Business of the House

Debate between Lord Forsyth of Drumlean and Baroness Noakes

Wednesday 4th September 2019 Lords Chamber

[Baroness Noakes]

I will move the amendment when I have finished what I have to say on it.

I return to the issue of prorogation. I thank my noble friend Lord Dobbs for assisting me on that, but I think the people who are getting excited about prorogation are just looking for excuses to get excited about what they do not like, which is that we are leaving the EU. It is no more than a substitute, a smokescreen, for something that, deep down, they do not really like and do not want to get on with.

[Lord Forsyth of Drumlean]

Does my noble friend not agree that, until quite recently, it was normal for us not to sit in September at all, for us to come back only after party conference and for us to add that to the period of recess? The only indication we have is that those people who are trying to frustrate the wishes of the British people were planning to extend the recess to undermine the decision taken by the British people. There is this idea that this is an abnormally long prorogation. Does she further recall that on several occasions, Members opposite, including the noble Lord, Lord Foulkes, have been complaining about the length of this Session because the number of days available to the Opposition for debates was being limited? Do we not see a certain amount of hypocrisy here?

[Baroness Noakes]

I completely agree with my noble friend: hypocrisy describes well what we see in the way that many people are referring to prorogation.

--- Later in debate ---

[Baroness Noakes]

Noble Lords should have got the understanding that we are not trying to debate the Bill but the Motion, and therefore the mechanism of achieving the Bill. We do not believe that it is right and proper to use the guillotine Motion. We believe that the House should look at that extremely carefully before ever contemplating it. To come back to my amendment—I am sure noble Lords opposite would like me to return to my amendment, although I am happy to take any other interventions—

[Lord Forsyth of Drumlean]

The noble Lord, Lord Warner, mentioned me by name and made the assertion that we were somehow preventing the consideration of the Bill from the House of Commons. Should we not take account of the fact that this Bill has been taken through the House of Commons by abandoning the normal procedures and subverting our constitution? Notwithstanding that, and given that it will come to this House, if the noble Baroness, Lady Smith, the Leader of the Opposition, would care to withdraw this outrageous guillotine Motion, there is nothing whatever to stop the House getting on with considering the Bill from the House of Commons now.

--- Later in debate ---

[The Lord Speaker]

My Lords, we really need to have a Question before us, otherwise we are having a debate at this stage. The noble Baroness has now been on her feet, or around her feet, for about 23 minutes. It is the custom to use this not for debate but to put a Question.

[Baroness Noakes]

I say to the Lord Speaker that I have not been encouraging the debate but trying to introduce and speak to my amendment. Of course, other noble Lords have wished to raise a number of other matters, and obviously I feel it necessary to let noble Lords have an opportunity to have their say on those things.

[Lord Forsyth of Drumlean]

It is worth noting that this is the first time that I can recall where the Chair has intervened in a matter such as this.

[Baroness Noakes]

Perhaps we can leave that to consider on another day. Let me go back to what I said at the outset. My amendment is about being honest about why the Motion is before us. It is not just about not achieving no deal; it is really about having no Brexit. My amendment does not affect the substance of the Motion from the noble Baroness, Lady Smith, but merely makes plain the actual motivations of those who seek to promote this extraordinary parliamentary device and to partake in the constitutional vandalism to which I referred a few moments ago. Put simply, they are designed to prevent the UK’s departure from the EU. There is no more to it than that. That is what my amendment is trying to do. I believe in calling a spade a spade. I beg to move.

Business of the House

Debate between Lord Forsyth of Drumlean and Baroness Noakes

Thursday 4th April 2019 Lords Chamber

[Baroness Noakes]

The noble Lord may well find some commonality in some of the things that each of us says about our Motion, but they are distinct Motions that deserve to be considered in their own right. That is why we have tabled them in that way. Before I leave this point, there is a serious issue that I hope the Front Bench opposite will consider, which is what will happen to the time of this House. We should consider in particular the impact on the staff of this House, who have to serve the way that this Bill is being processed.

[Lord Forsyth of Drumlean]

I very much agree with the point my noble friend made, particularly about the staff. There are two Motions from the Economic Affairs Committee that are being taken together. One relates to 50,000 people who are affected by the loan charge. Another relates to small businesses that have to submit their VAT returns digitally by tomorrow. These are big issues, and it is not my Motion but the committee’s. I say to the noble Baroness on the Front Bench that it seems that there is a consensus in the House that it is more sensible to take Committee on Monday.

[Lord Forsyth of Drumlean]

If there is not, it would be interesting to know what the arguments are. Then we could proceed in a sensible way that reflects people’s plans and also those of the staff of the House.

[Baroness Noakes]

I thank my noble friend for that intervention. He reminds me of the importance of his debate, and indeed I am speaking in that debate. It is not just about the 50,000 people who are affected by the loan charge—although it is very serious for all those individuals—but there are issues with suicides that have flowed from that loan legislation. That is why it is really important that we continue with that debate.

Queen’s Speech

Debate between Lord Forsyth of Drumlean and Baroness Noakes

Thursday 5th June 2014 Lords Chamber

[Baroness Noakes (Con)]

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

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

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

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

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

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

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

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

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

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

[Lord Forsyth of Drumlean (Con)]

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

[Baroness Noakes]

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