United Kingdom Declining Birth Rate

Lord Hamilton of Epsom Excerpts

Wednesday 6th November 2024 Lords Chamber

[Lord Livermore (Lab)]

It is a very important point and one that we should retain as we make policy.

[Lord Hamilton of Epsom (Con)]

My Lords, was the Minister not moved by reports in the press that AI is going to account for 6 million jobs in this country? If that happens, will we not be quite grateful for a low birth rate?

[Lord Livermore (Lab)]

We have to ensure that changing technology works to the benefit of all in society and contributes to our key objective of economic growth.

Fiscal Rules

Lord Hamilton of Epsom Excerpts

Tuesday 29th October 2024 Lords Chamber

[Lord Livermore (Lab)]

I hear what the noble Baroness says. As I have said already, the Chancellor will set out the Government’s full fiscal plan, including the precise details of our fiscal rules, in tomorrow’s Budget.

[Lord Hamilton of Epsom (Con)]

My Lords, when the Minister was first talking about the so-called black hole, it was £21 billion. Does he accept that this is actually less than 2% of total government spending? It is almost inconceivable that anybody with their head screwed on properly in the Treasury could not find savings to that amount.

[Lord Livermore (Lab)]

I am very grateful to the noble Lord for allowing me to talk about the £22 billion black hole in the public finances that was covered up from the British people, from this House and from the OBR, which has confirmed it by establishing its independent review. It was always £22 billion, contrary to what the noble Lord says. If he would like to come up with £22 billion of savings, I would more than like to hear them.

Overseas Territories: Tax Haven Status

Lord Hamilton of Epsom Excerpts

Monday 26th February 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

The Government are not relaxed about offshore tax avoidance. We maintain that all tax avoidance needs to be stamped out, which is why we work so very closely with the overseas territories on tax avoidance, anti-money laundering and counterterrorism finance, including with registers of beneficial ownerships. We have very good relationships. We meet with our colleagues frequently to discuss how to put things in place such that they are implemented as quickly as possible.

[Lord Hamilton of Epsom (Con)]

My Lords, does my noble friend accept that, if some of the overseas territories ceased to be tax havens, they would become an even greater burden on the British taxpayer?

[Baroness Vere of Norbiton (Con)]

As I said in my opening remarks, we encourage the overseas territories to develop sustainable and successful economies. As I also said, they are responsible for setting their own tax rates, and we will think about how future tax rates may change. It is also the case that tax rates will be underpinned by, in particular, pillar 2, which will be implemented via domestic rules across all overseas territories where it is relevant.

Financial Services and Markets Bill

Lord Hamilton of Epsom Excerpts

Report stage
Tuesday 6th June 2023 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, I declare my interests as a director of two investment companies as stated in the register. I listened with interest to the noble Lord, Lord Sharkey, in bringing forward his Amendment 1 and other amendments. I feel strongly, as he has suggested, that what has been agreed for the REUL Bill should also be acceptable for this Bill. Indeed, one of my later amendments makes the same point. As he said, the Bill is in some sense a carve-out from the REUL Bill dealing exclusively with financial services. As for his other amendments, I will not repeat the arguments I made in Committee, but I look forward to hearing whether the Minister can give any greater assurance to the House today than she did at that time.

[Lord Hamilton of Epsom (Con)]

My Lords, I support Amendment 1. My noble friend Lord Hodgson of Astley Abbotts does not seem to be with us, but I have collaborated with him over the retained EU law Bill, and I know his views are that Parliament has been collectively losing control of its agenda and that parliamentary sovereignty has been undermined. He has been chairman of the Secondary Legislation Scrutiny Committee, and he notices that more and more business goes through both Houses under statutory instruments. That is not really what we should be going along with in either House, and it is disappointing that the other House does not seem to worry too much about the fact that it is losing its sovereignty and its power to control legislation. That seems to be a fact we have to deal with.

I have repeated this very often, but unlike most people in your Lordships’ House, I campaigned to leave the EU. I often wonder what would have happened if the people who were really concerned about the fact that we were getting all this legislation from the EU—inevitably, I accept—which we could neither amend nor reject knew that we would substitute it with stuff in respect of which the Executive are given all the power that had previously lain in Brussels. If we had campaigned in the country and told people that that was what was going to happen, I am not at all certain that the referendum would have been won by the leave campaign.

