Public Service Pensions

Lord Lea of Crondall Excerpts

Tuesday 20th December 2011 Lords Chamber

[Lord Sassoon]

My Lords, I am grateful to my noble friend for welcoming this deal. She rightly points out that it means that public sector workers have among the best pensions available in this country, including defined benefit schemes which are not now generally available to people entering private sector schemes. Therefore, I endorse entirely her comments in that respect.

The PCS has not agreed to put the final design of the Civil Service scheme to its executives. It is important to remember that the PCS represents fewer than 5 per cent of the members of the public service schemes and discussions will continue without it. We believe that the final deal—it is a final deal—is a good one and that the remaining unions will recommend it to their members. We are clear that what has been set out today is the Government’s final position.

My noble friend asked about the ability of members exiting a public sector employer to remain in the pension scheme under the “Fair Deal” provision. Implicit in her question was the notion that this may have wider implications. I certainly think that this opens up all sorts of possibilities, whether in relation to the mutualisation of services or the ability of people to come in and out of the public sector.

[Lord Lea of Crondall]

I echo the opening remark of the noble Baroness, Lady Kramer, in referring to the constructive nature of the recent negotiations, albeit at the eleventh hour. I hope that the Minister will take care in saying who represents 5 per cent of what. One minute he is talking about the total public sector negotiation and the next minute he picks out a statistic which is to do with the Civil Service. We ought to be very careful not to pick and mix in that particular way.

I hope that the Minister will comment on a general point: namely, now that we have reached where we have got to, it would be very useful for all of us to discourage people from going in for rhetoric such as many Members of the Minister’s party, both in this House and in the Commons, have indulged in. Their slogan can be summarised as, “Private sector employment is productive; public sector employment is unproductive”. It is not just the Daily Mail, the Daily Express, the Daily Telegraph and the Murdoch newspapers that say that—it is members of his own party in this House and the other House. I do not mean that anyone in this House tonight has said that, but it has been said on other occasions. Such comments are quite ridiculous. People will think that nurses and teachers are unproductive, and that hedge fund managers and second-hand car dealers are productive. Is it not time that, in a modern social democracy or mixed capitalist economy—I do not mind what you call it—we agreed that that is a ludicrous way of dividing people up?

That leads to the point that we must get on with improving pension provision in the private sector. The Adair Turner report on auto-enrolment has been stymied to some extent. Is it not important that we do not have a race for the bottom as regards pensions? I am glad that we have drawn back from that to some extent.

Am I not right in thinking that CPI has been selected instead of RPI because CPI has been growing more slowly in recent years? Would the Government have preferred CPI to RPI if it had been growing faster? I have been around for long enough to know that that is exactly how the Treasury thinks. I ask the Minister whether he agrees with me that there is a position in the final set of correspondence which refers to CPI plus 1.5 per cent or 1.6 per cent, and that that is the rationale for some of the arithmetic, which—understandably, given the Government’s predicament—is based on getting more in for the Treasury, hence the 3 per cent take-away.

Finally, is this not also the time to say, given the huge growth in pension pots for the top 0.1 per cent of people—which is scandalous and is getting up the nose of everyone in the country, apart from that 0.1 per cent—that the idea that we are all in this together is a bad joke, unless that issue is also addressed?

[Baroness O'Cathain]

My Lords—

[Baroness O'Cathain]

I must apologise to my noble friend for jumping up. It is just that I was slightly goaded by the noble Lord, Lord Lea of Crondall. I want to come back to him about the CPI versus RPI issue, because I have a pretty long memory, too. In the early stages of the Monetary Policy Committee and the Labour Government, there were endless discussions every month about the RPI. One of the reasons that the statisticians wanted to move to the CPI was so that they could get month-by-month comparisons with mainland Europe—the EU. That is exactly why it happened, and then it all started to go wrong. We should have a discussion off the Floor of the House and go to the Library to look at all that. It was fascinating stuff, and an enormous number of people wanted to go for the CPI, as opposed to the RPI.

