Housing: Section 21 Evictions

Debate between Lord Forsyth of Drumlean and Baroness Penn

Tuesday 20th February 2024 Lords Chamber

[Baroness Penn (Con)]

My Lords, the vast majority of landlords do an excellent job, but we know that a small minority use the threat of Section 21 evictions to hike up rents or intimidate tenants into not challenging completely unfit conditions. That is why we have brought forward our proposal to abolish Section 21 evictions, but we have also brought forward a widening of the grounds for possession, so that the system works for both sides in this situation.

[Lord Forsyth of Drumlean (Con)]

My Lords, why are so many landlords selling their properties and withdrawing from the market?

[Baroness Penn (Con)]

My Lords, we keep this matter closely under review. We do not see evidence of a reduction of available rental properties in the market and would be concerned if we did. We have worked very hard to make sure that these reforms work for landlords and tenants.

General Elections: Party-political Spending

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 29th November 2023 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, further to the questions from the Liberal Benches, would they not carry more credibility if their party had not taken £3.5 million from a fraudster who is a fugitive from justice? Any respectable political party would have paid that money back.

[Baroness Penn (Con)]

My Lords, all political parties should seek to abide by the rules and, if they have not, they should definitely return the money that they owe.

King’s Speech

Debate between Lord Forsyth of Drumlean and Baroness Penn

Monday 13th November 2023 Lords Chamber

[Baroness Penn (Con)]

I will be happy to write to the noble Baroness.

We have launched a nuclear revival. The Government invested to become a shareholder in Sizewell C in November 2022 and launched a capital raise process in September this year to bring in new project finance. We have launched Great British Nuclear to drive the delivery of new nuclear technologies beyond Sizewell and to develop the latest small modular reactor technologies, and last month we announced the shortlist of companies to build the new generation of small modular reactors. Beyond the initial focus on delivery, Great British Nuclear will be available to support further nuclear ambitions. It has the statutory backing and resources behind it to deliver against its long-term operational mandate.

Through the nuclear fuel fund we will invest over £35 million, match funded by industry, to develop new domestic fuel production capabilities and to supply gigawatt reactors, SMRs and AMRs. On siting, we are developing a nuclear national policy statement that will cover the policy framework for deploying new nuclear power stations beyond 2025. As an initial step, we plan to consult on our proposed approach for determining new nuclear sites by the end of this year, with our aim to finalise a consultation on the NPS next year and complete parliamentary scrutiny to enable its designation in 2025. We will launch our consultation on alternative routes to market next month and, following our review of responses, deliver a report in 2024. I hope that responds to the questions from both the noble Lord, Lord Ravensdale, and my noble friend Lady Bloomfield, who are both great advocates for the nuclear industry. Perhaps I can write to the noble Lord, Lord Jones, to respond to his specific questions about the two sites that he focused on in his contribution.

However, we also need to recognise that data published by the Climate Change Committee shows that the UK will continue to rely on oil and gas to meet its energy needs even after the UK reaches net zero in 2050. That will include the use of gas for power generation and carbon capture usage and storage. That is why we are investing in the range of domestic energy supplies that we have available, including taking steps to slow the decline in the domestic production of oil and gas, which will reduce our reliance on hostile states and back a thriving industry in the UK that supports 200,000 jobs. It is important to recognise that the UK is a rapidly declining producer of oil and gas, and new oil and gas licences will reduce the fall in UK supply to ensure vital energy security, rather than increasing it above current levels, so that the UK remains on track to meet its net-zero 2050 commitments.

I say to the noble Baroness, Lady Blake of Leeds, that we recognise the unprecedented profits made by oil and gas producers after Russia’s invasion of Ukraine. These profits represent not a return on investment but a windfall as a result of unprovoked war. It is therefore right that we introduced the energy profits levy on those windfall profits, bringing the tax rate on the profits of North Sea oil and gas producers to 75%. By 2027 the levy is expected to raise almost £26 billion, having already generated around £5.9 billion, helping us—as I said earlier—to pay half the typical household’s energy bill between October and June.

We also want to take a fair approach to decarbonising how we heat our homes, which is why we are giving people more time to make the necessary transition to heat pumps. We have increased the boiler upgrade scheme cash grants by 50%, to £7,500, to support consumers who want to make the transition now. It is one of the most generous grants in Europe.

I reassure noble Lords that, in taking into account the changes to the boiler and electric vehicles mandate and the ongoing licensing of domestic oil and gas reserves, we are confident that we can deliver our carbon budgets and capitalise on the opportunities for green growth. So I say to the many noble Lords who raised concerns in this area that we remain completely committed to our existing targets and to meeting net zero by 2050, compatible with the Paris Agreement ambition to limit global warming to 1.5 degrees.

We will continue to listen to and engage with the expertise in this House on climate and nature. I say to my noble friend Lord Lilley that our approach will be informed by evidence, pragmatism and rational debate. Our package of proposals and policies will continue to evolve to adapt to changing circumstances, to utilise technological developments and to address emerging challenges.

But we are in no doubt about the real and present threat that climate change and biodiversity loss represent to our economy and society, and there is no change in our commitment to tackling this challenge. The UK overachieved against its first and second carbon budgets, and the latest projections show that we are on track to meet the third. We are able to quantify the vast majority of carbon savings in the late 2030s, more than a decade away.

Environment and nature are the other side of the coin when it comes to tackling climate change. I reassure the right reverend Prelate the Bishop of Norwich, who spoke so eloquently of his own work on ecology, that not only have this Government done more than any other on the environment and nature—including through the landmark Environment Act—but we remain committed to going further, through our commitment to end the net loss of biodiversity in the UK by 2030. I agree with the noble Baroness, Lady Hoey, that we need to put people and rural communities at the heart of this approach. We will not achieve this transition without the support and action of farmers and land managers.

My noble friend Lady McIntosh asked about the live animal export Bill and whether there is a means to restrict live animal imports from the EU. I say to her that there has never been a significant import trade for slaughter or fattening. For example, since 2019, only 91 cattle, 14 sheep and 20 pigs have been imported for slaughter from mainland Europe—so we do not see a pressing case to take action in this area. On my noble friend’s question about border control points, I reassure her that our new border control point at Sevington, covering the short straits, opens in April. Other border control points will open around the UK, securing our biosecurity with our new border targeting operating model.

A number of noble Lords, including the right reverend Prelate the Bishop of St Edmundsbury and Ipswich, raised concerns about the impact of recent flooding on farmers. The flood recovery framework provides funding for households and businesses affected by severe flooding, and it includes several grants and business rates relief.

I say to the noble Baroness, Lady Ritchie of Downpatrick, that I know that my noble friend Lord Caine spent several hours with her in communities affected by the recent floods. In the absence of the Executive, who could have acted swiftly, the UK Government are making money available to support those affected by floods, through the reallocation of existing funding.

I say to the noble Lord, Lord Whitty, and the noble Duke, the Duke of Wellington, who, among others, raised the reform of water regulation, that we are driving the largest infrastructure investment in water company history—an estimated £60 billion of water company capital investment by 2050—to meet storm overflow discharge reduction plan targets, which were recently expanded to cover all storm overflows in England, including those discharging to coastal and estuarine waters. But I will of course pass on to Defra the proposal from the noble Duke for the future of regulation in this area.

This brings us on to the theme of what is not in the King’s Speech, and to speak to the concerns raised by the noble Baronesses, Lady Sheehan and Lady Bakewell, around the ending of peat in horticulture. It remains our policy that we intend to legislate to restrict and ultimately ban the sale of peat and peat-containing products. We appreciate that there is good support for this from the public and from within Parliament.

I turn to the noble Baroness, Lady Sheehan, and the right reverend Prelate the Bishop of St Albans, who raised the subject of disposable vapes. The Government launched a consultation on smoking and the use of vaping earlier this month. As part of it, the UK Government and the devolved Administrations are considering restrictions on the sale and supply of disposable vapes, including prohibiting the sale of these products due to the environmental impacts that they have.