It strikes me as very odd that when we talk about taking back control, it seems to exclude Parliament. It does not seem to have a desire—particularly the other place—to actually take back control of legislation, which is what I think we should be doing. It is time we brought this to a halt. I do not have any great optimism that that is going to happen, but I would be more than happy to support the noble Lord’s amendment if he presses it to a Division.

[Lord Lisvane (CB)]

My Lords, I am a signatory to this amendment, although some quirk of technology has meant that my name does not appear on the Marshalled List today. I am delighted to join other noble Lords whose names are on the amendment. This is déjà vu all over again, as they say, because this amendment is very similar to one proposed to the retained EU law Bill by the noble and learned Lord, Lord Hope of Craighead, which was approved by this House, sent to the Commons, sent back to us and returned in a slightly different form in the Motion moved by the noble Lord, Lord Anderson of Ipswich, and agreed today.

Perhaps I may very briefly recall what I said on that Motion, because it applies equally to this amendment. This would not set up an entirely new category of amendable SIs which form a new legislative family, as it were. To suggest that it does as a reason for opposing the amendment is to be frighted with false fire, to borrow Hamlet’s phrase. There are two statutes, as referred to by the noble Lord, Lord Sharkey, that have the power to amend SIs where the amendments are immediately effective. In my view, this is much more like the super-affirmative procedure, which is set out in some detail in the proposal contained in Amendment 117. The difference is that Ministers would not have the discretion to refuse the amendment which is suggested. It does not seem to me outrageous that Ministers should be subject to the will of Parliament, especially if a proposal might seriously disadvantage businesses or individuals. I commend the amendment to your Lordships.

Economy: Productivity

Lord Hamilton of Epsom Excerpts

Monday 5th September 2016 Lords Chamber

[Lord O'Neill of Gatley]

My Lords, private business needs to feel confident about many things in order to undertake further investment decisions, of which the latter part of what the noble Baroness asked may be one. However, a number of other factors are important. In that regard, it is interesting that the latest evidence on investment is not only slightly more encouraging than was the case last year but perhaps ahead of some expectations.

[Lord Hamilton of Epsom (Con)]

My Lords, can my noble friend confirm that one of the reasons for low productivity in the United Kingdom is the seemingly unlimited supply of immigrant labour which is keeping down wage rates? Does he agree that if we manage to limit immigration as a result of Brexit, our productivity might go up?

[Lord O'Neill of Gatley]

My Lords, I am not sure that I would agree with my noble friend’s assertion. However, I agree with the inference that many things lie behind our apparently low and disappointing productivity performance, which I spend far too many hours trying to wade into. If you look at this in the kind of detail that I do, it is interesting to note that, if you take away the negative contributions made in those areas such as finance about which people are usually the most critical, our productivity performance since the recession of nine years ago is not any worse than that of any other member of the G7. There are many reasons behind our apparent—and probably realistic—disappointing productivity performance.

Income Tax: Top Rate

Lord Hamilton of Epsom Excerpts

Monday 16th March 2015 Lords Chamber

[Lord Newby]

But, my Lords, the top 1% of income tax payers is now paying between 27% and 28% of all income tax, which is a higher proportion than at any point during the last Labour Government. The two changes that I have mentioned, which bring in more than £6 billion extra a year, apply only to the highest earners.

[Lord Hamilton of Epsom (Con)]

My Lords, despite the comments of the noble Lord, Lord Kinnock, is it not true that lowering tax rates increases revenue, and does that not make it rather surprising that the Liberal Democrats are not prepared to lower the top rate to 40%?

[Lord Newby]

No, my Lords, it does not. HRMC estimates that if you reduce the top tax rate from 45% to 40%, the likely cost to the Exchequer will be about £1 billion.

Barnett Formula

Lord Hamilton of Epsom Excerpts

Tuesday 10th February 2015 Lords Chamber

[Lord Newby]

My Lords, it is always a pleasure to agree with the noble Lord. It is, however, worth underlining the point that he has just made. There would be a £6 billion deficit compared to the figures in the Scottish Government’s November 2013 White Paper in respect of oil revenues, which would mean that for that reason alone the Scottish deficit in 2016-17 would be more than 6% of GDP, one of the biggest in the developed world.

[Lord Hamilton of Epsom (Con)]

My Lords, as the progress of Scotland towards independence seems to be almost inexorable, should we not be getting them used to the idea of doing without English money and phasing out the Barnett formula over a period of years?