[Lord Lea of Crondall]

I should be very glad to have such a discussion, but I have an even longer memory. For many years, I represented the TUC on the Retail Prices Index Advisory Committee, which was abolished by the Treasury when we made a recommendation that it did not like. The recommendation in about 1970 was that we should stick with the RPI for general purposes because—

[Lord De Mauley]

My Lords, we must move on.

[Lord Lea of Crondall]

I am quite entitled to come in for a second time within the 20 minutes. I have been asking a question. Is there not a case for looking at which index should be used, based on considerations other than which one is likely to increase more slowly than the other?

[Lord Sassoon]

My Lords, this was a negotiation between the unions and the employers. It was a choice regarding accrual rates and indexation, and the unions have expressed a preference for going for that measure of inflation, essentially as a way of funding better accrual rates. That was just the nature of the negotiations.

Independent Commission on Banking

Lord Lea of Crondall Excerpts

Monday 19th December 2011 Lords Chamber

[Lord Sassoon]

My Lords, on the tightening up of Basel III, as my noble friend puts it, the provisions around loss absorbency of 17 per cent and the bailing provisions are items that go beyond Basel. They are welcomed on a global basis. We now have to make sure that the way in which the EU implements Basel III is not only compatible with Basel III itself but allows the UK to go further for as long as the global community is entirely comfortable with that. Depositor preference requires primary legislation. In relation to primary legislation, discussion of all this and the process, the next major stage will be a White Paper, setting out in greater detail how the remaining important detailed matters will be handled in the draft legislation. The draft legislation will then come. I believe that there will be plenty of opportunity, in a staged way, for noble Lords to consider all the detail.

[Lord Lea of Crondall]

My Lords, is this what one might call the final stage in a number of statements about reform of the banking industry, following what has happened over the past four years? Is the Minister aware of the concern about this up and down the country? I welcome the Statement, with the sort of qualifications given by my noble friend Lord Eatwell.

There is great concern about accounting standards which led to false accounting regarding the state of many banks. While no one is suggesting that any senior banker should be shredded in front of his family, the fact is that there seems to be a total black hole as regards anyone taking any responsibility in the banking industry. Is that not something that still needs to be corrected?

[Lord Sassoon]

My Lords, the report today is a response to the Vickers commission’s work on the structure of banking. I fully accept the noble Lord’s reference to other matters, particularly accounting standards. The committee of this House did some extremely important work in that area. I do not pretend that we are solving everything today and accounting is another issue that I am sure Members of this House will not forget as we go forward.

EU: Member States’ Budgets

Lord Lea of Crondall Excerpts

Tuesday 29th November 2011 Lords Chamber

[Lord Sassoon]

My Lords, this country has always been party to the stability and growth pact, but as I am sure the noble Lord knows, under Protocol 15 the UK has an opt-out, which means that we have to endeavour to avoid excessive deficits but are not subject to any sanctions such as members of the euro area are. Furthermore, the UK secured particular treatment that ensures—has ensured and will ensure—that Parliament will always be allowed to scrutinise the UK’s budget ahead of the European Commission.

[Lord Lea of Crondall]

Is it not remarkable that the very same people in all parties who are always criticising the European Union for failing—lamentably, they would say—to ensure that people such as the Greeks, Portuguese, Irish and anybody you would like to mention are not meeting their commitments should now complain when we are tightening up the very scrutiny that they have been demanding? As the noble Lord, Lord Sassoon, has said, this is not just the 17 but the 27.

[Lord Sassoon]

My Lords, I am not going to say who should be complaining about what. All I would say is that the eurozone has got itself into a position where it really needs to get on and strengthen its own governance arrangements. We will do everything to encourage it to do that but we, as the UK, have a particular position that we will also protect to make sure that Parliament is able to scrutinise our budget first.