The noble Lords, Lord Whitty and Lord Livermore, and many others raised the question of employment rights. I say to noble Lords that, over the past year, we have proven our commitment to supporting workers by introducing a number of new employment rights via government hand-out Bills, including a new day one right to request flexible working; a new legal right to request predictable working patterns; additional protections for pregnant women against redundancy; a right to paid leave for employees whose child is receiving neonatal care; and a right for unpaid carers to one week of additional unpaid leave. Action is being taken in that area.

Perhaps related is the question of unpaid Ministers in this House, as raised by my noble friend Lord Forsyth. I and my noble friend the Lord Privy Seal have heard my noble friend Lord Forsyth’s plea and impressed the point at the highest levels. However, as he is well aware, the number of Ministers who are paid is set out in legislation, and to improve the lot of our Ministers who are unpaid we would need to legislate. Unfortunately, there is not currently the appetite to do that.

I turn to the remarks by the noble Lord, Lord Snape, who questioned the inclusion of the Pedicabs (London) Bill in the King’s Speech—

[Lord Forsyth of Drumlean (Con)]

I am most grateful to my noble friend. I appreciate her courtesy in referring to what I said. As David Cameron is joining the House on a salary of £106,000, can we take it that his Minister of State will be paid?

[Baroness Penn (Con)]

My Lords, I could not possibly comment on that, but I join my noble friend in welcoming David Cameron to his new post. I think we will be very pleased to have someone of such talent and experience join your Lordships’ House.

To return to pedicabs, they are the only form of unregulated public transport on London’s roads. If we could deal with it through by-laws, that would be fantastic, but in fact it takes primary legislation to deal with that issue.

Many noble Lords, including the noble Lords, Lord Birt, Lord Grocott, and others, regretted the cancellation of High Speed 2 beyond Birmingham. We absolutely recognise the need better to support critical links between and within our cities and towns, but the reality is that High Speed 2 is crowding out investment to further these priorities elsewhere across the country. We have made the difficult decision not to extend High Speed 2 and, instead, to deliver the £36 billion of savings that we have allocated to Network North, an ambitious pipeline of alternative projects. The new plan will provide direct benefits to more people and more places and will do so more quickly than the previous plan for High Speed 2.

The noble Lord, Lord Birt, raised the need to upgrade the trans-Pennine rail route, which is absolutely a priority for this Government. The upgrade programme is expected to provide an extra two trains per hour and aims to reduce journey times between Manchester Victoria and Leeds from 55 to 41 minutes. The Government have committed £3 billion to date, and an announcement on future funding will be made later this year.

To the noble Lord, Lord Jones, I say that we are delivering a £1 billion upgrade to the north Wales main line, including electrification and improving journey times to better connect Wales with London and the north-west. We will now proceed with the steps necessary to implement this, including reflecting on the existing package of legislation before Parliament, necessary consultative steps, business case development, and our parliamentary and legal and fiscal duties.

Finally, the noble Baroness, Lady Bennett of Manor Castle, asked whether I stand behind the briefing that the first models of self-drive vehicles could be offered to market by 2026 if they are proved safe. The short answer, which at this time of the night will be appreciated by noble Lords, is yes.

So, this Government have a comprehensive plan to deliver a strong economy, secure energy supplies, a state-of-the-art transport sector and a safeguarded environment. From bringing down inflation and the national debt to growing the economy and tackling climate change, we are committed to making long-term decisions for the benefit of everyone across this United Kingdom. That is what the first King’s Speech in many a generation delivers, and I commend it to the House.

Bank Accounts

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 19th July 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, it is important to distinguish between any action that may have been taken on freedom of speech grounds, or on the grounds of people’s political views, and the PEP regulations, which are to do with people’s status as politically exposed persons. However, the noble Lord is right, and we have discussed this issue in the House many times: the banks have not always applied those regulations and guidance as they should. That is why we had two amendments to the Financial Services and Markets Act to take action in this area, both to amend the regulations and for the FCA to review its guidance and the banks’ adherence to it. My right honourable friend the Economic Secretary has written to the FCA again recently to reiterate the importance of that review and to say that, if any action can be taken during the conduct of that review, we will expect that to happen also.

[Lord Forsyth of Drumlean (Con)]

My Lords, I declare an interest as the chairman of a bank. I also have an account with Coutts Bank—although, by the way, I have nothing like the wealth that has been mentioned. I point out to my noble friend that Coutts Bank is owned by NatWest, and the largest shareholder in NatWest by a long way is the Government. Should the Government, as a shareholder, not say to NatWest that this kind of conduct is unacceptable? Also, what is the FCA doing? On the basis of what we read in the newspapers, Coutts Bank has been in breach of rule 4, which requires it to treat customers fairly.

[Baroness Penn (Con)]

My Lords, as my noble friend has noted, the Government have a shareholding in NatWest Group, but it is managed at arm’s length and on a commercial basis by UK Government Investments and I do think that is the right approach. My noble friend also noted the role of the FCA. He is right that it is for the FCA and other relevant independent bodies to determine whether any breach of regulatory requirements has taken place—so I will not comment on that, but I would expect them to do so.

Bank of England: Interest Rate Policy

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 12th July 2023 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, I declare my interest, as in the register, as chairman of a bank.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

My Lords, we constantly monitor the UK economy’s performance and outlook, and we acknowledge the pain that rising interest rates are causing for many households. However, setting interest rates is the responsibility of the independent Monetary Policy Committee of the Bank of England. The Government do not comment on the conduct or effectiveness of monetary policy. We will continue to support the MPC as it takes action and focuses on making the tough decisions necessary to tackle inflation.

--- Later in debate ---

[Lord Forsyth of Drumlean (Con)]

My Lords, I fully understand the need to respect the independence of the Bank of England, but that it is not the same as denying it being subject to proper accountability. The Bank of England was responsible for a huge increase in the money supply through quantitative easing—which resulted in part in the inflation that we are now experiencing—despite warnings from Andy Haldane, its chief economist at that time, that that would result in inflation. Andy Haldane is now suggesting that there may be an overreaction and overcorrection in putting interest rates up to the extent that they are being. This will cause misery to millions of people. The Bank of England should surely be accountable for this.

[Baroness Penn (Con)]

My Lords, I agree with my noble friend that the Bank of England should be and, indeed, is accountable for the decisions that it makes, but it is not for government to comment on the conduct or effectiveness of monetary policy. He is right that high levels of inflation and, therefore, high interest rates, are causing pain. That is why the Government are taking action to support people at this difficult time, including the mortgage charter, agreed by my right honourable friend the Chancellor, that covers around 90% of the market and gives people options when they are facing higher mortgage rates to make sure that their payments continue to be affordable.

Inheritance Tax: Cohabiting Siblings

Debate between Lord Forsyth of Drumlean and Baroness Penn

Tuesday 20th June 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, I do not think that I am not addressing the issue of principle; I am just disagreeing with some noble Lords on the conclusions of that question. The Government’s view is that marriage and civil partnership relationships necessarily entail particular legal and financial obligations to one another for the parties concerned. We think it is right that those obligations are reflected in our inheritance tax system. When it comes to the impact of inheritance tax, however, on people in the circumstances to which the noble Baroness referred, there are several measures in place to ensure that those impacts are minimised. Those include the existence of the nil-rate band, which means that the vast majority of people in this country—fewer than 6% of estates this year are due to fall subject to inheritance tax—do not pay inheritance tax. For those who are affected, there are measures in place to ensure the smoothing of those obligations when they find themselves in circumstances that we have heard about today.

[Lord Forsyth of Drumlean (Con)]

My Lords, following up on that last point, is not the problem that the only people who pay inheritance tax are the middle classes, or people whose only asset is the roof above their heads, whereas very rich people are able to buy farmland and make all kinds of arrangements to avoid inheritance tax? If the Treasury is keen on raising extra revenue, why not abolish inheritance tax and introduce capital gains tax on death, which would provide far more revenue and be far fairer to all concerned?

