not—I do not think—a salmon fisherman. If he were, he would know that English salmon go through the Crown Estate waters up into Scottish waters, where there are salmon farms. Therefore, this amendment does impact on English salmon. There may be only one salmon farm, but if he was concerned about preserving salmon which occupy the rivers in England, he would be much more enthusiastic about this amendment than he appears to be. My noble friend Lord Douglas-Miller, who was chairman of the Atlantic Salmon Trust, has done wonderful work on this, so I am afraid that the noble Earl will not get away with the idea that, because there is only one salmon farm in English waters, a duty on the Crown Estate commissioners to consider the environmental impact has no impact on salmon south of the border.

I will repeat a point made earlier in the debate. In response to the amendment of the noble Earl, Lord Kinnoull, with enthusiastic support from the Front Bench, we agreed that there should be an exchange of views between the commissioners and that they should learn from each other. We have also heard from the Minister how the Scottish Government are utterly complacent about this. We have seen the results of that and the near extinction of this noble fish, the salmon.

[Baroness Jones of Moulsecoomb (GP)]

Pollution of the seabed does not exist only in Scotland, obviously. It will move around.

[Lord Forsyth of Drumlean (Con)]

I am very grateful to the noble Baroness—I feel I should call her my noble friend. I find I am being asked to have meetings with the activists who film the salmon farms illicitly. I will have to go on a protest march if the Government do not accept this amendment. I know that the Minister has done everything he can on this, but I do not think the response is satisfactory. I beg to test the opinion of the House.

Fiscal Rules

Lord Forsyth of Drumlean Excerpts

Tuesday 29th October 2024 Lords Chamber

[Lord Livermore (Lab)]

I wholeheartedly agree with both points made by my noble friend. Our fiscal rules, as he says, were set out by the Chancellor in her Mais Lecture and set out again in our manifesto. Everything that we have said subsequently is consistent with what we said in our manifesto, and I think that the policy of the Opposition is the reason our country is in the state it is in. It is why growth has been held back and why our critical infrastructure is basically on its knees.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am a little confused. The Chancellor said before the election that she would not change the fiscal rules, because that would be fiddling the figures. Was she right then and wrong now? Can the Minister explain why we are having this Statement at all, ahead of the Budget? Why is it not part of the Budget consideration? Is it to distract attention from the fact that the Government are basically fiddling the figures and, in fiddling the figures, committing us to borrow more money to pay the interest on the money that has already been borrowed?

[Lord Livermore (Lab)]

The noble Lord knows that I have huge respect for him, so I hate to say when he is wrong, as I think he is in his first point. We were extremely clear that we would change the fiscal rules to the new ones that we set out, first, as my noble friend Lord Eatwell said, in the Mais Lecture and then in our manifesto, which said:

“This represents a clear break from the Conservatives who have created an incentive to cut investment; a short-term approach that ignores the importance of growing the economy”.


We were crystal clear that we would change the fiscal rules. On the second point, it is perfectly reasonable that, when the Chancellor is at the IMF, she sets out her policies in this regard.

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[Lord Livermore (Lab)]

I am grateful to the noble Lord for highlighting the guard-rails that will be set out tomorrow, when further details will be set out in the Budget.

[Lord Forsyth of Drumlean (Con)]

My Lords, the noble Lord corrected me and said I had made a mistake in saying that the Chancellor had said that she would not alter the fiscal rules, because that would be fiddling the figures. On 9 October 2023, in interviews around the Labour Party conference at that time, that is exactly what she said. She stressed that Labour would not alter the fiscal rules to fit its spending goals, as doing so, in her words, amounted to “fiddling the figures”. What happened between October 2023 and the Mais Lecture to change her mind about the unwisdom of fiddling the figures?

[Lord Livermore (Lab)]

Nothing changed. There is a slight misunderstanding here. We have always been very clear that we would change the previous Government’s fiscal rules. The Chancellor was referring to the fact that we would not change the fiscal rules we set out—and we have not. The fiscal rules that we are delivering absolutely fit our manifesto commitments, and I do not understand the lack of understanding on the Benches opposite. The

“stability rule will mean that day-to-day spending will be matched by revenues”,

exactly as we committed to in our manifesto—that is a direct quote. In addition, the investment rule will deliver on our manifesto commitment to get debt falling as a proportion of our economy. Both those things were set out in our manifesto, both were set out in the Mais Lecture and both will be delivered in tomorrow’s Budget.