European Union Membership (Economic Implications) Bill [HL]

Lord Lea of Crondall Excerpts

Friday 25th November 2011 Lords Chamber

[Lord Willoughby de Broke]

My Lords, I join other noble Lords in thanking my noble friend Lord Pearson for introducing this debate. This is the fourth such inquiry that he has asked for and it seems perfectly reasonable to ask the Government to take a dispassionate look at the costs of our membership of the EU. The noble Lord, Lord Desai, described my noble friend as a maverick; others have sometimes been less generous, but events have shown that my noble friend the maverick has been right and the purveyors of the nonsense about our destiny being in the EU have been comprehensively shown to be wrong.

The arguments that some of us have been making over the years about the financial costs to this country of our membership remain as valid as ever. There is our annual cash tribute of £18 billion gross a year, which my noble friend mentioned, and there is the common agricultural policy. If the noble Lord, Lord Davies, were in his place, I would say that of course we would support our farmers in Britain. We did so before we joined the EU and we will do so when we leave. What we will not be doing if we leave the CAP is to support French, Italian and Greek farmers as well, and we should not do so. The common fisheries disaster and all the regulations that the noble Baroness, Lady Noakes, talked about that are hamstringing the City were deliberately introduced by Mr Barnier and the Commission, probably at the instigation of the French and the Germans, who are jealous of the preponderance of the City of London. Those are enormously damaging.

I would add one other thing which no noble Lord has mentioned yet and that is the extraordinary folly of our emissions policy as part of our renewable energy policy. It has meant that we are building an extraordinary number of very inefficient windmills over some of the most beautiful parts of the country with no benefit at all other than to the manufacturer of those windmills and with a great disbenefit to the taxpayers of this country. That is an EU-proposed measure.

[Lord Lea of Crondall]

I am grateful to the noble Lord for giving way. Is he not aware that it was Britain that at every stage pushed for tighter and tighter EU targets? It was not the other way round.

[Lord Willoughby de Broke]

I am not sure that is right. The target of 20 per cent of our energy from renewable sources by 2020 is entirely an EU target, so I cannot agree with the noble Lord on that.

I think that the penny has finally begun to drop in the City of London, and I hope that it is indeed not too late for something to be grabbed back from all this. I wonder sometimes what UKREP is doing in Brussels. This tide of regulations, directives and thousands of rules seems to come almost entirely unamended, but UKREP is supposed to be looking after our interests in Brussels. I should like to find out whether that is what it is doing. I had a quick look at its website and saw that the EU flag was right at the top, with the Union Jack being almost invisible right at the bottom. I hope that that is not a sign of its priorities.

Leaving that aside, recent events have brought this whole debate into very sharp focus. The Government must recognise, however reluctantly, that we should stand back coolly and look at the economic benefits and disbenefits of our membership. Things have gone completely pear-shaped in the euro. What was supposed to be the cement is not even holding together the tottering edifice of the EU, which seems to be falling apart by the day. It is rather a cruel spectator sport to watch the daily news bulletins to see which domino is to fall next. All that the European politburo—the so-called élite—seem to be able to do is stand on one leg and sing “Ode to Joy”. They do not seem to have an answer at all to what is happening. Surely we have now reached a tipping point. The Government must take up the challenge in this Bill and try to identify where our interests lie. As my noble friend said, it is no longer good enough to say that the benefits of our membership of the EU are self-evident. That is simply no longer the case.

Let us take a brief look at the economics. The euro, as the noble Lord, Lord Ryder, said, was always a badly flawed project. The eurozone has turned out to be an economic disaster for the weaker members. They can never compete with Germany in the same currency—there is no chance of that at all. Ireland, Greece, Portugal and Italy have gone down the pan and Spain seems to be on the brink. However, for them—this was presciently put by Mr William Hague—the euro is,

“a burning house with no exits”.

The euro has turned out to be an incendiary device—a weapon of mass economic destruction.