Financial Services and Markets Bill

Debate between Lord Forsyth of Drumlean and Baroness Penn

Report stage
Tuesday 13th June 2023 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My noble friend has made valid arguments for not putting the amendment, as drafted, in the Bill. However, she and her very clever officials could get around this by tabling an amendment at Third Reading to that effect.

[Baroness Penn (Con)]

I am afraid that I am not in a position to commit to my noble friend’s suggestion. I hope that the reassurance he has heard from all Front-Benchers on this issue will persuade him not to press his amendment at this time.

[Lord Forsyth of Drumlean (Con)]

My Lords, once again, my noble friend has gone beyond what we might expect in responding to the debate, so it is a pleasure to beg leave to withdraw my amendment.

Financial Services and Markets Bill

Debate between Lord Forsyth of Drumlean and Baroness Penn

Report stage
Thursday 8th June 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, the amendments in this group focus on further formalising the role of parliamentary scrutiny of the regulators. The Government agree with noble Lords that effective parliamentary scrutiny, in particular through parliamentary committees, has a critical role to play in improving the quality of regulation, as the noble Baroness, Lady Kramer, said, and the performance of the regulators overall.

The Bill, through Clauses 36 and 47 and Schedule 7, seeks to ensure that the Treasury Select Committee has the information it needs to fulfil its role, by requiring the regulator to notify the TSC when publishing any relevant consultations. However, the Government have listened to the case made by noble Lords that the important role of this House was not adequately reflected by that approach. We have therefore tabled a series of amendments which will require the regulators to also notify the relevant Lords committee when they publish a consultation. These amendments will ensure parity between arrangements for the Commons and the Lords. They also provide that, if a Joint Committee is set up in future, the regulators will be required to notify it in the same way.

I am glad that my noble friend Lord Forsyth feels that these amendments fulfil the aims of his own; that is just as well, as his amendments in Committee and on Report formed the basis for the Government’s approach—that is no coincidence. I am grateful to him for the work that he has put in on this issue and for the time that he has taken to discuss these matters with the Government.

I am also grateful to my noble friend Lord Bridges and the noble Lord, Lord Hollick, for their engagement as the chairs of the current committees in this House that look at the work of the financial services regulators. When I spoke with them, they explained how the EAC and the IRC currently split some responsibility for financial services policy, an example of which was their recent work on LDI, where the EAC focused on the work of the Bank of England and the PRA and the IRC focused on that of the FCA. The Government’s amendments would allow for the two committees to continue with that approach if they wished to do so and for a different Lords committee to receive notifications of consultations from the FCA and the PRA. That structure would be for Parliament to decide.

I shall now pick up on the concern from noble Lords about having multiple committees looking at the same issues or the work of the same regulators. As I have said, the structure is a matter for Parliament, but currently we have the TSC in the Commons, and the Economic Affairs and the Industry and Regulators Committees in the Lords, which at the moment look at various aspects of the regulators’ work without duplicating each other or creating unnecessary burdens. Given the scale of powers for the regulators being established in this Bill, there will be more than sufficient work to go round different committees, and they have already proven themselves able to co-ordinate their work so that it is not duplicative.

We have heard, given the scale of the task before us, that there is concern about the resource made available to those committees. Committee structures and their resourcing will remain a matter for Parliament to decide and I have noted that noble Lords agree that that is the right approach. However, the Government recognise that the new model for financial services regulation will require a step change in this House’s scrutiny of the regulators and agree there must be suitable resource in place to support this. The Government will work with the usual channels and the House authorities in the appropriate way.

The Government have also heard concerns about the feedback loop when Parliament engages with regulatory proposals. There can often be a significant period of time between an initial consultation and the Bill’s existing provisions regarding the regulators’ engagement with parliamentary committees, and final rules being published. In particular, the Government recognise amendments tabled by the noble Baroness, Lady Bowles, in Grand Committee, seeking to require the regulators to explain how parliamentary recommendations have been considered. The Government have therefore tabled Amendments 61 to 63, which require the regulators, when publishing their final rules, to explain how they have considered representations from parliamentary committees. This will ensure that the regulators provide a public explanation of how the views of parliamentary committees have been considered at the point when rules are made. This complements the existing requirement in Clauses 36 and 47, and Schedule 7, for the regulators to respond in writing to the chairs of committees that have made representations. This will ensure not only that regulators appropriately consider Parliament’s representations but that they set out publicly how they have done so.

The debates so far have shown that there is no single silver bullet to solve the problem of accountability. However, the Government are committed to creating an effective, overarching ecosystem in which the various different actors all play their roles in holding the independent regulators to account, ensuring high-quality financial services regulation in the UK. I am therefore grateful that my noble friend Lord Forsyth has said that he will withdraw his amendments, and I intend to move the Government’s amendments, based on those amendments, when they are reached.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am most grateful to my noble friend the Minister for the way in which she has responded to this. I entirely agree with her point, as a former chairman of the Economic Affairs Committee, on the way in which we have worked with the Treasury Select Committee. I agree also with the noble Lord, Lord Eatwell, that it is carefully drafted and—who knows?—it may very well lead to both Houses deciding to have a Joint Committee, which would certainly be the best possible option. But that is obviously not a matter for me and I beg leave to withdraw my amendment.

Tourist Spending: VAT

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 24th May 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, I reassure the noble Baroness that the Government continue to monitor the evidence around VAT shopping, as we do keep all taxes under review. As to the process the Government went through in making their decision, I reassure the noble Baroness that we engaged with a wide variety of stakeholders on the removal of the VAT scheme, including Border Force, retailers, VAT refund providers, refund agents, airport operators and shoppers. That research took place in parallel with a consultation which produced a range of views. So the Government did make every effort to look at the evidence available when reaching this decision, including their analysis of the costs of the policy.

[Lord Forsyth of Drumlean (Con)]

My Lords, would my noble friend welcome the conversion of the Liberal Democrats to the idea that cutting taxes results in more revenue? Could she explain to them that, at the moment, we need that revenue because of the level of borrowing the Government have?

[Baroness Penn (Con)]

I absolutely agree with my noble friend that levels of government borrowing are high because of the impact of both the Covid pandemic and the war in Ukraine. One of the reasons that levels of debt are high is that we have provided strong support to sectors such as tourism during the difficult years of Covid, and we are also providing strong support to them to recover from the pandemic and build back visitor numbers.

Arrivals Duty Free at UK Airports

Debate between Lord Forsyth of Drumlean and Baroness Penn

Thursday 30th March 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, I will say that it shows that the Scottish Government’s priorities lie in the wrong place, instead of seeking to address the priorities of the people of Scotland, whether it is tourism or improving their health and education systems. I think the people of Scotland would welcome a greater focus on those issues and less of a focus on something on which we recently had a referendum that settled the issue.

[Lord Forsyth of Drumlean (Con)]

My Lords, further to the answer that my noble friend has given, surely this is a question of the propriety of the use of public funds. The Scottish Government are involved in spending public money on a matter for which they have no rights. If these people were in local government, they would be being surcharged.

Financial Services and Markets Bill

Debate between Lord Forsyth of Drumlean and Baroness Penn

Committee stage
Tuesday 21st March 2023 Grand Committee

[Baroness Penn (Con)]

My Lords, the Government have been transparent about their plans to enable the use of digital identities in the private sector, including in financial services, and we are committed to ensuring the scalability, flexibility and inclusivity of secure digital identities.

The Government initiated their digital identity programme following industry calls for the Government to take the lead in developing common standards for digital identity across the whole economy. We continue to believe that a whole-economy approach is the right way forward, and we are working with stakeholders to deliver this at pace.