Working From Home: Public Sector Productivity

Lord Forsyth of Drumlean Excerpts

Wednesday 23rd October 2024 Lords Chamber

[Lord Livermore (Lab)]

It is an interesting question, and the answer is yes, I would be very willing to look at those impacts. As we have been discussing, labour supply has impacts across the economy. In rural areas, where sometimes it is difficult to travel into work, being able to work from home and the ability to have fast-speed internet connections can make a massive difference, and I would be more than happy to look at those issues.

[Lord Forsyth of Drumlean (Con)]

Is the Minister confident that working from home is increasing productivity and does he think there is any correlation between the rise in the number of people watching daytime television and the rise in the number of people working from home?

[Lord Livermore (Lab)]

At no point in any of my answers did I say it raises productivity—just so I am very clear. I will read from the IMF’s report, for the noble Lord’s benefit:

“Classic firm and individual micro studies typically find that hybrid working … has a roughly flat impact on productivity. Working from home benefits workers by saving them from exhausting commutes and typically provides a quieter working environment. But by reducing time at the office, it can also reduce employees’ ability to learn, to innovate, and to communicate. These positive and negative effects roughly offset each other, generating no net productivity impact”.

Crown Estate Bill [HL]

Lord Forsyth of Drumlean Excerpts

Committee stage
Tuesday 22nd October 2024 Lords Chamber

Moved by

[Lord Forsyth of Drumlean]

37: After Clause 2, insert the following new Clause—
“Salmon farms on the Crown EstateAfter section 3 of the Crown Estate Act 1961, insert—“3A Salmon farms on the Crown Estate(1) In carrying out their functions under this Act, the Commissioners must assess the—(a) environmental impact, and(b) animal welfare standardsof salmon farms on the Crown Estate.(2) If the assessment under subsection (1) determines that a salmon farm—(a) is causing environmental damage, or(b) has significant animal welfare issues,then they must revoke the licence for the farm in question.(3) The Commissioners must assess the potential—(a) environmental impact, and(b) animal welfare standardsof applications for licences for salmon farms on the Crown Estate.(4) If the assessment under subsection (3) determines that an application for a licence for a salmon farm—(a) may cause environmental damage, or(b) raises significant animal welfare concerns,then they must refuse the application.””

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[Lord Forsyth of Drumlean (Con)]

My Lords, it is a pleasure to move this very modest and uncontroversial amendment, which would place a duty on the Crown Estate, in carrying out its functions under the Bill, to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate. If an assessment determines that a salmon farm is causing environmental damage or significant animal welfare issues, it must revoke the licence for the farm in question. If assessments of the potential environmental impact and animal welfare standards of applications for salmon farms on the Crown Estate determine that they may cause environmental damage or raise significant animal welfare issues of concern, the Crown Estate must refuse these applications. Who could be against that, except people running salmon farms that do not meet those conditions?

I should begin by declaring an interest. I am a fisherman and my family own one week on the River Tay. I confess that I am absolutely bewitched by the glory of Atlantic salmon, which are now considered an endangered species alongside mountain gorillas and Siberian tigers. This is a really serious issue.

The Crown Estate commissioners on both sides of the border—I regret that the Bill does not cover the commissioners’ activities north of the border because of devolution, but I am sure that if England sets the standard then others will follow—have a responsibility to protect the seabed, which was owned by the Crown and has been vested in the Crown commissioners for centuries. The monarch is not involved, but the commissioners should have a clear duty to protect the environment and nurture the ocean’s wildlife, particularly given the commitment to those ideals of members of the Royal Family, in whose name they act.

I shall concentrate on the impact of farming Atlantic salmon, which has to be licensed by the Crown Estate. There are farming interests that have very high standards, but a wide variation of standards has been applied to salmon farming across the globe. All over the world, salmon farming has resulted in environmental damage to wild fish populations and threatened other species as a result of varying practices.

Salmon are often concentrated in large numbers in open-net cages and flushed with chemicals and antibiotics to combat disease and lice—lice that literally eat the fish alive if not treated. The death rate in the cages is appalling and would never be allowed for conventional farming. Some 20 to 40% of those salmon die and are dumped. Imagine what people would say if they were going past fields of cows or sheep and finding those sorts of casualty levels—there would be an outcry. But of course all this is unseen because it is below the surface of the water.

