Safeguarding in the Aid Sector

Lord Leigh of Hurley Excerpts

Tuesday 20th February 2018 Lords Chamber

[Lord Bates]

I am very happy, as I set out, that we are in contact through the National Crime Agency, which has a dedicated director looking into the aid sector more generally. One of our arguments all the way through has been that the law enforcement authorities for those alleged to be guilty of wrongdoing should be informed, whether they are in Haiti or other countries. It is absolutely right that the authorities should be informed and involved as soon as matters come to light.

[Lord Leigh of Hurley (Con)]

I remind the House that this is not the first time that large charities have brought the sector into disrepute. It was only a short time ago, your Lordships will recall, that Olive Cooke threw herself off a bridge in Bristol because she was being pursued by large charities. At the time, the then Prime Minister asked me, the noble Baroness, Lady Pitkeathley, and the noble Lord, Lord Wallace of Saltaire, to form a short, sharp committee to investigate what had happened and produce our results, which led to the formation of the Fundraising Regulator chaired by the noble Lord, Lord Grade of Yarmouth. We managed to do that in three months, unlike a long investigation. Does my noble friend agree that it is the trustees’ responsibility? The trustees need to know what is going on and the trustees need to be held accountable for the actions taking place in their charities.

[Lord Bates]

The trustees’ responsibilities are onerous, detailed and should be taken very seriously. I would expand further on that, but I am conscious that the time limit has been reached and will therefore save my further comments in writing to my noble friend.

Water: Developing Countries

Lord Leigh of Hurley Excerpts

Wednesday 24th January 2018 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I would also like to thank the noble Lord, Lord Cameron, for raising this important debate, and I welcome his opening remarks.

It is not set out in my register of interests as there is no need for me to do so, but I would like to bring to your Lordships’ attention that I work with WaterAid, mainly fundraising, and have arranged a number of events with the organisation, of which more in a minute or two. This debate is perfectly timed to assist me in that regard. I will not take your Lordships’ time in overpraising WaterAid as I believe that anyone interested in this area will be aware of the amazing and wonderful work it does, largely funded by the great generosity of the UK public, corporations and government.

Clean water is absolutely vital for people to break free from poverty, unlock their potential and change their lives for good. The noble Earl, Lord Sandwich, gave us some helpful statistics on that. We live in a world where one in 10 people are still without access to this basic essential.

The daily task of collecting water dominates the lives of millions, especially those of young girls, who are often responsible for collecting water—in fact, in nearly three-quarters of households in developing countries. Often walking long distances, girls can spend up to six hours a day collecting water, leaving little or no time to go to school, and they often miss out on their education completely. Carried on their heads, the UN Development Programme estimates that the weight of this water to be around 20 kilograms, which is about as heavy as a suitcase.

The lack of access to clean water also has a devastating impact on children’s health. Every year, 289,000 children under the age of five die due to diarrhoea caused by unsafe water and sanitation, which is more than one child every two minutes.

This is not to say that progress has not been made, because it has. The UK Government have done some incredible work, reaching 63 million people with access to water and sanitation between 2010 and 2015. However, more can always be achieved. I was very pleased to see within DfID’s single departmental plan the specific objective at point 4.2 to:

“Support poor people get sustainable access to clean water and sanitation”.


According to the World Health Organization, 844 million people still lack even a basic drinking water service and 263 million people spend more than 30 minutes per round trip to get to water. Despite the UK Government’s commitments, as the noble Earl, Lord Sandwich, mentioned, only 2% of the UK’s bilateral aid budget is invested in water and sanitation. In my opinion, this is not nearly enough. Ensuring the availability and sustainable management of water in developing countries is absolutely essential, and the UK Government should commit more resources to this. Investing in access to safe drinking water, sanitation and hygiene is one of the most cost-effective uses of the UK’s aid budget, with every £1 spent returning an average of £4 in productivity improvements. That is an impressive statistic.

To be clear, I believe the UK’s aid budget is by any standard very generous. At 0.7% of the UK’s GDP—some £13 billion—no one could say we are not doing our bit. To put this in perspective, it is more than 10% of the entire budget that we spend on the NHS in England. We want to see this aid spent carefully—hence the suggestion to focus on water, which is something that both the public and Parliament could get behind.

One small point: communities often struggle to keep services working on their own. As a result, water services often stop later down the line. The Independent Commission for Aid Impact has called on DfID to adopt sustainability checks, like USAID and the Dutch development agency do, so that water services installed will still be working even 10 years down the line.