[Lord Newby]

Well, my Lords, that is exactly what we are doing. The transfer of tax revenue to the Scottish Government means that the block grant, the element to which the Barnett formula applies, is falling by two-thirds from approximately £30 billion to £10 billion.

Genuine Economic and Monetary Union (EUC Report)

Lord Hamilton of Epsom Excerpts

Wednesday 2nd July 2014 Grand Committee

[Lord Hamilton of Epsom (Con)]

My Lords, I pay great tribute to our clerk, Stuart Stoner, who has been quite remarkable in the way that he has reconciled all our different views. I also pay great tribute to our chairman, the noble Lord, Lord Harrison, because while he and I do not really agree on Europe, he has managed to accommodate my views in the most agile way.

The noble Lord, Lord Liddle, raised the question of past Prime Ministers poisoning relations with Europe. I think he was referring mainly to Conservative ones and that my late friend Lady Thatcher was probably high in his mind. However, I remember that one of her great achievements was in the rebate of much of the money that we were sending to Europe. You could not have accused Prime Minister Blair of being anything other than a Euro-enthusiast. He did a deal where he gave back half of our rebate in return for the reform of the common agricultural policy. That policy spent 39% of the EU budget last year, so we got absolutely nothing in return. I found that this had slightly poisoned my view of the EU—not that it was not poisoned before—so this poison is going both ways. It is a bit paranoid to suggest that it is one-way traffic.

We have had economic and monetary union; we now have genuine economic and monetary union. I would argue that neither EMU nor GEMU are genuine. The problem with the single currency and the introduction of monetary union is that it was one part of a construct to lead Europe towards being federal. What was also critical within those building blocks would be to have a central elected Government, with the power to tax and transfer money from the rich to the poorer parts of the eurozone. You would also have to have a federal reserve bank as the bank of last resort, which would issue most of the debt for the eurozone. These were two drastic omissions in the construct of what was hoped to be a new European nation. If you leave those two bits out and merely have monetary union on its own, it is extremely vulnerable.

Let us face it: if the European Central Bank had been allowed—the noble Lord, Lord Desai, pointed out that it was the Germans who stopped this happening—the eurozone crisis would have been a fraction of what it actually was. Right from the beginning, the European Central Bank could have moved in to bail out banks and help nations, saving sovereign debt, rather than reaching this point where some of us wondered whether Greece was going to go completely bust and so forth. This crisis has been caused by the way that the whole thing was set up in the beginning.

Is anything going to change? Things are slightly changing in the European Central Bank but the democratic deficit is still there and will not get any better in the immediate future. There are in fact no plans to elect anybody; we have just appointed Mr Juncker and there was not an awful lot of democracy about that. So you have no democratic accountability and, to quote the noble Lord, Lord Desai, again, you have economic policies that may be leading towards deflation. We may be looking at a period of 10 years when there is no growth whatever, which is what the Japanese saw. If the eurozone does not grow, and we are starting with very high levels of unemployment, I do not think it is going to survive.

My noble friend Lord Lamont said that he has always had an argument with me about this. He thinks it is going to muddle its way through. Well, there are the economic problems and the stress tests coming up on the banks. Opinions differ on this. The noble Lord, Lord Davies, always says to me that the markets are buying banks all over Europe, so they do not think there is a liquidity problem with them. Well, the market has been wrong before. We will have to see.

Deflation and low growth are the real problems. I think that the next crisis for the eurozone is going to be not an economic crisis but a political crisis. We have just had the European elections which have demonstrated right across Europe, not just in the United Kingdom, growing Euroscepticism and disillusion about the way that Europe is operating. Just to show that they are completely unmoved by these results, they appoint Mr Juncker as President of the Commission, which demonstrates that this is business as usual, meaning, “We are not going to have our minds changed by electorates and people saying things. We are not going to change anything. We are going to carry on the way we always have”. Well, if it goes on like that, I can see growing political problems in the eurozone.

If it fails to grow and we do not see any economic growth, even if we do not see a period of deflation, all the economists agree with the noble Lord, Lord Desai, that we are going to see arthritic growth, but it is not going to be very great. We are starting with very high levels of unemployment, particularly youth unemployment, and that is not a position that you can sustain over a very long period. Let us face it; if it cannot deliver economically, what is the point of the eurozone? People will increasingly ask that question.

