(10 years, 1 month ago)
Lords ChamberMy Lords, as noble Lords will be aware, at the G20 last year the Prime Minister had this issue at the top of the agenda, since when the OECD has produced a whole raft of measures aimed at ensuring that companies pay their fair share of tax. Noble Lords will have seen the end of what was called the “double Irish” tax avoidance scheme in Ireland, and there are currently European Commission probes against tax avoidance in the Netherlands and Luxembourg. There has been a real tightening-up in this area, which was reinforced at the recent G20 summit.
My Lords, will the Minister reflect on what he has just said? If I heard him right, he said that most government departments were paying the minimum wage and that some are considering introducing it. Was that a slip of the tongue? Surely, no government department is paying less than the minimum wage. Did he mix up the minimum wage and the living wage?
I am not sure, my Lords, but what I meant to say was that while all government departments obviously pay the minimum wage, a number are paying the living wage and we are encouraging more to do that.
(10 years, 1 month ago)
Lords ChamberMy Lords, all debt management companies themselves are required to advise on free debt management options at their first contact with a potential customer, so even when lead generators are being used there should be no cases in which people sign up for advice without having been told about the free alternatives. That is the key requirement. The circumstances that led to the banning of cold calling on mortgages a number of years ago, around the right to buy, were very different from the broader considerations that apply more generally.
My Lords, does the Minister recollect that when the announcement was made that pensioners could withdraw their pension funds, I asked him if he was aware of the spectre of cold calls every day seeking to advise people. He advised me then that there was no need to worry. Does he now accept that what is happening today, yesterday and the next day is that dozens of phone calls are being made advising people how they may access their pension pot? If the practice goes unfettered, is he aware that thousands, if not hundreds of thousands, of people will lose out very badly? Is it not now time to regulate that sort of thing?
My Lords, the easiest way to ensure that people do not get that plethora of calls is for them to sign up to the Telephone Preference Service, which will mean that they do not get the bulk of calls coming in. As far as the potential mis-selling of pensions is concerned, the FCA has a very wide remit and toolkit to deal with any potential mis-selling, and I know that it is working very hard in this area.
(10 years, 5 months ago)
Lords ChamberMy Lords, I completely agree. For many years I have been trying to persuade the financial sector to do as the medical sector does and establish a professional body of writers to try to ensure that the material that people get is comprehensible. As far as this particular process is concerned, the FCA is looking to provide a template that pensions providers will complete, which might be on as little as a single sheet of paper, that will provide the basis for the guidance that is subsequently given.
Do the Government recollect that millions of people, even today, are bombarded on a daily basis by different companies, offering help to get payment protection policies returned and so on and so forth? How will they guarantee that this new policy will not mean that we will be bombarded daily by people telling us that we must try to draw down our pensions?
My Lords, the key thing is that people get guidance from a trusted source. There will be a commonality of approach. The FCA is producing very detailed technical guidance, which everybody providing the personalised guidance will provide. I recommend that the noble Lord looks at the FCA consultation document that came out earlier in the week, which explains how it is going to do that. There is a danger that we are so concerned that things might not work that we never innovate.
(11 years, 4 months ago)
Lords ChamberMy Lords, the noble Lord, Lord Peston, is an extremely eminent economist and he knows, as a good Keynesian, that the key at this point of the cycle is the change in animal spirits—the sense to which people have confidence to invest. Animal spirits have been very significantly subdued over recent years. There is a suggestion in every single figure that we now see that they are returning to the positive. That, more than any single thing that the Government now do, will be what drives growth forward.
My Lords, the Minister has taken great comfort from the reduction in the amount of interest paid. Does he have any sympathy at all for those on fixed incomes and small and medium savers, for whom the policy of low interest rates has been quite ruinous?
I do, my Lords, but with interest rates you cannot have it both ways. You cannot have low interest rates for people who want to borrow and high interest rates for those who want to save. On balance, the Government’s view is that having had interest rates low has kept families being able to spend, compared with having higher interest rates. For example, a 1% increase in mortgage rates would have added £12 billion per year to interest payments. It would have sucked that out of the economy. If you have that kind of reduction in expenditure and the kind of diminution of growth which it entails it harms everybody, even those who are savers.
(11 years, 8 months ago)
Lords ChamberMy Lords, there is obviously a tension in respect of interest rates in that some people benefit from low interest rates and some people lose from low interest rates. It is the Government’s view that low interest rates are in the interests of the economy in promoting growth in a very difficult economic environment.
My Lords, given that the Minister was in purdah the last time I raised this issue, can he now say what the possibility is of banks being allowed to levy negative interest on savings accounts? Who will be in charge of this, as the new Governor of the Bank of England has said that he was within days of doing this in Canada? Who is going to protect savings?
My Lords, I do not think that anybody in the Bank of England and the MPC at the moment is suggesting that we move to negative interest rates.
(11 years, 9 months ago)
Lords ChamberMy Lords, when the previous Government established the independent Monetary Policy Committee, they decided not to follow the remit given to the Fed. No Chancellor since 1997 has decided to change that remit.
My Lords, has the Minister noticed that the Deputy Governor of the Bank of England has floated the idea that banks should be entitled to charge negative interest on savings? Even the new Governor of the Bank of England, when he was in Canada, was apparently within days of allowing such a policy. This would be immensely damaging to savers. Will he put this to rest, immediately and unequivocally, and say that there is no possibility of the Government sanctioning any such idea?
My Lords, an awful lot of ideas have been floated recently but the key remit for the Bank of England is set by the Chancellor. Within that, the Bank has operational independence on how it follows that remit. The remit has not changed but the Bank of England, with or without a new governor, always looks at questions in the general area of monetary activism.