On another matter, I understand that DfID is now working much more closely with the Foreign Office, even sharing Ministers, such as Alistair Burt. Our work helping others should receive greater recognition and we should not be in any way embarrassed about tying it into generating good will towards our country from developing countries so that they can see that flourishing capitalist market economies such as ours can be, should be and are a force for good in the world.

I also want to mention some global political aspects of water sustainability and how HM Government might help. I have been very impressed with the work of EcoPeace Middle East for some time now. Its focal programme, the Good Water Neighbors project, engages 25 communities throughout Israel, Palestine and Jordan in a united effort to rehabilitate the region’s shared water resources and to ensure that all benefit from the amazing new Israeli technologies—and, as the noble Lord, Lord Cameron, said, UK technologies—in water desalination.

Yesterday in this Chamber, the Minister assured us that there is no question of any funds from the UK taxpayer going to support terrorists in prison, but rather that in Gaza,

“We also work through UNICEF on the ground, providing water and sanitation”.—[Official Report, 23/1/18; col. 941.]


May I encourage direct action in this area by HM Government? A recent UN report concluded that the Gaza Strip, in just five more years of further under- development, will be uninhabitable, with water, sanitation and energy issues of prime concern. This has dire implications not only for the Palestinian population of Gaza but for the region as a whole. As Lara Krasnostein, the science and innovation co-ordinator at the British embassy in Israel, has written, there are viable desalination solutions to this. I hope DfID might investigate how it might assist, using the best of UK expertise, to avoid a human and environmental tragedy.

I have a couple of questions for the Minister. Will he set out whether water and sanitation will be included and fully integrated into the Department for International Development’s upcoming thematic vision documents on gender and education? I share the concern of the noble Earl, Lord Sandwich, that only 2% of the UK’s bilateral aid is spent on water. Will the Government implement the recommendations of the Independent Commission for Aid Impact, as I mentioned?

Finally, I mentioned that this debate is timely due to my connection with WaterAid. For a number of years, I have run a half-marathon for WaterAid, until last year when I needed a steroid injection in my discs. I had sworn to my family and friends—and doctor—not to do a half-marathon again, but DfID has forced me to change my mind. The offer of matched funding up to £5 million for WaterAid’s Untapped campaign to support its work in Sierra Leone and Mozambique, changing lives forever, has compelled me to reach for my trainers. I am now scheduled to do another half-marathon this very Sunday, with a target of some £50,000. My noble friend the Minister, who is one of the greatest fundraisers in this House for good causes—although over much tougher endurance tests—will be pleased to know that his department’s incentives for people to raise money do work.

Finance Bill

Lord Leigh of Hurley Excerpts

3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords & Report stage (Hansard): House of Lords
Wednesday 15th November 2017 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, this year I served on the Finance Bill Sub-Committee of the Select Committee on Economic Affairs. I congratulate the noble Lords, Lord Turnbull and Lord Hollick, and my colleagues on the committee on, and thank the special advisers who helped us so ably for, the report’s publication. I draw your Lordships’ attention to my interest in the register, not least as a member of the Institute of Chartered Accountants in England and Wales and, by something of a fluke, as a member of the Chartered Institute of Taxation. It is something of a fluke because, somehow or other, I passed the exams in 1985, to the great surprise of my teachers and colleagues at the time. Taxation post-1985 has been a bit of a mystery to me, but I have some expertise of it pre-1985.

None the less, it is particularly gratifying to debate the report at Second Reading of the Finance Bill. I served on the sub-committee when we investigated taxation on LLPs, and was very disheartened to find that none of the many recommendations we made were adopted by the previous Chancellor. I am extremely encouraged that the current Chancellor has taken a completely different approach, and is clearly listening to submissions and reports, such as the one made by your Lordships’ committee. However, it was disappointing that the Statement of 13 July thanked many members of the public, and others, for contributions, but did not recognise our report. I think we can take it that they were listening.

As considerable time and effort goes into these reports and, equally important, members of the public give their valuable time making written and oral representations, I was pleased to learn that so much of the report is being implemented in the Finance Bill and subsequent announcements. We heard from a number of witnesses worried about the impact on their businesses and from professional advisers who pointed out that their clients were simply not prepared to tackle digitalisation. As the noble Lord, Lord Turnbull, said, it was eye-opening to learn how many taxpayers and members of the public were either digitally excluded or referred to as “assisted digital”, who would need some sort of help to interact digitally with the Government. This ranged from about 30% of micro-businesses to 45% of the adult population.