We have a referendum coming up in 2017. All my Eurofanatical friends in this House—I find I do not have many friends who really share my views—always say to me, “Don’t worry. The result of the referendum is going to be exactly the same as it was last time. Why should it be anything else? All the major parties will support staying in, trade unions will support staying in, and the CBI and everybody you can possibly think of”. Yes, but the last time we voted—indeed, I voted—to stay in the European Union, it was quite different. Britain was poverty stricken. We had appalling labour problems, and we looked across the channel at Europe which was prospering. The chances are that in 2017, those roles will be completely reversed. There will be a prospering United Kingdom and a strife-ridden, low growth, pretty appalling Europe exporting as many of its people as it possibly can. I gather that we are suffering from—or benefiting from, possibly—an enormous influx of Spaniards as we speak. More and more people are wanting to come to this country. Migration flows are causing an enormous problem. I think anybody who sits round and thinks that this eurozone is just going to float through all this without any problem has some very nasty shocks coming their way.

--- Later in debate ---

[Lord Davies of Stamford]

I repeat that you cannot at the same time complain about something when it is absent and then complain when it is present; that does not make any sense to me at all. Equally, I do not think that I have heard any response to my points about democratic accountability. If there is a desire for more democratic accountability in the EU, which there is, and if it should be addressed, which in my view it should be, then you cannot turn down every possible proposal that is made in order to achieve that, which is what the Eurosceptics tend to do.

I think that our report makes three conclusions. The first is that the general direction of genuine monetary and economic union is probably right. We support it and think that it is a sensible thing for the eurozone to be engaged in. We feel that it should go further and be completed. We think that it is troubling that one or two elements of the agenda have not been implemented and will not be in the immediate future, notably the retail bank deposit insurance system that we have just referred to and which has been referred to several times today; we are broadly in favour of that and think that it is a very good scheme.

The second general conclusion is that this process is not without risks and costs for our country. That point is made very clearly in paragraphs 185 and 186 of our report, to which I draw the Committee’s attention. It is also made in another document, the British Bankers’ Association report, which we have obviously all been sent. I have been sent a copy, and it has already been referred to and quoted from. I shall quote from it in case some people here have not received it:

“EU, government and industry studies have shown that deepening the Single European Market offers a growth potential that is achievable without further increasing public debt … However, the understandable moves towards stronger Eurozone governance may make it more difficult for the UK financial sector to play a full role. For example, development of Eurozone caucusing, outside the EU-28 format, on matters that impact directly the Single Financial Market could, even unwittingly, damage its integrity”.

The document goes on to raise other risks, not just caucusing but the risk of the eurozone having a permanent president, the risk of the new configuration of the European Parliament being less likely to defend British interests—largely because the Conservative Party withdrew from the EPP, so that is entirely its fault—and other risks.

The fact is that the British public have been bamboozled, and this report goes some way towards redressing that and illuminating them, which is very necessary. They had been persuaded to believe that somehow we can have a half-in and half-out approach, with one foot on one side of the fence and one on the other in our relations with the EU at no cost, or that we can gain all the benefits from the EU without actually subscribing to all its programmes and disciplines. The sheer fact is that you can never do that in life, and you cannot do it in this case. Personally, I would prefer any measure of relationship with and access to the European single market and the EU than none. I am the sort of person who would always prefer half a loaf or even a quarter to no bread at all. However, I am very conscious that we are losing some portion of the loaf by the course that we are adopting. That comes out very clearly in the conclusions to the report, and we have fulfilled a useful function in writing it.

[Lord Hamilton of Epsom]

As the noble Lord, Lord Kerr, said, we are not part of the eurozone group, so are we not inevitably half in and half out, whether we want that or not?

[Lord Davies of Stamford]

As the noble Lord, Lord Kerr, said, as I shall say myself and, indeed, as the report states, we are not just out of EMU. We could not join EMU if we wanted to because we do not qualify under the fiscal provisions. Our fiscal deficit is excessively high—more than twice the level required the last time I looked at the figures. We cannot join anyway; we just have to face that.

Quite apart from that fact, it is true that the public in this country have been poisoned against the whole notion of EMU by a very effective press campaign, and it would be quite difficult to join EMU in the short term even if we qualified, which we do not. As we do not, it is a theoretical issue. Quite apart from that, we could, if we wished, join a banking union. We appear, for reasons which are unconvincing to me, to have decided not to join a banking union. As a result, we will find that we are not really, truly in the single market.