The list of various toxic chemicals that have been used to tackle lice includes organophosphates, which are highly dangerous, as we were often reminded by a former Member of this House. Other chemicals work by dissolving the bodies of the lice on the salmon, which are crustaceans. That results in the chemicals leaching into the sea and may very well explain why fishermen then start catching lobsters and crabs with half their shells dissolved. I urge anyone listening to this debate to look on YouTube at the horrific condition of salmon in some of these cages as a result of uncontrolled sea life predation. It is a horror movie that is widely available and very easily seen.

The feed that these salmon are given is fishmeal pellets, to which further chemicals are added, including in some cases dioxins and PCBs. These are all controlled, but to present this as a sustainable environmentally-friendly product stretches credibility. Other chemicals are included in the feed in order to change the colour of the flesh. If you are a supermarket, rather like when you want to paint your house, you can get a colour code and choose in which shade of orange or red you would like the fish on your shelves to appear—perhaps, as a result, misleading the customers as to what it is they are buying.

The importance of ensuring effective regulation and best practice hardly needs emphasising. The supply of pellets demands catching gargantuan quantities of small fish. Estimates vary, but those that I have seen are that between 3 and 5 kilograms of anchovies, sardines and other small pelagic fish are needed to produce just 1 kilogram of farmed salmon. That is a ratio, if you are being kind, of 3:1. To describe this as a sustainable business beggars belief. The scale is such that whole fishing communities have lost their livelihoods in west Africa, where the fish are taken by large vessels and turned into fishmeal, creating a lack of employment for local fishermen and a collapse in local economies.

There is also irreversible damage being done to the seabed as fish faeces, chemicals and uneaten food fall through the cages. All that lands on the seabed, creating a disgusting, vile brew on an industrial scale. There are vast numbers of fish. Even in a small tank there will be 20,000 salmon, with up to 90,000 in the larger cages.

Such high concentrations of salmon produce high concentrations of lice. These swarms of lice attach themselves to wild, migrating salmon, with fatal results. Escapees bring diseases to the wild population and whole rivers have been cleaned out of wild fish. Diseases include ISA—infectious salmon anaemia—and bacterial kidney disease. ISA is like AIDS for salmon but without any possible cure. There are many examples of how these viruses have been transmitted. In California, believe it or not, Atlantic salmon were being farmed using eggs transported from Norway. Those eggs contained the virus, which then took out the local population of Pacific salmon.

Some in the industry are in denial. The truth is that, when the salmon farms arrive, it seems that the wild population crashes. Examples include the loss of the sea trout runs on the Scottish west coast and the once-great salmon rivers in Norway. In British Columbia, on the Broughton archipelago, the wild pink salmon population was reduced by 80% by sea lice that came from fish farming. In Chile, ISA—that virus I have just spoken of—resulted in the collapse of the entire industry. Iceland saw huge protests, with about 1% of the population turning up to protest outside the Parliament about the possibility of fish farms being allowed to continue.

Wild fish interbreed, diluting the gene pool and reducing the ability of the progeny to make migratory journeys. This ability has been honed over hundreds of thousands of years by fish that are genetically unique to each river. They are breeding with the salmon from the farms. They are described as “Scottish salmon”. They are no more Scottish salmon than anything else. They are based on Norwegian salmon and are genetically modified to grow quickly. They are a million miles away in terms of their gene pool and structure from the fish that operate in the rivers of Scotland, each of which has a unique genetic identity and as a result is equipped to be able to run the river to spawn and to go out to sea and return after one or three years. If those fish interbreed with this alien species, the result is progeny incapable of making that journey and therefore the destruction of the population in the rivers concerned. And by the way, on the numbers escaping, in Loch Melfort in Scotland 48,000 fish escaped, dwarfing the wild population.

There is a growing realisation around the world of the environmental damage being caused. This is resulting in complete bans on fish farms. Alaska has had a ban since 1990. Argentina has introduced a ban. California has introduced a ban in state waters. In British Columbia, the plan is to phase out open-net farms by 2025 and move to closed systems.

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[The Earl of Leicester (Con)]

My Lords, I declare interests as a trustee of the Burnham Overy Harbour Trust and president of the Wells-next-the-Sea RNLI station—I say that only because they both go out to sea. I apologise that I was not here at Second Reading on 2 September; I was in the Netherlands on business also relating to the environment. Like my noble friend Lord Trenchard, I agree that the main purpose of the Bill is to allow the Crown Estate to borrow and leverage against its assets and manage them in a way becoming of the 21st century.

I am astounded that the Crown Estate is not required to undertake the same level of environmental impact assessment that we do on the mainland. Amendment 37F is incredibly straightforward. It seeks to install in law a requirement for the Crown Estate to undertake an EIA, just like any other business on the mainland planning to undertake large-scale engineering works.

