Taxation: Income Tax

Lord Howarth of Newport Excerpts

Monday 24th June 2013 Lords Chamber

[Lord Newby]

My Lords, I do not have that figure immediately to hand, but it was very significant. It was more than the potential loss of revenue from reducing the top rate of tax.

[Lord Howarth of Newport]

My Lords, Colbert famously said that the art of taxation is to raise the maximum of revenue with the minimum of squawking. This Government are raising their revenue with a maximum of purring. Should that not make us suspicious?

[Lord Newby]

No, my Lords.

Tobacco: Smuggling

Lord Howarth of Newport Excerpts

Thursday 16th May 2013 Lords Chamber

[Lord Newby]

Whether it is in Northern Ireland or anywhere else, the people who smuggle cigarettes do, indeed, tend to smuggle other things, typically drugs, and sometimes even more dangerous things than that. I do not have an exact breakdown, but a lot of this smuggling is carried out on a large scale by criminal gangs who are looking to smuggle anything they can with a high value, of which cigarettes typically are only one component.

[Lord Howarth of Newport]

I welcome the Minister’s statement that the Government are considering introducing greater consistency in their treatment of tobacco smuggling and the smuggling of other substances. Will they consider aligning more extensively their treatment of tobacco, alcohol and other psychoactive substances in making policy across those fields more consistent?

[Lord Newby]

That was an extremely wide question. As a general principle, that is what the Government are seeking to achieve. As I say, we are putting additional effort into combating smuggling not just tobacco but across the piece.

Inequality: Income and Wealth

Lord Howarth of Newport Excerpts

Monday 11th March 2013 Lords Chamber

[Lord Deighton]

There is clearly a relatively academic debate about the impact of equality and inequality on efficiency. All I can tell noble Lords is that this Government and their policies are focused on ensuring that, at the top end, those in receipt of large incomes and with significant wealth have been by far the major contributors to the consolidation of our deficit.

[Lord Howarth of Newport]

My Lords, given the view of employers that business competitiveness requires the replacement of British jobs by new technologies at home and by low-paid jobs abroad; given the Government’s view that the rate of income tax paid by the wealthy should be cut, public services for us all should be cut and the incomes of the poor should be cut; and given that, taking these together, the effect is a reduction of demand in our economy and widening inequality in our society, how do the Government foresee growth and the fruits of that growth being shared equitably among all our people?

[Lord Deighton]

There are a significant number of issues in that question. At the heart of this Government’s economic policy is that until we are able to balance our public finances, it is extraordinarily difficult for us to grow this economy in a sustainable way. All our policies are devoted to making sure that we can consolidate our fiscal position and that the contribution to making that happen is appropriately distributed, with by far the most significant contribution coming from those who can afford most. At the bottom end of society, we have a welfare system that works on the basis of incentivising people to get back into work. I absolutely agree that jobs transform lives. The 1 million-plus private sector jobs that have been created are a welcome development in the economy.

Economy: Credit Rating

Lord Howarth of Newport Excerpts

Monday 25th February 2013 Lords Chamber

[Lord Marlesford]

My Lords—

[Lord Howarth of Newport]

My Lords, is not the situation even worse than intimated by the noble Lord, Lord Higgins? We have a state of affairs in which the markets are totally confused by the position taken by the Governor of the Bank of England and the Monetary Policy Committee and in which the Chancellor of the Exchequer has been found abjectly wanting by the witness whom he most insistently prayed in aid. What prospect is there of the Government getting a grip on this sliding situation?

Welfare Benefits Up-rating Bill

Lord Howarth of Newport Excerpts

Monday 25th February 2013 Lords Chamber

[Baroness Meacher]

I am sorry for standing up again but I want to clarify the point; otherwise we will be left with a misunderstanding. I was saying in my speech that it would be helpful to have an impact assessment of what has happened in, say, two years’ time. I agree that we cannot look at these things prospectively, so I want to clarify that. I am suggesting postponing implementation until an impact assessment can be undertaken in real terms.

[Lord Howarth of Newport]

Will the Minister acknowledge that there is abundant evidence that incidences of crime and mental illness are significantly higher in more unequal societies? Given that the tendency of the policies in the Bill will be to exacerbate inequality, is not the noble Baroness, Lady Meacher, well justified in her anxiety, and should not the Government be taking great care to examine the potential impact of these policies?

[Lord Newby]

My Lords, I have read The Spirit Level as well, but one of the best ways of dealing with inequality in society is to increase the proportion of people in work and to increase opportunities for people to get into work. I will come on to that later.

The noble Lord, Lord Forsyth, in a way answered the point of the noble Lord, Lord Low, about spending more money now. That is the argument. We get back to a macroeconomic point that if one spends a lot of borrowed money now, it will generate the kind of growth that will get us out of our difficulties. The Government reject the argument that we are in a position where we can spend our way out of recession, and it is as simple as that.

Monetary Policy Committee: Inflation

Lord Howarth of Newport Excerpts

Wednesday 13th February 2013 Lords Chamber

[Lord Deighton]

I thank my noble friend for his expert endorsement. He is absolutely right: our inflation target has served this economy extremely well. The Chancellor and the incoming governor as well as the existing governor have been clear that it would take a very high hurdle to climb over to find a better structure than the one that we currently have.