I put that the other day—this is a matter of public record because it was an open committee session—to the chairman of the Financial Reporting Council, Sir Win Bischoff. He agreed with me unequivocally that, as a result of what is happening, we will have a fragmented single market. We will have our own banking regulation based on our own bank regulation Bill. We have secured a derogation from the bank regulation directive, which I think is very undesirable. That means that, although there will be no fundamental differences in the way that banks are regulated in the eurozone and here, there will be small differences from time to time. There will be different responses because different people will be doing the regulating. There will be greater compliance costs. British banks such as HSBC and Barclays with major operations on the European continent will have to go through parallel procedures in different countries, whereas they could have just reported in one coherent way on a consolidated basis to one regulator, which would have been much more desirable.

More serious than that, there will be regulatory arbitrage, with distortions: people being tempted—no, being driven—to practise certain operations and activities in some markets merely because regulation there is slightly lighter than in other areas within the single market. That is not a single market at all. There will of course be a great lack of clarity and, therefore, investor and depositor confidence as a result of the confusion and complexity, which is, again, quite unnecessary.

It is a perfect example of how you can impose costs on yourself for no useful purpose. We all say that we want a single market. We are all in principle against regulatory arbitrage—all British Governments always have been—but we have deliberately created a fragmented structure which has higher costs and prevents a single market taking place. That really cannot make sense. It is about time that we realised that our policies—I say our policies; I mean the policies of the Government of the day, the coalition Government—contradict the national interest. Because we are not in the eurozone, we face the danger that problems may be created for us by the eurozone itself through its members caucusing for meetings of ECOFIN or other bodies due to the greater weight given to the eurozone organisations—a point made by the British Bankers’ Association. Not only may we be the victims of other people doing things that we do not like very much but we are creating problems for ourselves, which seems particularly irrational.

The report is a very useful piece of work and it deserves wide consideration. I hope that it may be the beginning of a reconsideration of the rationality of our policies in this area, because it is a great shame that for reasons of, I think, essentially party politics or emotion, we are often dysfunctional in our pursuit of the national interest.

Employment: Private Sector Jobs

Lord Hamilton of Epsom Excerpts

Thursday 30th January 2014 Lords Chamber

[Lord Newby]

My Lords, I do not agree with that basic proposition. I do not think the losers far outnumber the winners. I remind the noble Baroness that there was an increase in employment of some 450,000 in the past 12 months. All those people are winners. Many people on modest incomes have benefited by several hundred pounds as a result of the increase in the income tax threshold. There are very many winners already, and as the economy continues to grow, there will be a lot more.

[Lord Hamilton of Epsom (Con)]

Does my noble friend accept that past economic recoveries have always started in London and the south-east and they then spread to the rest of the country? The noble Lord, Lord Harrison, and other noble Lords opposite should be patient. I am sure the benefits will come through by May next year.

[Lord Newby]

My Lords, one of the interesting things that came out of the cities report, to which the noble Lord, Lord Harrison referred, was the beneficial effect that London has on the rest of the country. For example, that report shows that in Southampton in the period 2008-12 local firms cut their employment by 7% but London-based firms investing in Southampton increased their employment by 24%. That is the way in which a successful London helps the rest of the country and why the Centre for Cities came to the conclusion that constraining London’s growth would harm the UK economy generally.

Banks: Payment Protection Insurance

Lord Hamilton of Epsom Excerpts

Monday 13th January 2014 Lords Chamber

[Lord Newby]

My Lords, there is a certain amount in what the noble Lord says, but I repeat what I have said: there has been a huge amount of publicity around this issue and not only have a very considerable number of people made claims, but £12.9 billion has been paid out in respect of those claims.

[Lord Hamilton of Epsom (Con)]

When will my noble friend go a little further than Vickers and actually break up those banks that are too big to fail and seem also to be too big to manage?

[Lord Newby]

My Lords, again this is something that we have debated at some length. The Government have taken effective steps to ring-fence retail banks and to make sure that a resolution position is in place so that if they get into difficulties, there is a prearranged way of dealing with that to ensure that the Government are not faced with the problems they had in 2008, when essentially all the banks which got into financial difficulties had to be propped up.