Taxation: Healthcare Insurance

Lord Hamilton of Epsom Excerpts

Thursday 9th June 2011 Lords Chamber

[Lord Sassoon]

My Lords, I can only repeat that there is no intention to change the relationship between private healthcare provision and entitlement to NHS care.

[Lord Hamilton of Epsom]

Can my noble friend clear my mind on this? If someone privately insures, whether they get tax relief or not, surely they remove a burden off the National Health Service.

[Lord Sassoon]

My Lords, they may to some extent at the margin remove a burden off the National Health Service, but, equally, under the previous arrangements where partial tax relief was given, there was considerable additional cost to the taxpayer. It is estimated that putting in place some new allowance would immediately cost the Exchequer at least £700 million—probably considerably more—because of the dead-weight effect of offering that relief to people who already have medical insurance.

EU: Budget

Lord Hamilton of Epsom Excerpts

Thursday 28th April 2011 Lords Chamber

[Lord Pearson of Rannoch]

My Lords—

[Lord Hamilton of Epsom]

My Lords—

[Lord Marlesford]

My Lords, did not my noble friend’s earlier answer, when he described how information was not available, give a bit of a clue as to one way in which we can make progress? Would it not be much more satisfactory if there were full details of any failure properly to account for national expenditures in the EU budget? In that way we would at least know who was not doing things properly, by how much and when, and that shaming could have some role in getting people to behave better.

Economy: Growth

Lord Hamilton of Epsom Excerpts

Thursday 31st March 2011 Lords Chamber

[Lord Hamilton of Epsom]

My Lords, we have heard two maiden speeches, which have gone to remind us all of the richness and variety of the membership of your Lordships' House. We are very privileged to have with us the noble Lord, Lord Kestenbaum, with his experience of the Japanese and the US economy, which are two very different economies from our own. I think it is also true to say that he is extremely proud of his Jewish blood. We should pay tribute to the Jewish immigrants who come to our country, who have done so much to make it move forward and have shown so much enterprise, which has made us the country we are today. I declare an interest as I have a certain amount of Jewish blood myself on both sides—but unfortunately not enough.

I also pay tribute to my noble friend Lord Popat. I spent a certain amount of time in east Africa, in Kenya rather than Uganda, and I know the massive contribution that was made there by the Asian community. Of course, it was a tragedy for Uganda when Idi Amin decided to kick it out. There was a terrible moment here when we hesitated before actually agreeing to allow those Ugandan Asians to come to this country. What a good thing we did. Uganda’s loss was certainly our gain. Once again, we benefited from incredibly entrepreneurial immigrants who played a very massive role in the growth of our economy and the movement of our enterprises. My noble friend is, indeed, very welcome in our House, and we are very lucky to have him here.

I congratulate the noble Lord, Lord Hollick, on launching this debate. I was extremely glad, as my noble friend Lord Newby was, that he raised the whole issue of road pricing. Road pricing is certainly something that should be embraced by our Government. It has the effect of actually getting motorists to contribute to the costs of the driving which they do, but I can understand why the Government are hesitant. The motoring community is certainly one that Governments rather hesitate before they antagonise them. But I think that this is the way forward, and I hope serious consideration will be given to road pricing. We have to be very brave if we are going to do it, and we have to price existing roads to pay for future roads. I totally accept the noble Lord’s point that technology has now moved on and has made this possible.

I would like to address the question of what I would describe as the phoney war about the whole business of deficit reduction. There is a concept being put forward by the shadow Chancellor, Ed Balls, that somehow there is a rather easier way of addressing the deficit. There is a suggestion from the Labour Party that if by some extraordinary circumstance it had actually won the last election it would have stayed with the Budget of the former Chancellor, Alistair Darling. I do not think there is the slightest chance of that happening whatsoever. If we had a Labour Government today, in total or global terms their deficit reduction plan would be very similar to the one that this Government are putting forward. If they had been in power Labour, too, would have taken £6 billion-worth of savings in the current year. It is a complete load of nonsense to suggest that there is somehow an easier way of approaching deficit reduction when the problems that we have are so massive. The reason for that is that although Chancellors love to pretend that they are in total control of the economy, the bottom line is that they are not. The people who have massive influence on our economy are those in the markets.

If we had gone ahead with the Darling Budget and had done nothing to change it, we would now be paying much higher interest rates than we are on our debt. That would merely roll forward the problems that we now have of increasing debt. This is one of the sadnesses that I have with the Budget which we have just seen: we are watching the total amount of government debt climb, in the OBR’s forecast, from £759 billion in 2009-10 to £1,359 billion at the end of the Parliament. I would like to see us repaying debt. It is very sad that we are going to inflict this enormous burden of debt on future generations.

Inflation

Lord Hamilton of Epsom Excerpts

Thursday 17th March 2011 Lords Chamber

[Lord Peston]

My Lords—

[Lord Hamilton of Epsom]

My Lords—

[Noble Lords]

This side!