For example, the UK digital identity and attributes trust framework has already enabled right to work, right to rent and criminal record-checking processes to be digitised, making these checks quicker and more secure. In addition, measures in the Government’s Data Protection and Digital Information (No. 2) Bill, which was introduced to Parliament on 8 March, go further by securing the reliability of digital identity services across the economy for those businesses and consumers who wish to use them. The Government also recognise that greater clarity with respect to how digital identity services certified against the digital identity and attributes trust framework support requirements under the Money Laundering Regulations will be key for market uptake. As set out in the Government’s 2022 Money Laundering Regulations review response, we have committed to considering this too.

I hope that I have reassured my noble friend Lord Holmes that the Government remain committed to enabling the use of secure, reusable digital identity products across the UK economy and that Amendment 218 is therefore not necessary.

Turning to Amendments 220 and 221, also from my noble friend, the Centre for Data Ethics and Innovation guidance has not been designed to form the basis of regulatory requirements relevant to financial services and is unlikely to address AI risks specific to that sector. Appropriating CDEI guidance for the basis of regulation that is aimed at the wider governance of AI through non-regulatory tools and industry-led techniques is therefore likely to lead to unintended consequences; however, I appreciate my noble friend’s point that he used the CDEI for illustrative purposes.

I assure my noble friend that the newly created Department for Science, Innovation and Technology is already developing a cross-economy, pro-innovation framework for AI regulation, underpinned by a number of cross-sectoral principles to strengthen the current patchwork approach to regulating AI directly. Further proposals for the new regulatory framework will be published in a White Paper in the coming weeks. Through our proposals for a new AI regulatory framework, we are building the foundations for an adaptable approach that can be adjusted to respond quickly to emerging developments. The vast majority of industry stakeholders we have engaged with agree that this strikes the right balance between supporting innovation in AI while addressing the risks.

Furthermore, the FCA, the PRA and the Bank of England recently published a discussion paper on how regulation can support the safe and responsible adoption of AI in financial services. Therefore, to avoid unintended complications with the use of digital identities and artificial intelligence in the financial services sector, I hope that my noble friend will not press his amendments.

Finally, I turn to the important topic of central bank digital currencies and Amendments 241F and 241FD, both ably introduced by my noble friend Lord Forsyth. The Government have been clear that they consider that Parliament will have a vital role to play in the future of any digital pound. As I set out to my noble friend Lord Bridges in a previous debate in the Chamber, when we discussed the findings of the report to which my noble friend referred, the Government expect to fully engage Parliament, including through any possible legislation, in an open and transparent manner to ensure that there is full and proper scrutiny of any proposals over the coming years. As the joint Treasury and Bank of England consultation paper published on 7 February set out, the legal basis for the digital pound will be determined alongside consideration of its design; this is the subject of ongoing work.

[Lord Forsyth of Drumlean (Con)]

Could my noble friend the Minister just define what “vital” means? Does it mean primary legislation?

[Baroness Penn (Con)]

As I said, the approach we take will be determined alongside the consideration of any design of a central bank digital currency. The decision to move ahead with a CBDC has not yet been taken; however, we do believe that it is likely to be needed in future. Although it is too early to commit to build the infrastructure for one, we are convinced that further preparatory work is justified. Therefore, that definition will become clearer as the design of the approach also becomes clearer—but the commitment at the outset to parliamentary engagement is there.

--- Later in debate ---

[Baroness Penn (Con)]

My Lords, I was explaining why we think that the UK may need a digital pound in future. The central point is that we want central bank money, which is currently available to the public only as cash, to remain as useful and accessible as ever in an ever more digitalised economy.

I was going to address my noble friend Lord Holmes’s question about whether the work we are taking forward is focused on a wholesale or retail central bank currency. The proposal being considered is potentially to introduce a retail CBDC at some point in the future. With regard to a wholesale CBDC, banks have access to electronic central bank money in the form of reserves; we are open to exploring innovative ways in which wholesale firms could use reserves. There is a programme for reform under way on electronic central bank money in the form of reserves that will bring similar benefits to those that we see for CBDCs in the retail space.

[Lord Forsyth of Drumlean (Con)]

Is there going to be a limit on the amount that people can hold in this retail central bank digital currency? Does the Minister accept that, if there is no limit, that will have major implications for financial stability?

[Baroness Penn (Con)]

These are some of the questions that we want to consider through the consultation that is currently open and any further work. That consultation recognises the financial stability implications of developing such a proposal; we will want to consider them as we take this work forward.

Theatre Tax Relief

Debate between Lord Forsyth of Drumlean and Baroness Penn

Thursday 9th March 2023 Lords Chamber

[Baroness Penn (Con)]

I absolutely agree with the noble Lord about the contribution made by the creative industries to our economy and society. That is why the Government put such world-leading support into them. I am sure that we welcome the cross-party approach of Labour supporting the Government in this area.

[Lord Forsyth of Drumlean (Con)]

My Lords, is not my noble friend much encouraged by the great consensus that we have seen this morning that cutting taxes results in increased investment and growth?

[Baroness Penn (Con)]

I am greatly encouraged by the support that this House has offered to the creative industries sector. When we look at tax rates, we need to look at individual sectors and the individual response that those sectors have. I can reassure my noble friend that we are committed to having a competitive tax regime that stimulates growth and attracts businesses to the UK.

Financial Services and Markets Bill

Debate between Lord Forsyth of Drumlean and Baroness Penn

Committee stage
Wednesday 1st March 2023 Grand Committee

[Lord Forsyth of Drumlean (Con)]

My Lords, in my day, although it may have changed, when the Government issued a consultation document, it was basically to get agreement to what they wanted to do. In the case of the OBR, I remember the then Chancellor, George Osborne, arguing that the OBR was necessary in order that people could see that the Government were being honest and were subject to some kind of scrutiny, and that it would provide independent information that would enable Parliament and others to take a view.

I am trying to put this delicately, but my noble friend’s argument seems to be that the Treasury set out a consultation and reached an agreement so it is in the Bill. But the view that is coming out very clearly is that, for Parliament or anyone else to effectively hold the Treasury and the regulators to account, it is necessary to have an independent source of information. My noble friend is just reading out what we already know is in the Bill, but there is pretty well universal acceptance that that does not actually provide for sufficient accountability. Could she deal with that point? Why on earth would she be against something that would enable more transparency and more effective scrutiny?

[Baroness Penn (Con)]

I am afraid I am going to have to disagree with my noble friend’s point about consultation. I have spent too long in this Chamber, even in a limited time, being on the receiving end of scrutiny from noble Lords about the lack of consultation. The proposals in the Bill have gone through two rounds of public consultation. My noble friend may not see the value in public consultation, but that is not something that has been fed back to me in my dealings in other policy areas.

[Lord Forsyth of Drumlean (Con)]

Forgive me, but I did not say anything of the sort. Of course I can see the value in consultation. What I do not see the value in is consultation that then concludes that the Government should do what they wanted to do in the first place.

Financial Services and Markets Bill

Debate between Lord Forsyth of Drumlean and Baroness Penn

Committee stage
Monday 20th February 2023 Grand Committee

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

My Lords, the Government are keenly aware of the interest in Parliament in the appropriate committee structures for scrutinising the regulation of financial services and will listen to the debate that we have on all the different groups very carefully. However, as noble Lords have noted, and I note myself, Parliament is of course responsible for determining the best structure to scrutinise the regulators.

As other noble Lords have also recognised, this debate has been had across different parts of Parliament over previous years, including during the Government’s consultation on our proposals. As my noble friend Lady Noakes said, the Treasury Select Committee considered this question in its report of June 2022, Future Parliamentary Scrutiny of Financial Services Regulations. That resulted in the establishment of a new sub-committee for scrutiny of financial services regulations. I also note that the All-Party Parliamentary Group on Financial Markets and Services published a report in February 2021, which recommended the creation of a Joint Committee.

I note that my noble friend modelled her amendment on the provisions relating to Parliament’s Intelligence and Security Committee, which is a Joint Committee set up on a statutory basis. Let me say to the Committee that the requirements applying to the ISC are quite unique, given the extreme sensitivities concerning the operation of the intelligence services. A large part of the provisions related to the ISC are about limiting its scrutiny powers to ensure that the intelligence services can operate and that the information they require to do their jobs is appropriately protected in those circumstances. The financial services regulators do not handle such sensitive information so the Government consider that a similar approach in statute is unlikely to be required in this instance. As I have said, it is not for the Government to impose an approach on Parliament.