However, almost incredibly, there are still voices telling us that we should be in the euro. From a padded cell in Conservative Central Office just last week the noble Lord, Lord Heseltine, said that we should join the euro. Frankly, I suggest that they throw away the key. However, cheerleaders such as the noble Lord, Lord Heseltine, and others—of whom there are examples in this House—owe it to us to explain how a system that was supposed to engender prosperity and democracy has turned into the very opposite: a Caliban that is causing hatred and conflict, and turning people against their Governments and against each other. Already we have in Greece anti-German jokes, perhaps regrettably. When the EU economic task force imposed on Greece by the EU arrived, one Greek newspaper had the headline “The prison guards have arrived”. Unfortunately and unluckily, the head of that task force was a German called Mr Horst Reichenbach, who was instantly dubbed “Mr Horst Thirdreichenbach” by the Greeks. That sort of thing may be amusing to read about but it is actually a disaster when it comes to democracy and co-operation between member states and democracy in those countries.

The fact is that the economic cost is enormous, as my noble friend and others have pointed out, but the political cost also has to be looked at in this context. Do we need to be part of an organisation that is not only an economic failure but a political failure as well? Do we want to be a member of an organisation that usurps elected leaders in member states? Do we want to be in an EU that is so terrified of having a referendum that it took the elected Prime Minister of Greece behind the bike shed wherever the meeting was and forced him to resign? Do we want to be part of an organisation that hand-picks the leaders of democratic countries—the ones who can be relied on to toe the line—never mind that Monti and Papademos were willing parties to both Italy’s and Greece’s accession to the euro? Their hands are not clean on this, yet they are the people who have been put in place by the European Union. Above all, the Government need to carry out this analysis to nail, once and for all, the threats that, by disengaging from the EU, Britain will somehow be left in the slow lane and will lose its place at the top table. That is what they like to tell us. If the food at the top table is rancid—

--- Later in debate ---

[Lord Willoughby de Broke]

Yes, I shall be as brief as I possibly can be, but this is an important subject. I am sorry, but I do not feel that there is a time constraint in a Second Reading debate.

I was saying that we should not be told that we are going to be in the slow lane or removed from the top table if we are out of the EU. The noble Lord, Lord Howell, is not in his place—

[Lord Lea of Crondall]

Is it acceptable for the noble Lord to carry on speaking after that very clear advice from the government Whip, and after the position was made clear right at the start of the debate in response to the question from my noble friend, Lord Campbell-Savours?

[Lord Pearson of Rannoch]

Unless the government Whip’s advice is inadvisable.

--- Later in debate ---

[Lord Lea of Crondall]

My Lords, we are debating an interesting proposition, which is quite a good idea in some respects. But I suspect that the methodology would not be very straightforward and would itself become highly divisive. For example, many problems of quantification were illustrated in a point made a few minutes ago by the noble Lord, Lord Willoughby de Broke, who mentioned energy policy and the carbon tax regime. You can call it other names but essentially the EU has agreed that by 2020 it will collect €50 billion a year to hand over to the rest of the world in terms of adjustment finance. If our share is about 15 per cent that would come to €7.5 billion a year. In no way can that be charged against us in terms of “them costing us”, because since 1992 at Rio de Janeiro we have been the “leader in Europe” in pressing for tighter and tighter targets. This reveals some of the ambiguities of what might come up in the methodology.

Another question is how to add up apples and oranges in different sectors of the economy. The noble Lord, Lord Ahmad, has just said that the City of London is the jewel in the crown, to which I shall make two remarks. If we are the Hong Kong of Europe and that Hong Kong is the City of London—I doubt the logic of thinking that we will be in a stronger position to be the Hong Kong of Europe if we are not in Europe—what about the rest of our economy? How will we bring in the consequences for the rest of our economy if we measure the interests of the British economy only by the City of London, the jewel in the crown? I think that its role recently has been to lay hand grenades and not golden eggs. Therefore, there would be issues about methodology.

Many noble Lords have found it difficult to stick to the Bill before us. We have heard many speeches about the whole of the European exercise being a dead duck and that Britain should leave. I suppose that, if it is a dead duck and the whole thing has collapsed, there is no need to be in or out of it.