Our report welcomed the Chancellor’s announcement of a delay, but made the point that it did not go far enough to allow proper testing in pilot areas, as had been planned. Overall, it must be right to encourage all businesses to go digital, but it is not clear to me that this will close the tax gap as contended, although I of course recognise that the tax gap under this Government is the lowest ever. However, the behavioural assumptions made imply that errors, when corrected, will always be in the Exchequer’s favour. I am not sure this is the case. The Chartered Institute of Taxation surveyed its members; 41% thought that the changes would have little impact on the level of their clients’ errors, and nearly 40% considered that they would increase errors, which could of course lead to a loss of Treasury revenue.

The Association of Accounting Technicians, another institute very much at the front end of helping business, was concerned that time-consuming and costly quarterly reporting requirements would result in businesses turning to the black economy. I was persuaded that the impact of quarterly reporting could substantially increase the error rate. HM Treasury and HMRC seem confident that their estimates will hold up, but I am not convinced that the pilot studies have been as extensive or as deep as they could be.

I can see that where businesses use spreadsheets rather than software, particularly where they have partial exemptions, converting the output figures into the VAT return will be a challenge. There is still time to be flexible as the regulations are not scheduled to be laid before Parliament before spring 2018, so one can only hope that HMRC is listening and talking to those affected.

I can tell noble Lords that quarterly accounting is causing great concern in the business community. To make corporate tax quarterly returns effective will need considerable work, not least in assessing accruals, identifying provisions and computating capital allowances. Is this really a constructive use of entrepreneurs’ time?

Once again, I add my voice to those who plead for tax simplification. I do not have it but there are 640-odd pages.

[Lord Campbell-Savours]

It is 664.

[Lord Leigh of Hurley]

I thank the noble Lord. That does not seem very far along the road of tax simplification. Businesses will have all sorts of challenges when MTD hits them. I hope the Government will listen to the Office of Tax Simplification, which, in its submissions to us, was clear that its opinions had not really had an impact.

It has to be said that, despite my earlier comments, HM Treasury really has by and large listened to those with genuine concerns. One can only hope that it continues in this direction of travel.

I turn my attention to a couple of other areas in the Finance Bill, not the report. I will not touch on inheritance tax, but it was extremely interesting to hear some radical views on it. I would welcome further debate in this House on taxation. It is a little disappointing that so few of your Lordships are able to speak tonight, but although we are not allowed to comment on rates, allowances and so forth, I would have thought we were allowed to comment on structures and new and radical ideas. I hope the usual channels might permit debate on this subject at a later date.

The area I will talk about relates to Clauses 48 to 59, which deal with fulfilment of third-country goods coming in to the UK via online marketplaces. This follows measures in last year’s Budget and gives HMRC much greater powers, as my noble friend Lord Bates said. I first raised this issue in an Oral Question in December 2015 and have, together with my noble friend Lord Lucas, continued to address it in a number of speeches in your Lordships’ House. Accordingly, I welcome these important clauses, but I am concerned that much greater work needs to be done. Only last month I asked in a Written Question whether HMRC obtains data on the amount of goods that non-UK sellers of the likes of Amazon and eBay import into the UK and, if so, whether HMRC reconciles that data with declared sales. The answer from my noble friend the Minister—I join my noble friend Lord Wakeham in congratulating him on his performance here and in other roles—was a little disappointing as it, shall we say, avoided, if not evaded, the question.

I have also asked whether the Government will treat Amazon as a supply chain for VAT purposes and was very encouraged by that answer. I remind my noble friend that there is nothing more irritating to UK retailers than seeing overseas, third-party, non-EU companies sell their goods into the UK without VAT, effectively undercutting UK retailers.

I do not think the importance of these clauses has been recognised. I urge my noble friend to read the written submissions by Richard Allen of vatfraud.org to the Public Accounts Committee hearing on 13 September this year. It states that the VAT registration numbers of traders on Amazon are either not being displayed, or, where they are, could be completely bogus. As a result, customs authorities are unable to police abuse. Consequently, it could be that certain internet retailers will not and should not be regarded as fit and proper fulfilment operators as defined by these clauses. There are many examples of certain internet retailers being aware of abuse and just not acting.

To the extent that Clauses 48 to 59 give HMRC great power, they are very welcome. I do not agree with the Chartered Institute of Taxation; the fact that they could be guilty of committing a criminal offence is a good thing. My concern is that there is evidence of HMRC not using its existing powers and this has now become a national issue. The level of VAT loss here is estimated by HM Treasury to be in the region of £1 billion to £1.5 billion—huge numbers. So, yes, HMRC needs to be properly resourced to pursue this, but the third parties must also share the costs as the ones who are benefiting. They now bear joint and several liability, and action is the only way to tackle this huge loss of VAT and damage to regular UK traders. It is vital that HMRC acts on these clauses and related ones, and a number of us in this House and in the other place will monitor this issue with further Written Questions and debates.