In preparation for this amendment, I spoke to a number of people in my local community on the coast of North Norfolk: Andy Frary of the Wells & District Inshore Fishermen’s Association; Bob Smith, the Wells-next-the-Sea harbourmaster; Leo Hambro, founder of Tidal Transit; and Professor Jenny Gill of the School of Biological Sciences at UEA—she is not really in my community any more, because she has just moved to Fife.

As the harbourmaster and I discussed, obviously the Crown Estate wants the rent, but this EIA needs to be rather more rigorous. If we insist that the Crown Estate will be required to undertake detailed environmental impact assessments, who will monitor that? Will it be the MMO? Bob Smith’s view is that the MMO is vastly removed from the coalfaces; it gives out the licences but has inexperienced staff and does not really understand local communities.

The fishermen I spoke to, the harbourmaster and I are very much for wind farms out to sea. We have marine protected areas and, ironically, once a wind farm is established, it becomes a sort of natural marine protected area. Rock armour is placed around the base of the wind turbines to protect them from big tides and scarring, et cetera. It then quickly attracts crustaceans—lobsters and crabs—and fish and there is a 50-metre “no fishing” rule for fishermen, who cannot get close to them. It is almost a sanctuary for all these crustacea. As they develop and thrive, they move out and the fishermen can then catch them.

There was also concern that giving licences to different companies for different wind farms was rather disjointed; they should be liaising on where their cables can come together out to sea so that they hit the land in one place. That has happened to an extent in North Norfolk, where they come ashore at Weybourne.

Professor Jenny Gill looks at this from an environmental point of view. The location of these wind farms is the most important thing. We need to avoid putting them where birds are—they are easier to monitor than fish and sea mammals. The concern is bird strike out to sea. Organisations such as the BTO and the RSPB have done a lot of work on flight heights of migratory birds and sea birds in relation to rotor speed and on whether bird strike is a big threat. Bob Smith surveys boats going out from Wells-next-the-Sea; maybe they are lucky and the wind farm they have been surveying is in the right place, but they come back and say, “We saw four birds today”. That damage is not happening.

In seeking this EIA, I am encouraging the Government to involve nature conservation organisations at an early stage so that they can be part of the planning process. Professor Gill mentioned that this is getting quite complicated. Beth Scott, professor in marine ecology at Aberdeen University, has worked on how tides work in open sea and form around tidal nodes and on whether putting static turbines on the ground changes the way tides work and the spatial way in which they move.

The big thing is making the planning process more transparent and getting conservation organisations at the table. They do not want to be adversarial; they are all at the green end of the scale and want to see a lot more of this renewable energy.

I had a very interesting conversation with Leo Hambro, of Tidal Transit. He operates crew transfer boats. I talked to him about the construction phase of these wind farms. He said that there have been improvements of late, in the last few years, including air bubble rings that are placed around the piling system which let out bubbles to reduce the sonic boom—which of course carries a long way underwater—therefore, we hope, mitigating damage to mammals. However, that has happened only recently.

When trenching, that is done either through some sort of underground machine that pulls a plough through the sand or, more often, through a large ship pulling a plough which turns over a trench a metre deep, into which the big cable is placed and then sand is placed back over it. If necessary, a few more rocks are placed on top of it. However, there really ought to be an EIA to decide which route these cables take. I suspect they probably take the shortest and cheapest route, but do they avoid mussel lays? They must avoid sunken ships, but off the coast of north Norfolk, in Cromer, we have a very important chalk reef, and it is important that that is protected.

To go back to crew transfer boats, Leo Hambro has seven of them. In fact, there are 200 around the UK and 700 around the world. Some 80% of them are in the UK and Europe because of the large-scale wind farms we have out to sea. To explain, these boats go out every day and take engineers to maintain and man the wind farms. The average stat for the industry is to use 1,500 litres of red diesel a day. In reality, he said they could use 2,500 to 4,000 litres a day, particularly if they are servicing a wind farm which is 45 miles away. He has to service East Anglia ONE from Lowestoft. These boats are going at 20 knots, so they are burning a lot of diesel.

It is not the case that when they get out there they switch their engines off. They have to spend up to two hours pushing against the turbine to make a safe platform for workers, transferring kit on and off the boat, et cetera. When they are then waiting for another three hours or so for the engineers to do their work, they have to stand off, but they do not drop an anchor and switch off; they have to run their engines to maintain generators and such on-board.