A totally separate question has been raised by noble Lords, including my noble friend Lord Stoddart, about public opinion. To think logically about this, if we believe in the impartiality of this review and it produces a positive answer in favour of staying in Europe, the job will be somehow—I know that I will be shot for saying this—to educate the British people and to find ways to ensure that they understand that the conclusions are positive. There cannot be the logic of the study suggested by the noble Lord, Lord Stoddart, without running the risk that it might produce an answer that some people do not like. But that is true of both sides. I suspect that we would find that, in the dynamics, this is a positive thing and that we have a problem with public understanding. But that is a separate question. One cannot then say, “But we ought to say no because of public opinion”. We are a democracy and of course that is an important question. However, the methodology is not to do with public opinion per se. It purports to be to do with quantitative methodology.

In the two minutes remaining, I shall echo three points which have already been made. The noble Lord, Lord Empey, made the point that we have voted for things that have happened in Europe. The Commission is not a set of gauleiters: it is the Council of Ministers which seeks agreement. As we all know, there are different procedures, including codecision, the Parliament and so on. But we can see the fallacy in the idea that Monsieur Barroso can say something and Chancellor Merkel goes down on one bended knee by just looking at yesterday’s newspapers.

We hear easy examples of countries which do splendidly without being in the EU. Switzerland and Norway are always cited. I want to spend at least 30 seconds on Norway. I have a great number of friends in Norway and I hope that they will not mind me saying that it is a sheikdom with democracy. In terms of the proportion of oil revenues to its national finances, it is not comparable at all with any other country in Europe. It has a huge sovereign fund, which is wonderfully administered and becomes a great contributor to aid to Africa, et cetera. The point that we really have to look at is that Germany is a successful economy: how they and not we?

Eurozone Crisis

Lord Lea of Crondall Excerpts

Thursday 27th October 2011 Lords Chamber

[Lord Brooke of Alverthorpe]

My Lords—

[Lord Lea of Crondall]

My Lords—

[Lord De Mauley]

My Lords, there is plenty of time. Perhaps we may hear from the noble Lord, Lord Brooke.

Living Standards

Lord Lea of Crondall Excerpts

Monday 5th September 2011 Lords Chamber

[Lord Sassoon]

Indeed, I agree with the points that my noble friend makes. The Government are working on other initiatives to help address this problem, such as driving through the entire package of tax and welfare reforms, introducing the universal credit from 2013-14 and making it pay to work. It is a terrible state of affairs that everything earned by a lone parent who works part time for 10 hours a week is immediately taken off that person through changes to their tax and benefit. Therefore, the introduction of the universal credit and driving through our reforms to tax and welfare are critical to making inroads into this problem.

[Lord Lea of Crondall]

Does the Minister recall that Mr David Cameron, during the election campaign, expressed regret about growing inequality in this country? Of course, that inequality has now accelerated. Does he not agree that the time has come for remuneration committees, which are mutual admiration societies that have been going higher and higher above the upper quartile, should be subject to a reformed company law structure, with supervisory boards and multi-stakeholders to make sure that these people cannot just go on paying themselves a fortune without any regard to the principle of greater equality?

[Lord Sassoon]

Just to be completely clear, inequality increased under the previous Government. The latest data show inequality coefficients to be flat, but it is too soon to see what the trends are under this Government. However, inequality increased under the previous Government—and that was in a decade when 40 per cent more in real terms was put into working-age benefits and tax credits, so this is a very difficult problem to crack. However, I agree with the noble Lord that it is important that informed and active shareholders make sure that they consider the split of rewards within companies between shareholders and employees—and that is precisely why it is high up the agenda of my right honourable friend the Business Secretary, who is considering proposals as we speak.