Deficit Reduction

Lord Hamilton of Epsom Excerpts

Tuesday 18th January 2011 Lords Chamber

[Lord Sassoon]

My Lords, they will and do appear in tables in the Office for Budget Responsibility’s forecasts and records of sales. For example, the sales of fixed assets are dealt with in table 2.2, and the sales of financial assets when they come in are—

The noble Lord, Lord Peston, shakes his head, but I am looking at page 21 of the OBR’s Budget 2010 supplementary material which has tables. There are not yet financial sale numbers to go in for future years, but table 2.2 is there on page 21.

[Lord Hamilton of Epsom]

My Lords, will the Minister ensure that he gets his timing right on selling the shares in the banks, and not make the same mistake as Gordon Brown when he was Chancellor of the Exchequer, who sold most of our gold stock for $280 an ounce when the price is now $1,300 an ounce?

[Lord Sassoon]

My Lords, I do not want to give any hostages to fortune, but it would be difficult for any Chancellor to get it as disastrously wrong as that Chancellor did on the gold sales.

Autumn Forecast

Lord Hamilton of Epsom Excerpts

Monday 29th November 2010 Lords Chamber

[Lord Sassoon]

My Lords, it is always good to have the noble Lord, Lord Myners, present. I do not suppose that his Government ever applied any spin to any numbers. He shakes his head. Oh, well. All our memories are failing. Seriously, the difference this time is that we have a much greater, more transparent analysis of the numbers—over 150 pages of numbers. I am grateful to him for welcoming the formation of the Office for Budget Responsibility, and I hope he will be with me, giving it a fair wind in Committee on the Bill shortly.

There is a serious point here. Not only are there 150 pages of analysis and a lot more detail than was ever given before, and not only has that been available a couple of hours before my right honourable friend’s Statement, but we will be able to pick over it in the next few weeks. The OBR itself will come to the Treasury Select Committee and answer questions there and all sorts of other questions in different fora.

As to his specific question on the output gap, yes the numbers show that it will be 0.9 per cent in 2015, down from 3.3 or 3.4 per cent as it is now and from 4.2 per cent as it got to in 2009. As to the levels of private sector debt, I do not accept the numbers given by the noble Lord, Lord Eatwell; I accept the numbers that are in the OBR’s document. There will be a total leverage in the economy that is very far down on the over-leverage with which the previous Government left us.

[Lord Hamilton of Epsom]

Does my noble friend the Minister accept that one of the critical things that it was important for the coalition Government to do was to reassure the financial markets that we had a handle on the whole question of the deficit which we had inherited? That is one of the reasons—my noble friend mentioned this—why interest rates have come down since the coalition Government took over and since the new Budget was announced, and one of the reasons why the interest burden is going to be much less over the coming years.

However, is it not rather depressing that the noble Lord, Lord Eatwell, still goes on about the possibility of a double-dip recession when it is quite clear from these forecasts that the chances of that are almost nil?

[Lord Sassoon]

I am very grateful to my noble friend. I absolutely share his view both on the depressing scenarios that the Opposition choose to paint and on the overall scenario for solid growth which the OBR confirms.

As to the judgment of the financial markets, I have looked at this morning’s numbers, and the UK spread over the German 10-year Bund has gone down from 96 basis points at the date of the general election to 60 basis points today, which is a very significant measure of confidence by the international markets in our consolidation plan.

Finance: Fiscal and Monetary Policy

Lord Hamilton of Epsom Excerpts

Tuesday 2nd November 2010 Lords Chamber

[Lord Hamilton of Epsom]

Does my noble friend accept that, if we are to see a revival in the economy, it is going to come from the private sector and from low interest rates, and that those interest rates would be very much higher if this Government were not addressing the appalling structural deficit that we inherited from the previous Government?

[Lord Sassoon]

I completely agree and am grateful to my noble friend for drawing our attention to that. Indeed, only 10 days ago, after the spending review, Standard and Poor’s, one of the leading rating agencies, moved our rating from negative to stable. It is that confidence that keeps interest rates low and enables businesses to invest.

Banking: Bonuses

Lord Hamilton of Epsom Excerpts

Monday 1st November 2010 Lords Chamber

[Lord Sassoon]

My Lords, lots of people threaten to do all sorts of things when they are in the middle of a negotiation. Whatever we continue to do to tackle unacceptable bonus structures in banks, we want to ensure that, among other things, they are incentivised to align their remuneration structures with the reduction of risks that bankers entail, and that we continue to have an important banking sector in this country.

[Lord Hamilton of Epsom]

My Lords, does my noble friend accept that one reason why there is so little finance for people to buy houses, and for small businesses, is that during the financial crisis many of the foreign banks took their money back to where they came from? They are not returning to London because they regard it as highly taxed, they regard certain members of the Government as extremely hostile to bankers, and they are worried about the degree of regulation. We must get these people back—contrary to what the noble Lord, Lord Dubs, said—because otherwise we will not have enough finance in this country to get the economy moving again.

[Lord Sassoon]

I certainly agree with my noble friend that we need a vibrant banking market to underpin the economy’s recovery. The action that the Government have taken to make sure that interest rates remain low is absolutely critical. We welcome the first steps taken recently by the British Bankers’ Association task force, which made a range of proposals that go to the heart of tackling the need for a continued flow of credit to British business.