I recognise the contributions from noble Lords saying that, by amending the Bill to create a Joint Committee, Parliament would be expressing its view. However, the point I would make in relation to that is that Parliament has the capability to set up Joint Committees without the involvement of government; they are usually established by Standing Orders in both Houses. This process does not require legislation. Introducing a Joint Committee at this stage of the Bill would be a significant change to the structure of the scrutiny of financial services. There is already a mechanism by which Parliament can establish such a Joint Committee should it wish to do so. Through this Bill, the Government intend to ensure that Parliament has the information it needs to conduct effective scrutiny of regulators, whatever structure it determines to be correct for doing so.

Clauses 36 and 46 and Schedule 7 require the regulators to notify the Treasury Select Committee of their consultations and draw the committee’s attention to specific sections, including those that deal with how the proposals advance the regulators’ objectives and how they have had regard to the regulatory principles. Those references to the TSC are in line with wider requirements elsewhere in existing financial services legislation, which establish that committee as the main committee for financial services matters. However, I note the wide range of sincerely held views on this matter and the fact that a number of different committees have previously been involved in scrutinising the wide breadth of financial services regulation.

[Lord Forsyth of Drumlean (Con)]

I am trying to follow the logic of my noble friend’s argument. If her argument is that Parliament can set up committees so there is no need for legislation, why is it necessary to reference the Treasury Select Committee in the legislation?

[Baroness Penn (Con)]

In the legislation, the Government are seeking to formalise and make explicit some of the ways in which committees can have their work facilitated. I recognise that this Bill refers to the Treasury Select Committee. That is the case in existing financial services legislation; for example, Schedule 1ZA to FSMA requires that the person appointed as the CEO of the FCA must appear before the TSC before their term can begin. Also, when appointing independent reviews of ring-fencing and proprietary trading, as required by Sections 8 and 10 of the Financial Services (Banking Reform) Act 2013, the Treasury was required to consult the TSC.

Wales: Additional Financial Resources

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 18th January 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, I believe that the fiscal framework agreed in 2016 does that, and I am sure the noble Lord will welcome the fact that the latest spending review set the largest annual block grant in real terms of any spending review since the devolution Act of 1998.

[Lord Forsyth of Drumlean (Con)]

My Lords, has the time not come to get rid of the Barnett formula and to fund the devolved Administrations on the basis of need, which is how they distribute the money themselves? I know my noble friend is very busy, but could she read the report of the Select Committee of this House, which was initiated by the late Lord Barnett, which showed clearly that Wales lost out as a result? I say that as a Scot, and Scotland benefits in addition to parts of the north of England, Wales and other devolved parts of the United Kingdom.

[Baroness Penn (Con)]

My Lords, I am aware of the views of Lord Barnett, to whom the formula’s name relates. The point my noble friend makes about needs is exactly what we tried to build into the fiscal framework in 2016. There was an assessment of additional needs in Wales. It said that, on a needs basis, it should be at least 15 % more than the equivalent in the UK. That was recommended by the independent Holtham commission, and that is something that the UK is taking forward.

Money Laundering Regulations: Politically Exposed Persons

Debate between Lord Forsyth of Drumlean and Baroness Penn

Monday 28th November 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, there is a difference between looking at the FCA guidance and whether it is being properly adhered to and whether that could help solve the problem that noble Lords are talking about. We have made continuous efforts to look at that but, given the wider sentiment we have heard in this House, we also want to look at whether we can make a more substantive change to how domestic PEPs are regulated. That is a wider piece of work that could have unintended consequences, so we need to look at that carefully.

[Lord Forsyth of Drumlean (Con)]

My Lords, what was the point of us leaving the European Union to take back control if Ministers cannot direct the FCA to show a bit of common sense? I declare my interest as chairman of a bank.

[Baroness Penn (Con)]

My Lords, the standards for our anti-money laundering regulations come from the FATF, which defines an international approach. My noble friend is right that we have the opportunity, having left the EU, to adapt the anti-money laundering regulations to make them more proportionate and more effective. We have already done that in a number of areas, and the piece of work we are going to do, looking at the evidence around the risk of domestic PEPs, is a further area in which we can do some work.

Defined Benefit Pension Funds

Debate between Lord Forsyth of Drumlean and Baroness Penn

Tuesday 1st November 2022 Lords Chamber

[Baroness Penn (Con)]

If that was the impression the noble Baroness had of my Answer, it was not the one I meant to leave with noble Lords. The regulators, including the Financial Policy Committee, the Pensions Regulator and others, will want to look at and reflect on the lessons that can be learned from the events of recent weeks. In pointing to the Commons committee’s work, I merely sought to address the noble Lord’s point about a different or more independent set of eyes also looking at this.

[Lord Forsyth of Drumlean (Con)]

My Lords, can it be true that the Bank of England’s own pension fund had more than 80% of its assets invested in these highly risky derivative products, which depended on keeping interest rates down? Given that the Bank of England intervened to buy bonds to keep interest rates down, was there not a conflict of interest there? Also, was it not apparent to everyone, if these are the facts, that the system of regulation has failed—failed absolutely —and needs to be looked at again?

[Baroness Penn (Con)]

My Lords, I do not know how the Bank of England’s own pension scheme is invested. As my noble friend pointed out, the particular issue around these schemes was liquidity; the Bank of England stepped in to address that issue, which I believe has now been resolved. None the less, we will look at the lessons that can be learned. I pointed to an exercise undertaken in 2018 to stress-test UK pension schemes’ resilience, but the movements we saw in the past few weeks went beyond the bounds of those scenarios. We should reflect on that and see whether anything needs to change as a result.

Financial Inclusion

Debate between Lord Forsyth of Drumlean and Baroness Penn

Monday 11th July 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, pre-payment meter customers are covered by the price cap, so they receive protection from that, but they pay a higher rate, which Ofgem believes is necessary to reflect higher operational costs and risks. However, a robust set of rules is in place to protect pre-payment meter customers, ensuring that, if suppliers identify that they are in a vulnerable situation, including where they are self-connecting or self-rationing their supply, they must be offered additional support credit. In doing so, suppliers must also consider people’s ability to pay back that credit. So a robust set of support is available to people in that situation.

[Lord Forsyth of Drumlean (Con)]

My Lords, although the Government have done well in reducing the taper rate, is it not still the case that people in work on universal credit are paying an effective marginal tax rate of 55%, which is 10% more than the highest-paid people in the country? So, while we are talking about tax cuts, as we appear to be doing in the Conservative Party at the moment, would it not be a good idea to reduce the effective marginal tax rate of those who are poorest in order to encourage people back into work and to encourage those who are in work to value their contribution to society?

[Baroness Penn (Con)]

I agree with my noble friend’s sentiments. As he pointed out, a cut to the taper rate of universal credit is essentially a tax cut for those on the lowest wages, and it makes sure that the incentives are aligned for them to take on more work and bring home more money. So I totally agree with him, but I cannot speculate on any future policies in that direction.

Working from Home

Debate between Lord Forsyth of Drumlean and Baroness Penn

Monday 4th July 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, the Government will accept some of those benefits set out by the noble Lord. However, we also need to think about some of the other effects—for example, evidence also indicates lowered innovation and knowledge-sharing in the workplace due to remote working. So the Government support the ability to work flexibly and support businesses in finding the right approach for them. I think there are many benefits to home or remote working, but those need to be balanced against some of the negatives we can also see.

[Lord Forsyth of Drumlean (Con)]

Will my noble friend the Minister think for a moment about those people who do not work from home but who use their own cars for work purposes? Given that petrol has now reached £10 per gallon, should the Treasury not think about changing the 45p allowance, which barely covers the cost of petrol, let alone other costs? At that level, people have to pay tax and national insurance on any remuneration they receive back from their employer for using their own vehicles.