I want finally to address the clauses covering the EIS, or enterprise investment scheme, and VCTs, or venture capital trusts. The clauses in the Finance Bill largely implement previously announced changes to the scheme, but their very existence implies that the Treasury is committed to the VCT scheme and EIS. It was pleasing to see that there were no substantial changes, negatively, in the Finance Bill and I make a plea for no more dramatic changes to the VCT and EIS legislation over the next few weeks, or even days. We of course await the patient capital review, but it is clear that VCT funding is of a longer term, typically seven years, and plugs the finance gap of equity funding in the £2 million to £10 million range. Some excellent research has been done by the venture capital trust association which shows an increase in the number jobs created by VCT investees. I am aware that the Treasury does not like to see a loss of revenue, which occurs when investment is made in such businesses, but to maintain the UK’s position as one of the leading countries for start-up businesses, it would be a great shame if either of these incentives for new business and growing businesses was in any way hampered.

There are many other areas in the Bill which merit further discussion, such as tax avoidance and interest deduction by companies, but I think I have said enough for the moment and eagerly look forward to the proposals in the Budget in a couple of weeks’ time, which I hope will enable your Lordships’ Economic Affairs Finance Bill Sub-Committee to meet again and take on new and fresh challenges.

European Investment Bank

Lord Leigh of Hurley Excerpts

Tuesday 31st October 2017 Lords Chamber

[Lord Bates]

One example is the northern powerhouse fund, in partnership with the EIB, but the British Business Bank is there for precisely that purpose, as are the UK guarantees. As the Chancellor said in his Mansion House speech, we still want to explore, as part of the exiting the European Union negotiations, the possibility of our remaining part of the EIB, for the very reason the noble Lord articulates.

[Lord Leigh of Hurley (Con)]

My Lords, the European Investment Fund supplies finance to the venture capital and seed capital industry. London is widely recognised as a centre of excellence for venture capital and seed capital, but the EIF has suspended finance to a number of venture capitalists based in London. Will the Minister write to the EIF to ask why it is depriving British businesses of what is essentially British money?

[Lord Bates]

We are very clear on this. We believe that UK borrowers and companies seeking investment should continue to have equal access on that basis. That is why the Chancellor announced the establishment of the British Business Bank and that it would be increasing its threshold of ability to lend to venture capital funds as part of that. We are absolutely clear: we should have equal access while we continue to be members and continue to negotiate what the relationship will be thereafter.

Financial Services: Regulation

Lord Leigh of Hurley Excerpts

Wednesday 6th September 2017 Lords Chamber

Asked by

[Lord Leigh of Hurley]

To ask Her Majesty's Government whether it is their policy to reduce unnecessary regulation of financial services; and if so, whether they intend to review current Financial Conduct Authority practices to ascertain whether that regulator is going beyond what is appropriate and necessary to fulfil that policy.

[Lord Leigh of Hurley (Con)]

I beg leave to ask the Question standing in my name on the Order Paper and draw your Lordships’ attention to my register of interests.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, the Government are committed to reducing unnecessary regulation in the financial services industry, but also recognise the need for an effective and proportionate regulatory regime to ensure that markets function well and consumers are appropriately protected. The Government do not believe that the FCA is going beyond what is appropriate and necessary to fulfil the Government’s policy.

[Lord Leigh of Hurley]

I thank the Minister for that Answer and I draw his attention to the Queen’s Speech. I am sure he will agree that the commitment to further strengthen our resilient economy, following press reports, means that a specific review in this Parliament of the somewhat opaque policies and procedures of the FCA will be most welcome, in particular to the financial services industry.

[Lord Bates]

We have to recognise that the review that took place in light of the situation that occurred 10 years ago, with the financial crisis, necessitated a wholesale reform of consumer protection and also of the strength and stability, including the systemic strength, of the financial services industry. That was why these radical reforms were brought forward: to put consumer protection at the heart of this and to improve the conduct and authority of the mechanism by which that is done. That comes at a cost, and the cost has to be borne, ultimately, by consumers. That is one reason that it is important that the FCA pays attention, which it does, to the fact that it is required, as well as protecting consumers, to create an efficient and effective market for consumers so that they get good value for money as well as protection.