Leo Hambro is operating boats out of Wick, Grimsby, Great Yarmouth and Lowestoft. An interesting point to which I hope the Minister pays attention is that one of his boats is being converted to run on pure electric. That is being done in Great Yarmouth and should be ready for May 2025, thanks to DfT UK SHORE funding. It also includes offshore and onshore charging infrastructure, which I will come to in a second. The reason I mention these boats is that, for 200 boats using 2,500 litres of red diesel a day on average, five days a week, 50 days a year, that is 125 million litres of diesel.

That takes me to exhausts. AdBlue is added to the exhaust to reduce toxins, including nitrous oxide and sulphur oxide, and diesel particulates. AdBlue is made of synthetic ammonia—

[Lord Forsyth of Drumlean (Con)]

Watch the time.

[The Earl of Leicester (Con)]

Am I not allowed 15 minutes?

[Lord Forsyth of Drumlean (Con)]

No.

[The Earl of Leicester (Con)]

My apologies—this is it. AdBlue is not made from green ammonia. All these marine exhausts omit their fumes below the water to keep the exhausts cool. AdBlue is depositing heavy metal poisoning into the sea. I will stop there.

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[Viscount Thurso (LD)]

My Lords, I will speak to this group of amendments. I was not sure which one most suited the comments I wished to make, but I think it is probably Amendment 37F in the name of the noble Earl, Lord Leicester.

At the heart of all three amendments is a question about the relationship between, on the one hand, the economic activity that we wish to undertake, quite properly, and, on the other, the environmental and natural consequences that may take place. It is about the right balance between what we seek to do economically and what we seek to protect environmentally. I will speak to that general point.

Taking my lead from the noble Lord, Lord Forsyth, I should declare my interests. I too am an angler, although I do not get to spend nearly enough time on the river, and I also happen to own the river, which is rather nice. I am chairman of the Caithness District Salmon Fishery Board, which is currently very involved with Crown Estate Scotland on various issues. I may also be—I hope—the beneficiary of a number of renewable projects. I have every sort of interest that you could possibly have; I think that they are broadly covered by my register, but I thought that I had better spell them out.

As I said, the heart of the three amendments is about seeking to ensure that, when we set out to undertake an economic activity of any kind—and this is absolutely what happens on land—we make a proper and full assessment of what the impact is likely to be on the environment that we are putting that economic activity into. That includes the flora, fauna, fungi and everything else that you might find there.

I want to give one quick example; it is in Scotland but I think it is relevant. We on the north coast have four rivers which are all in very good health. On the Thurso we electrofish every year and for some years now we have known that you cannot get any more juveniles into the river, it is in that good order. So, at a time when most of Scotland has salmon stocks that are endangered, as the noble Lord pointed out in introducing his amendment, we have the one bit of Scotland that actually is in good order and producing good salmon—and long may that last.

The west of Shetland wind farm, which is going to go ahead in the not-too-distant future, and which I support as a piece of offshore energy, may have a problem for us in the fishing world, and that is that we do not know where our smolts go. When the salmon grow in the river, they come to a point where they smoltify and they take to the sea and off they go. They are then called “smolts” or “post-smolts” and we do not actually know where they go. There has been smolt tagging and tracking in the Moray Firth which discovered that the fish that come out of various rivers in the deep south around Inverness and places like that have a tendency not to do what you would expect, which is to scoot up the coast and head past Orkney. For reasons known only to them, they leg it across to Aberdeenshire, which I always thought showed a bit of a lack of taste. The point about that is they do not go through the Beatrice wind farm and that piece of knowledge is vital in being able to look at what you may need to do to mitigate.

Similar studies on the west coast show that Irish and west coast fish tend to go due north, as you would expect, and straight off to Iceland. We just do not know where our smolts are going, so we made contact with Crown Estate Scotland, which I have to say has been incredibly helpful on this, and the chairman put me in touch with various people. As a result, I believe that there will be a smolt-tracking project which will allow us to know where our smolts are going and we will therefore know whether we have a problem, so we can look at what can be done to mitigate it if we have.

That comes back to the point I was making that, without information, you cannot make a decision on the appropriate thing to do. Crown Estate Scotland on this occasion has been extremely helpful, as I said. It wishes to make sure that it does the least harm, which is wonderful, but it seems to me correct that, in forming any legislation, it is appropriate, as we do with the nuclear industry and a whole range of other things, to state what it is that people have to provide by way of information in terms of an economic impact assessment and what they will do to mitigate the inevitable downsides that occur when you have developments of these kinds.