Global Economy

Lord Lea of Crondall Excerpts

Thursday 11th August 2011 Lords Chamber

[Lord Flight]

My Lords, perhaps I may suggest to the Minister that what is really damaging confidence and what has knocked stock markets is, in fact, the euro crisis. It is the perception that the economies of southern Europe and Ireland cannot recover without substantial devaluation. It is a situation analogous to that of the UK back in 1992. Broadly speaking, markets, because they cannot go for the currency, go for the bond markets. It may or may not be correct that the only solution is pan-European bonds, but the second issue is, if there is to be a pan-eurozone, it will obviously require massive ongoing transfer payments by Germany. Markets do not believe that Germany will be willing to accept such liabilities. That is the big factor damaging confidence and growth. It is the potential further banking and government debt crisis that that represents; it is people understandably moving their deposits out of banks in southern Europe because they fear they may end up with a lira or a peseta. Money supply is falling dramatically, with a 10 per cent reduction in Italy in just the past few months. That is the crisis which is having the knock-on problems for this economy—much more, I suggest to the Minister, than for the US.

[Lord Lea of Crondall]

My Lords, perhaps I may make two comments and ask two questions. First, it has already been remarked on that the Faustian pact between China and the United States over the past 10 years has been an ultimate, if not the principal, reason for slow world growth. Secondly, although the Minister dismisses so perfunctorily what my noble friend Lord Eatwell said, I suggest that he reads Hansard tomorrow, because my noble friend made a very carefully considered analysis of the world and European situation. I suspect that in terms of economic analysis my noble friend would probably get a higher mark than the Minister on the current situation.

Six months ago, I and many of us were on record as saying that all this would lead to a double dip. It is a quite different scenario from the Thatcher period when there was a reasonably good international position. The prediction of the IFS and others was that if you are going to cut £200 million-worth of output through the crash, the deficit would actually rise from 3.5 per cent in 2008 to something like 11 per cent now. That was without adding to it through austerity measures. We are talking as if austerity measures apply to all circumstances.

My first question is: will the Minister, the noble Lord, Lord Sassoon, consider inviting Chancellor Merkel over here to give her a personal tour of Britain to show her how a modern economy can best succeed—an economy where manufacturing all around works at the rate of Siemens and BMW?

[Lord Foulkes of Cumnock]

This is irony.

[Lord Lea of Crondall]

I had better spell it out as sometimes it does not get across.

That tour could demonstrate that the higher economic growth rate in Britain than in Germany could help solve the German problem. I have a second question arising from that. My noble friends will not be aware of this but I asked a Written Question about the relative position of German multinationals and Britain’s multinationals and the proportion of value added in Germany and Britain, the home country. It is pretty obvious from the FT Global 500 employment figures that Germany, which has only about half the number of multinationals as Britain, is miles more successful. Employment in Germany—that is the value added as a proportion of the German economy—is far, far higher than in British multinationals.

My question, which I shall repeat, asked the Government to give me the statistics. I had the most perfunctory reply in one sentence from the noble Lord, Lord Sassoon, that the Government are not interested in such statistics and that it was not their job to collect them. The Department for Business knows what the figures are, and the relative value added of our multinationals in Britain and the relative value added of multinationals in Germany. Will the Minister today say that he will look at the matter more carefully and give me, the House and the Library a less perfunctory answer?

[Lord Cotter]

My Lords, we all recognise the need for growth in the economy. The Statement repeated by the Minister today said that we have to work hard to have a private sector that competes, invests and exports. In the light of that and the need for growth, I refer to a report in the Financial Times today. It indicates there has been a flood of applications from other parts of the country for investment funds backed by the state available in the northern part of England. In some cases, it is one in 10 and in some cases, in Yorkshire, one-fifth. That flood of applications indicates strongly that small and medium-sized businesses are desperate for scarce loans and equity funding, which they cannot obtain because they do not come from that part of the country. Can the Government do more to help?

I ask once again, as did my colleagues and noble friends, Lord Oakeshott and Lady Kramer, whether the Government will take on board that that highlights the struggle that small businesses in particular are having to get funding from banks because of high prices, costs and tougher covenants. This is a nation of small businesses. We read the report in the FT today that there is a great demand and wish for funding but it does not seem to be available.