[Lord Howarth of Newport]

My Lords, particularly after the bad experiences of previous decades, this—like any—Government should always bear in mind that if we again lost control of inflation, the consequences would be impoverishing, divisive and altogether malign.

[Lord Deighton]

My Lords, I could not agree more with the noble Lord’s observation. There is nothing more insidious than inflation, which is why sticking to our inflation-targeting mandate, which the independent Monetary Policy Committee pursues with great skill and judgment, is absolutely the right thing to do.

Bank of England

Lord Howarth of Newport Excerpts

Tuesday 22nd January 2013 Lords Chamber

[Lord Newby]

My Lords, I am extremely grateful to the noble Lord. The House will be aware that under the Bank of England Act the MPC has to meet, or aim to meet, an inflation target. Subject to that, it has to aim to promote the Government’s broader economic objectives. It is worth pointing out that in the past 20 years, the vast bulk of which have been conducted under the current regime, we have had an inflation target of 2%, inflation having been one of the main economic problems facing this country over recent decades. Against a target of 2%, the outturn has been 2.1%, so it has been a pretty effective target.

[Lord Howarth of Newport]

My Lords—

[Lord Peston]

My Lords, would the Minister care to reflect on the irony of what he and government spokesmen are generally saying? The Europhobes on the government Benches are terribly upset with the idea that Brussels wants to get, and is getting, too involved in the determination of our economic policy, but is not our economic policy being driven by a quite different group—namely the credit rating agencies, which have no democratic legitimacy whatever and whose operations would not bear the slightest scrutiny if ever we were able to examine them properly? Is it not about time that the Government put the needs of our economy first and not the needs of the credit rating agencies?

Taxation: Avoidance

Lord Howarth of Newport Excerpts

Wednesday 25th July 2012 Lords Chamber

[Lord Sassoon]

My Lords, what is important is that we have a tax system that is fair and which means that those with the broadest shoulders pay the most, which is exactly what the most recent Budget did, and that we have a tax system whereby in all parts of the earning scale people are incentivised to work. That is why raising the tax threshold on the way to our target of £10,000 is one component of making a real, radical change to the tax system in this country.

[Lord Howarth of Newport]

Can the Minister tell us how much revenue is forgone in consequence of higher-rate pension tax relief? Does he consider that either fair or useful?

[Lord Sassoon]

My Lords, this is another area where we need to strike a fair balance. We need to encourage savings in this country; we need to get the savings rate up; and we need to make sure that people are incentivised to save for all eventualities, including their pensions. The noble Lord would be right to say that we and the previous Government have taken measures to ensure that there is a fair balance.

Universities: VAT on Alterations to Listed Buildings

Lord Howarth of Newport Excerpts

Thursday 5th July 2012 Lords Chamber

[Lord Sassoon]

My Lords, it will be for the universities and colleges affected to decide what they do. We have made generous transitional arrangements which give the affected institutions time to plan. Of course, the total of higher education institutions’ funding will rise during the next two to three years, so there is time for those institutions to make the necessary decisions.

[Lord Howarth of Newport]

My Lords, if the Government are to continue with the Listed Places of Worship Grant Scheme, why do they not introduce a listed places of learning grant scheme? Better still, why do they not abandon their defeatist attitude towards the European Union and reopen vigorous negotiations with the European Commission to secure a unified zero rate of VAT for both alterations and repairs to heritage buildings?

[Lord Sassoon]

My Lords, on the noble Lord’s first question, he makes the point that I would make: that the Listed Places of Worship Grant Scheme is a continuation of an existing scheme and not a new scheme that has been introduced. As regards his question on Europe, we need to abide by the VAT rules that Europe sets. Those rules very seriously constrain us, and the noble Lord makes the important point that we have to work within those constraints.

Economy: Monetary and Fiscal Policy

Lord Howarth of Newport Excerpts

Tuesday 8th November 2011 Lords Chamber

[Lord Sassoon]

My Lords, I know that it is not for me to ask the questions this afternoon, but I wonder how much more expenditure and deficit the noble Lord, Lord Kinnock, would advocate before we risk getting into interest rates that are at the level of France, let alone of Italy. Last night the UK had 2.3 per cent 10-year interest rates, and Italy had 6.6 per cent heading for 6.7 per cent. Which would the noble Lords opposite like? We will stick to our deficit reduction plan, because that is what keeps interest rates low, and that is what our households and our businesses need.

[Lord Howarth of Newport]

My Lords, if the Minister insists that there is no case for altering the configuration of monetary and fiscal policy, may I draw to his attention another suggestion? Will the Government respond positively and energetically to the proposal put forward by the Society of Pension Consultants that a proportion of the vast resources held under management by pension funds could safely and sensibly be mobilised to lift investment in infrastructure and, through appropriate provision for early access to pension lump sums, to lift personal spending?

[Lord Sassoon]

I certainly agree with the noble Lord that infrastructure is one of the themes and priorities of the forthcoming growth review. The Government are looking at encouraging anything that encourages a further source of investment into our infrastructure from pension funds and others, so I certainly take his suggestions on board.