[Baroness Penn (Con)]

My noble friend is absolutely right that, even at its peak, only 50% of people reported working remotely, so we must remember the other half of people who were not doing any remote working at all during the pandemic—and even less so now. I understand his concern about fuel costs; this is why my right honourable friend the Chancellor gave the biggest cut to fuel duty that we have seen in a number of decades in the recent Spring Statement.

Economy Update

Debate between Lord Forsyth of Drumlean and Baroness Penn

Thursday 26th May 2022 Lords Chamber

[Baroness Penn (Con)]

I am not sure that I picked up the noble Lord’s questions there, but he did talk about the potential inflationary impact of this announcement and asked what the Government are doing to tackle inflation. I can say to all noble Lords that we have three tools available to us to combat and reduce inflation and we are using them all. First, we have strong, independent monetary policy, overseen by the Bank of England. Secondly, we have responsible fiscal policy from this Government. I am cognisant of the potential inflationary impacts of announcements such as these and that is why we are ensuring that the support we are putting in place is targeted, timely and time-limited. We will continue to take difficult fiscal decisions to ensure that we remain within our fiscal rules. Thirdly, we are taking an activist approach to supply-side reforms, which will increase our productive capacity, ease inflationary pressures and raise our long-term growth potential. I do not think the list of further taxes that the noble Lord said he wanted to apply would encourage more investment in our economy, which is what we need to see the growth that we all want and to support the record lows in, for example, unemployment that this Government have presided over.

[Lord Forsyth of Drumlean (Con)]

My Lords, could my noble friend help me by explaining something? During the Covid lockdown, when there was the furlough scheme and many employers kept people in employment, the Chancellor thought it was appropriate to increase universal credit by £20 a week, which is £1,000 of additional income for some of the poorest people in our country. If that was thought appropriate then, why is it not thought appropriate now, when those people are facing—in the words of the Governor of the Bank of England—“apocalyptic” increases in prices? What is the logic of the Chancellor’s position?

[Baroness Penn (Con)]

My Lords, the increase in universal credit was always brought forward as a temporary measure as, through the restrictions needed to deal with the Covid pandemic, large parts of our economy were effectively shut down. We face a different set of challenges now. They are severe for many households, but they are to do with inflationary pressures and a large part of that is driven by energy prices, so we are targeting our response towards dealing with that. Under our plans, the lowest-income households will receive around £1,200, which is roughly equivalent to the expected increase in costs for the energy price cap rise. Some people benefited from a UC uprating or temporary uplift, but pensioners who struggle with energy bills did not benefit under that system. People with disabilities, who can face higher energy costs, did not necessarily benefit from that UC uplift. This is a targeted set of measures to deal with a specific set of problems and it should be welcomed.

Queen’s Speech

Debate between Lord Forsyth of Drumlean and Baroness Penn

Monday 16th May 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, I am grateful for the privilege of opening today’s debate on the Motion for an humble Address. Today, I shall outline the Government’s plans to support the economy, energy and the environment.

Covid-19 was an unprecedented crisis and, in response, this Government took unprecedented action, providing nearly £400 billion to protect lives and livelihoods from the pandemic’s economic impact. It is thanks to this decisive response that the economy was able to recover faster than expected. That resurgence was accompanied by a labour market that outperformed expectations, with unemployment returning to below its pre-pandemic rate. None the less, there are significant challenges ahead.

Pressure on global supply chains and elevated energy prices, as the world unlocks from the Covid-19 pandemic, had meant that the cost of living was already on the rise. And now the unprovoked invasion of Ukraine has further driven up energy prices for households. The Government are acutely aware of the pressure that people face right now. That is why we are providing support worth over £22 billion in this financial year to help people through these difficult times.

We are also mindful of our responsibility to secure the economy over the longer term. Our spending on public debt interest repayments has reached the point where it now exceeds the budget for schools. Clearly, this is unsustainable. That is why we have taken tough and responsible decisions to repair public finances and return them to a tenable path. As a result, our debt is now on track to fall in the next few years, freeing up greater fiscal firepower to respond to future shocks and build economic security. A responsible approach to our national debt is just one element of how this Government are safeguarding our future economic health and our national well-being.

The legislation we are debating today will also play a significant part in achieving those goals. These measures will support key sectors such as food and farming and financial services. They will shield people from rising energy prices and consumer rip-offs, while preventing workers paying the price of business failure. They will also protect the environment and speed our transition to a net-zero economy.

I turn first to the financial services and markets Bill. The UK’s financial services sector is one of the most open, innovative and dynamic in the world. It is not just an industry in its own right but the engine of our economy. It employs over 2.3 million people throughout the country and contributes £75 billion in tax revenue. It is therefore right that we act to secure our position as a global leader for the sector over the long term. Our departure from the European Union means that there is now an opportunity to better tailor our legislation to better suit our markets. In his speech at Mansion House last year, my right honourable friend the Chancellor set out our ambitious visions for an open, green and technologically advanced financial services sector that is globally competitive and acts in the interests of communities and citizens, creating jobs, supporting businesses and powering growth across all of the UK.

This Bill represents further progress towards making this vision for financial services a reality. It will build on the Financial Services Act 2021 and will ensure that the sector continues to deliver for individuals and businesses across the country. In addition, the Bill will help the country seize the full opportunities presented by Brexit by repealing retained EU law and establishing a coherent, agile and internationally respected approach to financial services regulation that is specifically designed for the UK. This includes giving our financial services regulators new objectives to ensure greater focus on growth and international competitiveness. We will also reform the rules that regulate our capital markets to remove red tape and promote investment.

The Bill will fulfil important priorities for the Government by safeguarding our robust regulatory standards, which are a cornerstone of our attractiveness to investors and maintain the stability and soundness of our financial markets. In addition, it will include significant measures to promote consumer protection, helping to protect the easy access to cash on which so many people rely, boosting consumer confidence by including additional protections for those investing or using financial products, and providing greater support for scam victims.

Not only has the UK been a financial services hub for centuries, it has also long been known for its pioneering infrastructure. Our railway network, Shropshire’s Iron Bridge and the Severn crossings are all illustrations of how UK engineers shaped this country. But, as my right honourable friend the Prime Minister has said previously, for too long now Governments of every stripe have failed to invest enough in infrastructure. If we are to deal with two of the biggest challenges facing this country—the need to level up the country and to cut our carbon dependence—we must address this challenge head on. That is why last year we launched the UK Infrastructure Bank. Thanks to £22 billion of capacity, the bank will be able to support infrastructure investment and the levelling up of the whole UK. In turn, this will boost private sector confidence, unlocking a further £18 billion of investment.

The UK Infrastructure Bank Bill will finalise the bank’s set-up and ensure that it is a long-lasting institution. It will set out its objectives—to tackle climate change and support regional and local economic growth—in legislation, as well as giving the bank a full range of spending and lending powers, so it can benefit communities across the country and help the UK achieve its net-zero goals.

As well as strengthening investment, this Queen’s Speech took steps towards ensuring that investors, employees and consumers can be confident that they have the full facts about businesses’ financial health. When big companies go bust, the impact can be far reaching, and all too often it is workers and taxpayers who pay the price. Recent company collapses such as Thomas Cook, Carillion and BHS have underlined the need for proportionate and targeted audit, corporate governance and insolvency reforms. The draft audit, corporate governance and insolvency Bill will set out measures to rebuild trust in this area. Ultimately, the Bill will seek to safeguard jobs, reduce the economic and social harm from sudden company failures and reinforce the UK’s reputation as a great place to invest. It will include measures to boost resilience, competition and choice in the audit market, and it will establish a strengthened regulator and ways of holding business directors to account. These are complex and significant measures and it is critical that we get this reform right. That is why the Government are bringing forward this legislation in draft.