Greece: Default Contingency

Lord Lea of Crondall Excerpts

Monday 20th June 2011 Lords Chamber

[Lord Sassoon]

I certainly agree with my noble friend that the last thing anyone wants is disorder, whether default or anything else. As I made clear, the next steps are, first, a question for the eurozone itself. We are not directly involved in the eurozone discussions. To address my noble friend’s point, the statement from the euro group today reads:

“Ministers agreed that the required additional funding will be financed through both official and private sources and welcome the pursuit of voluntary private sector involvement in the form of informal and voluntary roll-overs of existing Greek debt at maturity for a substantial reduction of the required year-by-year funding within the programme, while avoiding a selective default for Greece”.

As I said, that is a matter for the eurozone Ministers, but I think that they are addressing the issue in the way that my noble friend suggests.

[Lord Lea of Crondall]

Would the Minister care to remind the House of the percentage of, first, the euro area, and, secondly, of the European Economic Area, of which we are a part, which is constituted by the Greek economy? I would not say that it is peanuts, but is it not a rather low percentage? If Europe wished to, could it not help to restructure the Greek economy—with stringent terms, by the way? Would not the whole House stand behind that policy agreed around Europe and say that we want it to work—God’s speed, we want it to work? Are there not some Members of the House who do not want it to work?

[Lord Sassoon]

I am happy to confirm that Greece is a relatively small part of the euro area but, as we have already identified this afternoon, Greece is interconnected, as are all the European and global financial markets. Therefore, one should not in any way trivialise the Greek situation and the capacity for difficulties in the markets.

That said, it is also important to be clear about the lines around whether the UK should or should not be involved in these matters. We are not a member of the eurozone; we are not going into the eurozone; and we are not going to make any preparations to enter the eurozone in the lifetime of this Government, this Parliament. We must make sure that, on the one hand, we are not part of any ongoing and permanent support mechanism for the eurozone; at the same time, we have to play a full part to ensure that the eurozone economic governance is fit for purpose.

Banks: Cheques

Lord Lea of Crondall Excerpts

Monday 6th June 2011 Lords Chamber

[Lord McFall of Alcluith]

My Lords—

[Lord Lea of Crondall]

My Lords—

[Baroness Kramer]

My Lords, as the Minister will know, Germany has already withdrawn cheques from general use. I called German relatives to ask how they deal with payments that they either do not wish to make online or cannot make online, and the answer was to keep a lot of cash at home and in your pocket. Given the vulnerability of people and our whole desire to move away from cash being in the home or on people who are frail and potentially at risk, will he make sure that the Payments Council understands that this is not one of the answers?

EU: Budget

Lord Lea of Crondall Excerpts

Monday 16th May 2011 Lords Chamber

[Lord Sassoon]

My Lords, I completely agree with the need to invest in infrastructure in this country, which is why we launched the first ever national infrastructure plan last autumn, at the beginning of our suite of pro-growth policies. Approximately £40 billion to £50 billion will be invested in the UK's infrastructure each year over the next five years. As to the European budget, it is quite right that we should make our contribution; but it is completely wrong that the previous Government gave away a significant part of the UK's rebate. The European Commission's figures show that in this year alone, the amount of rebate given away by the previous Government in 2005 will cost us £1.98 billion. As the result of the action that my right honourable friends the Prime Minister and the Chancellor took in reducing by half the increase this year, we clawed back £350 million at the December decision. That is the scale of the challenge we face.

[Lord Lea of Crondall]

My Lords, would the Minister care to remind us of the size of the EU budget as a percentage of the gross product of the whole of the EU? Will he confirm that the percentage is roughly the same as it has been for some years?

[Lord Sassoon]

My Lords, there are various ways of peeling that onion, but there is indeed a maximum limit of 1.3 per cent, or thereabouts, of European GNI, and a sub-limit in the current financial perspective of about 1 per cent of European GNI. However, those numbers leave considerable latitude for headroom, and the regrettable fact is that that permits the annual budget to go up, if we do not restrain it, by more than inflation year-on-year. Regrettably, there is not enough constraint on total expenditure and it can rise if we are not vigilantly on the case, as this Government are.