So I am not sure whether I am supporting anybody in particular—noble Lords will have to make up their own minds on that—but I am supporting the principle that we need knowledge and information about what may happen so that we can then make an informed choice on what mitigation is required and how much damage we are prepared to accept for the value brought by the economic activity.

[Lord Forsyth of Drumlean (Con)]

I am most grateful to the noble Viscount for giving way and I am much heartened to hear that his rivers and fish are doing very well. I just wonder what his reaction would be if someone decided they wanted to put a fish farm in the track of his migrating smolts when he knows where they are.

[Viscount Thurso (LD)]

I suspect I would be pretty horrified, given all the information that I know about it, but I have long tried to stick to a principle in your Lordships’ House to speak about what I really know about and avoid the things I do not know too much about, so I hope the noble Lord will forgive me if I do not go down that road.

To come back to my central point on the need to get information, it is about the right duty that we should ask the Crown Estate to have and then the process it should follow to deliver it. So my request to the Minister would be to look at the obvious strength of feeling on all of these points and perhaps the Government should look at what their view would be as to the right process and the right way to put it into the Bill and come back with an amendment that would achieve that and would suit the Government.

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[Lord Livermore (Lab)]

I am afraid that is not something I know about, but I am happy to write to the noble Earl.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am grateful to the Minister for that reply, which was clearly written by Treasury officials who do not get out very much. The Minister has been kind enough to say that we should indicate whether we think the existing legislative requirements and regulations are working. We have just had an excellent debate, which has made it absolutely clear that wild salmon are being destroyed, not just in this country, but elsewhere, so the answer is: it is hurting, and it is not working. A very modest requirement on the landlords, the owners of the seabed to—

[Lord Livermore (Lab)]

Just to be clear, I wanted clarification as to whether the existing legislation could work, or, in itself, could not work.

[Lord Forsyth of Drumlean (Con)]

I would be very happy for the Minister to come back with an amendment that would indicate how it could be made to work, because it is not working. It seems to me a very modest measure that would say to the Crown Estate that it has given a licence to these people, so it is therefore under a duty to make sure that they act in accordance with all regulations and in a way which protects the environment for which they have responsibility. I cannot imagine why the Minister would reject that.

In view of the very inadequate response, I am very tempted to test the opinion of the Committee, but I will not because I hope that, perhaps in further discussions with the Minister, we can get an amendment which will actually offer some degree of protection to the hundreds of thousands of fishermen who are concerned about this, to the communities who are concerned about this and to the many, many people on a cross-party basis. I cite the example of the noble Baroness, Lady Jones, and I who are united; we are linked at the hip in our determination to make this happen.

However, I would like to thank everyone who has spoken in the debate in support of not just my amendment but that of my noble friend Lord Douglas-Miller, who made a very fine speech explaining precisely why things are not working. I am grateful to my noble friends Lord Trenchard, Lord Strathclyde, Lord Moynihan and Lord Caithness, the noble Baroness, Lady Jones, of course, and the noble Earl, Lord Kinnoull—it is quite a gathering. The Minister ought to go back and think about this again, and we will table a further amendment on Report.

I am most grateful to my colleague my noble friend Lord Roborough for the support that he gave to this amendment and his careful consideration. I have to say that I am not sure the Minister’s officials have shown the same diligence in looking at what is a major problem which, if not tackled with immediacy, will see the extinction of the wild salmon in this country. That is not something that any Government would want on their record. Given the response, I beg leave to withdraw my amendment.

Amendment 37 withdrawn.

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[Lord Livermore (Lab)]

I am happy to write to the noble Earl on that point. In the meantime, I hope he will feel able to withdraw his amendment.

[Lord Forsyth of Drumlean (Con)]

The Minister has not really addressed the fundamental point made by the noble Earl, Lord Kinnoull: fish and birds do not know where the border is between Scotland and the rest of the United Kingdom, and there are common interests. All he has done is read out a list of regulations and statutes that apply to the two commissions. I think the noble Earl was asking what provisions can be made, so that the two sets of commissioners are able to operate in the interests of the United Kingdom as a whole. As a unionist, he will surely appreciate the importance of that.

[Lord Livermore (Lab)]

What I read out was a response to the amendment tabled, which asked for exactly that; that is why I read it out. The noble Lord raises profound constitutional questions which I may not be the right person to address them to.