I turn to economic crime, which costs the UK an estimated £8.4 billion a year. We took recent urgent action with the Economic Crime (Transparency and Enforcement) Act, and now, as we committed to then, we are going further by bringing forward the economic crime and corporate transparency Bill. The Bill will strengthen the UK’s reputation as a place where legitimate business can thrive, and it will ensure that there is no place to hide dirty money. The Bill will include significant reforms to strengthen the role of Companies House, reforms to prevent the abuse of limited partnerships, new powers to seize crypto assets from criminals and reforms to give businesses greater confidence to share information on suspected money laundering.

Consumers also need to be confident that they will be supported if their relationship with a firm goes wrong. Already, the UK boasts a strong set of consumer rights, which are enforced through multiple routes. None the less, problems with purchases cost consumers £23 billion annually and there is evidence that competitive pressure among firms may have been stronger in the past than it is today. Now that we have left the EU, we can take clear action to address this problem by tailoring our legislation to support both consumers and businesses in a more agile way, while maintaining our high standards. The draft digital markets, competition and consumer legislation will boost consumers’ rights, strengthen enforcement and promote more competition in UK markets. This legislation will tackle bad business practices such as subscription traps and fake reviews, which cost consumers money. It will also clamp down on cartels and other activities that stifle competition. The Bill will also give the Competition and Markets Authority more powers to crack down on bad businesses ripping off consumers. In short, this legislation will help consumers keep more of their hard-earned cash.

When it comes to the cost of living, rising energy prices are being felt by households up and down the country. The Government are acting, with support to consumers worth over £9 billion and, importantly, a long-term plan for our energy security. Our recently published British Energy Security Strategy will help tackle rising bills and, alongside the Prime Minister’s 10-point plan and the Net Zero Strategy, drive £100 billion of private sector investment into new British industries, supporting the creation of around 480,000 clean energy jobs by 2030.

The energy Bill will deliver even more for UK families and businesses as we seek to transition to a cleaner, more affordable and more secure energy system. It will ensure that consumers remain protected by the price cap and that heat networks are regulated, helping to lift households out of fuel poverty. This landmark Bill will also fire the starting gun on new low-carbon technologies, such as hydrogen and carbon capture, utilisation and storage, by introducing state-of-the-art business models. It will also support the growth of new industries, unlocking tens of thousands of new skilled jobs across the UK. This reshaping of our energy industry will be overseen by a new future system operator, which will be charged with driving progress towards net zero, energy security and minimising the costs facing consumers.

[Lord Forsyth of Drumlean (Con)]

Could my noble friend tell the House how much extra revenue the Government are receiving in taxation as a result of the increases in oil and petrol prices?

[Baroness Penn (Con)]

My Lords, I know that the amount is substantial, but I do not have the particular figure to hand. However, I am sure my noble friend on the Front Bench can provide it to my noble friend when he concludes today’s debate.

I now turn to two Bills relating to agriculture, an industry that makes an important contribution to our economic and environmental health. The first is the genetic technology precision breeding Bill. Precision breeding describes a range of technologies, such as gene editing, which enable DNA to be edited much more efficiently and precisely than by current breeding techniques. Now we are outside the EU, we can adopt a more proportionate regulatory approach to the development and marketing of plants and animals produced through such technologies. Such techniques will enable us to grow crops that are more resilient to climate change and resistant to disease, boosting food security and reducing our reliance on pesticides. The UK is already home to world-leading research in this field, and these changes will unlock further innovations that will improve our food system’s sustainability and resilience and bring our approach in line with that of other major economies.

Finally, the kept animals Bill, which raises standards for pets, farmed animals and kept wild animals, will continue its passage in this Session as soon as parliamentary time allows. The Bill’s measures include action to tackle livestock worrying and bans on live exports for fattening and slaughter and on the keeping of primates as pets. It also tackles the cruel trade of puppy smuggling. In doing so, it delivers a key part of the Government’s Action Plan for Animal Welfare and important manifesto pledges.

These are difficult times for this country and the world, but the Bills I have outlined will play a big part in safeguarding our economy, securing key industries such as farming and financial services, and protecting our energy supply. I have no doubt that this proposed legislation will spark many substantive and insightful contributions today and in sessions to come, which I greatly look forward to hearing.

School Governing Bodies: Diversity

Debate between Lord Forsyth of Drumlean and Baroness Penn

Thursday 28th April 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, I believe that the Government provide clear guidance for trusts on their governance arrangements. The Government will always make sure that that is the case.

[Lord Forsyth of Drumlean (Con)]

My Lords, listening to the questions we have had, does my noble friend agree that the important thing is to look at the effectiveness of the governance of these schools? Would she like to pay tribute to our noble friend Lord Harris for the fantastic work he has done in transforming failing schools into some of the leading schools in the country?

[Baroness Penn (Con)]

My Lords, my noble friend is absolutely correct. It is about effectiveness and outcomes, and that is the focus of the schools White Paper that the Government recently published. To go back to the original Question, diversity is essential to ensure that effectiveness, and the Government support it.

Covid-19: Financial Support Schemes

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 6th April 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, I would like to pay tribute to my noble friend’s hard work in this area, but I disagree with him about the seriousness with which the Government take this issue. I was pleased to note that he welcomed the announcement in the Spring Statement of the funding to deliver the public sector fraud authority, about which I have already spoken to noble Lords.

[Lord Forsyth of Drumlean (Con)]

My Lords, I declare my interest as a chairman of a bank. Can I ask my noble friend: if the banks did not do elementary due diligence, such as checking that a company was trading or checking a national insurance number, why on earth should the Government pay out on the guarantee? Should it not fall on the banks for not having done their job properly?

[Baroness Penn (Con)]

My noble friend is correct that, while there were reduced checks in place on bounce-back loans, there was still a requirement for lenders to make checks, and we are quite clear in the terms of the loan guarantees that, if it appears that those checks were not made, then those businesses do not have a claim against their guarantee.

Spring Statement Affordability Test

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 23rd March 2022 Lords Chamber

[Lord Forsyth of Drumlean]

To ask Her Majesty’s Government what steps, if any, they took ahead of the Spring Statement to conduct an affordability test on the impact of the rise in cost of living, the reduction in Universal Credit payments of £20 per week and inflation rates for lower income families, and if so, what did it conclude.

[Baroness Penn (Con)]

The Government take seriously impacts on the cost of living for households, including when considering policies for the Spring Statement, and are providing support worth over £22 billion in 2022-23 to help. Her Majesty’s Treasury has published analysis alongside the Spring Statement, estimating the impact of policies announced, since the spending round 2019, on households. This shows that, in 2024-25, the tax, welfare and spending decisions will have benefited the poorest households the most as a percentage of their income.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am grateful to my noble friend, but this is not 2024-25. What people need now is cash in their pockets, not tax cuts later in the Parliament. Had the Treasury done an assessment—in fact, anyone can do the assessment—it would have concluded that the poorest people in this country simply will not be able to meet their bills, because of the impact of electricity and energy costs, because of food inflation and because CPI does not measure the real inflation rates that are felt by the poorest families in the country. Will my noble friend ask her colleague the Chancellor, whose measures I welcome today, to look again at the recommendation from the Economic Affairs Committee of this House to restore the £20 a week payment for people on universal credit?

[Baroness Penn (Con)]

My Lords, the Government absolutely understand that people need support with their household bills now. That is why, previously, we had announced £9 billion to support households with energy costs over the coming year. We consider all recommendations by the Economic Affairs Committee very carefully. Of course, we have provided further support to those on universal credit through cutting the taper rate and increasing the work allowance.

National Insurance Contributions

Debate between Lord Forsyth of Drumlean and Baroness Penn

Monday 7th March 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, an important aspect of the health and social care levy is that it is paid by employers as well as employees—because they benefit from having a healthy, supported workforce. Of course, we have also announced increases in corporation tax, because the Government did an awful lot to support businesses during the pandemic and everyone needs to contribute now to getting us back on to a path of sustainable finances.

[Lord Forsyth of Drumlean (Con)]

My Lords, I declare an interest as I am of pensionable age and therefore will not have to pay national insurance until next year. Given the extra money the Government will receive as a result of taxes on fuel, is there not a case for considering deferring the increase in national insurance until next year, so that everyone is in the same boat, as it were? People are going to be faced with immense costs for fuel, as well as the impact of inflation on the standard of living.

[Baroness Penn (Con)]

My Lords, the additional spending from the levy kicks in from this year onwards, so we matched the introduction of the levy with the introduction of the new spending, which cannot wait; we need to address the significant backlogs we have in our healthcare system. But my noble friend is correct that we have designed the new levy to apply also to people over pensionable age, as they will benefit in no small degree from the increased spending.

Cryptocurrencies

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 2nd March 2022 Lords Chamber

[Baroness Penn (Con)]

In my original Answer I did not only talk about the financial promotion of crypto assets; I also talked about the regulation of stablecoin. In response to the noble Lord’s point about the anti-money laundering regulations and counterterrorist financing regulations which apply to crypto assets, I would like to reassure noble Lords that the regulations imposing sanctions on Russia apply to crypto assets. Legislation being introduced this week in the economic crime Bill will give the Office of Financial Sanctions Implementation the powers it needs to enforce financial sanctions.

[Lord Forsyth of Drumlean (Con)]

Does my noble friend not think that the point made by the noble Lord, Lord Haskel, is very important in the current context of sanctions? Is it a practical proposition to ask the providers of cryptocurrency facilities to remove from their list anyone with a Russian email address?

[Baroness Penn (Con)]

I absolutely agree on the importance of this issue. On firms placing blocks on Russian transactions, the Government and the FCA have communicated with crypto firms to ensure that they understand their obligations with regards to sanctions, which include applying risk-based controls to mitigate the risk of sanctions evasion. However, we do not require that all Russian persons have their accounts suspended or frozen; that would not be in line with our current approach.

Windfall Tax: Oil, Gas and Energy Companies

Debate between Lord Forsyth of Drumlean and Baroness Penn

Tuesday 22nd February 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, I am afraid that the Government do not agree with the approach of the noble Baroness. However, where we do agree is on the essential nature of providing further support to households that are struggling with their fuel bills. That is why we are providing a £150 cash rebate for homes in council tax bands A to D, which is about 80% of all households, and a further £144 million of discretionary funding to councils for those households that would not otherwise qualify for that rebate.

[Lord Forsyth of Drumlean (Con)]

My Lords, if we were really concerned about the cost of energy to poor people in our country, would it not be a good idea to remove the green levies that are adding to their bills? Surely it is naive beyond belief to imagine that we can do without gas and oil in the immediate future. The reason that prices are so high is that we are not able to produce enough of our own gas supplies. That requires investment and surely means not taxing the people who are capable of providing it.

[Baroness Penn (Con)]

My Lords, my noble friend is right that in the short to medium term we will continue to need oil and gas supplies, and that is why the Government think that it is important that investment continues to be made in our oil fields. But we also need to fund the transition to a net-zero economy, where we move more towards clean and renewable energy in the longer term. That is why we have programmes such as the North Sea transition deal, to do that in a managed and orderly way.

Young People: Post-pandemic Employment

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 16th June 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, people on employment and support allowance should receive the personalised and tailored support back into the workplace that is appropriate for the needs associated with their disability. The Government’s commitment to provide that support continues.

[Lord Forsyth of Drumlean (Con)]

My Lords, has my noble friend read the report from the Economic Affairs Committee of this House on the employment consequences of Covid, in particular the recommendation that access to Kickstart should not be limited to people who have been on universal credit for six months? That effectively means that young people who have lost their jobs, who are suffering the worst effects of Covid, have to wait for as long as nine months before they have the chance of training. That cannot make sense and will be demoralising to young people. On apprenticeships, does my noble friend accept that the basic problem with providing apprenticeships is the cost? The apprenticeship levy is a complete disaster and needs reform.

[Baroness Penn (Con)]

My Lords, I have read the work of the noble Lord’s committee and reassure him that, before accessing the Kickstart scheme, young people get other support to help them back into the workplace—for example, through work coaches provided by the DWP, the number of which we have massively expanded during the pandemic. We have had significant success in improving and reforming apprenticeships, but I know that work is ongoing to ensure that the apprenticeship levy is flexible and meets employers’ needs.

G7 Global Tax Agreement

Debate between Lord Forsyth of Drumlean and Baroness Penn

Tuesday 8th June 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, that is also subject to ongoing negotiations, including at the G20 next month. I assure the noble Lord that the digital services tax is intended to stay in place until we have implemented the new international agreement, not just agreed it in principle, so those revenues will continue to flow.

[Lord Forsyth of Drumlean (Con)]

My Lords, could my noble friend answer the question that was put previously: is it not the case that the US is the main beneficiary in tax revenues from this? Could she deal with the point about Amazon? She says she cannot deal with particular individual taxpayers, but the whole point of this measure is to deal with Amazon, which is destroying retail businesses across the country because they have to pay rates. On the digital service tax, could she confirm that Amazon reacted to it by simply passing on the 2% to its third-party retailers, and that there was no disadvantage to it at all? As my noble friend Lord Leigh has pointed out, Amazon would not be covered by this measure. How can you enter into a deal without knowing the detail in advance?

[Baroness Penn (Con)]

My Lords, as I have said, a lot of the detail is still being worked out. However, I reassure my noble friend on a number of fronts. As part of the work on the detail of the agreement, we are considering how pillar 1 will apply to groups that might have different business lines, some of which may fall within the criteria and others outside them. I would say to both my noble friends, as indeed I did, that the agreement is designed to address specific concerns about digital companies, or companies that do not have physical presences in the countries where they have activities. We are doing other work to address concerns around online retailers; for example, I mentioned the fundamental review of business rates that the Government are currently undertaking.

Inheritance Tax: Cohabiting Siblings

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 10th February 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, of course the Government recognise the strong family ties that my noble friend refers to. However, that is a different matter from the formal legal obligations that marriage and civil partnership relationships entail. I also remind noble Lords of the context that 95% of estates pay no inheritance tax at all.

[Lord Forsyth of Drumlean (Con) [V]]

My Lords, could my noble friend explain why the Treasury thinks a sexual relationship is necessary to avoid the trauma of losing one’s home to pay inheritance tax when one member of a long-standing couple dies?

[Baroness Penn (Con)]

As I said to my noble friend Lord Lexden, the issue is around the unique legal relationship that marriage and civil partnerships entail. No similar legal relationship exists for siblings.

Areas with Additional Public Health Restrictions: Economic Support

Debate between Lord Forsyth of Drumlean and Baroness Penn

Wednesday 7th October 2020 Lords Chamber

[Baroness Penn (Con)]

My Lords, the furlough scheme was not replaced in the expectation of a V-shaped recovery. The Government would, of course, love to have a V-shaped recovery, but I do not think anyone has been that optimistic so far. However, we are in a very different place from when furlough was put in place. We are not in the position of a lockdown—we are attempting to do everything we can to avoid such measures—and, while there are restrictions in place, many businesses are able to trade and go about their business, albeit at reduced levels. That is why so much support has been put in place, including, for example, extending the VAT cut on hospitality from January to March. We will continue to respond when necessary, but the furlough scheme represented a particular phase in our response to coronavirus and we are in a different phase now.

[Lord Forsyth of Drumlean (Con) [V]]

My Lords, does my noble friend agree that if you break it, you should pay for it? Do the Government not have an absolute moral duty to compensate and support viable businesses made unviable as a result of their regulations?

[Baroness Penn (Con)]

My Lords, we are putting in place a huge amount of support to businesses affected by the regulations to contain coronavirus. I referred to the support for businesses that may be forced to close by local lockdowns. Of course, there is also the bounce-back loan scheme that has provided billions of pounds of support, and we have extended both the application period and the repayment period for that scheme to up to 10 years. This will halve monthly payments, which do not even come in in the first year—the Government are covering those.