Queen’s Speech

Lord Palmer Excerpts

Wednesday 25th May 2016 Lords Chamber

[Lord Palmer (CB)]

My Lords, I am delighted and honoured to congratulate the right reverend Prelate the Bishop of Newcastle. My only qualification in doing so is that I live just 10 miles out of her wild and wonderful diocese just across the border from her most northern outpost in Berwick-upon-Tweed. Her diocese could not be more different from her last post in Lewisham. As she said, her predecessor was a much-loved, respected and active Member of this House and I feel certain that she will follow in his illustrious footsteps.

The right reverend Prelate has long been influential in Church of England legislation and, coincidentally, I discovered an hour ago that she was ordained in the same year as my female first cousin. We share the same year of birth and I greatly admire the way that she has completed successfully the London Marathon no fewer than three times. Now that she lives in the north, she will have further opportunities to take part in the Great North Run. It was a real pleasure to listen to her pearls of wisdom, and on behalf of the whole House I congratulate her most sincerely on a first-rate contribution this afternoon.

[Noble Lords]

Hear, hear.

[Lord Palmer]

If I were to declare all my interests, it would take up all of my advisory time. I therefore refer noble Lords to the register of interests. I was distressed that there was no mention of agriculture in the topics to be debated in the gracious Speech. I have been involved in the food industry all my walking life—Hansard, please take note. I try to farm in the most beautiful part of the United Kingdom, the Scottish Borders. I took on a staff of 17 and I am now farming a bigger acreage with just three men, all of whom were born and brought up on the farm. We live in a crazy agricultural environment, with bottled water being more expensive than milk. This is surely utter madness.

From 1986 to 1991, I was appointed to represent Scotland on the European Landowners’ Organisation. I was never quite sure why, but I did live and work in Belgium for three years and I have seen how the European Union works. I am often asked how I will vote in this dreaded referendum and I have replied so far that I change my mind every five minutes. I fear that I am not alone. I believe strongly that the Union worked well when its membership was smaller, but now, with 28 members, it is far too unruly—and how on earth can it evolve a policy or policies that apply to the Greek islands and the Outer Hebrides, both with such different climates, let alone cultures? I believe strongly that there is a strong case to get rid of the Union altogether—but that is another story.

The commissioners are unelected and accountable to no one. When they retire, they get huge pensions, and if they are British, they are more than likely to end up with a seat in your Lordships’ House. That is not an indictment of the individual but of the actual system. It is also an utter scandal that the Commission decamps from Brussels once a month to Strasbourg.

The distribution of the single farm payment to farmers in England and Wales, and indeed Scotland, is another unacceptable scandal. It is causing real hardship for those of us who are affected. My children reminded me that 25 years ago the telephone rang constantly during lunch at harvest time and I was once offered all those years ago £165 a tonne for low-nitrogen malting barley. Oh, to be offered that for this harvest. Wages have gone up by 193%, while inputs across the board have more than doubled in those 25 years. While I accept that yields per acre have gone up slightly since then, the right weather at the right time can make up to a tonne per acre difference. That is not good management; it is pure luck.

I have a friend who telephones me on Christmas Day to ask if we have started the harvest. The difference between conditions north and south are huge, and in my part of the world, grain drying costs greatly exceed those for farmers in the fertile Thames Valley, where I was born and brought up. It is too early to tell what effect the new living wage is going to have on commodity prices and I know that this is a great worry for many of those involved in the agriculture and horticulture industries, especially—this is a very important point—those who signed contracts with retailers before the new living wage was introduced. I fear that it could well prove to be disastrous for many.

Food today is incredibly cheap. Fifty years ago, 40% of the national wage went on food, while today it is just 11.1%—a huge difference. We now have strong scientific evidence from the president of the UK science body, the Royal Society, that GM crops do not endanger every living human and plant, and I urge Her Majesty’s Government to pursue the future of GM crops with the same vigour as China and the United States have done for the last 20 years.

I turn finally to energy, and here I declare an interest as co-chair of the All-Party Parliamentary Group on Energy Costs. When I was last in the United States of America, I had the chance to have a teach-in from one of the largest Texan frackers. If fracking is undertaken under a very strict code of conduct, as indeed it is in Texas, I am utterly convinced that it will be a safe and reliable source of energy for future generations. It is pleasing that the green light has been given to fracking in North Yorkshire.

In many ways, energy and the environment are facing challenging times and I hope that the Government will seize these opportunities before it is too late.

[Viscount Younger of Leckie (Con)]

My Lords, it may be helpful for the House to be reminded of the advisory speaking time of six minutes for today’s debate. If noble Lords adhere to the time, the House may be expected to rise at or around 10 pm.

Care Sector: Minimum Wage

Lord Palmer Excerpts

Wednesday 27th November 2013 Lords Chamber

[Lord Newby]

I agree with the noble Lord; the Government encourage employers to pay the living wage. However, another thing we are doing is that my colleague Vince Cable has asked the Low Pay Commission to see what scope there is for increasing the minimum wage beyond the rate of inflation without having a significant negative impact on jobs.

[Lord Palmer (CB)]

My Lords, how many actual prosecutions have there been of those who failed to comply with this legislation?

Air Passenger Duty

Lord Palmer Excerpts

Monday 28th January 2013 Lords Chamber

Tabled By

[Lord Palmer]

To ask Her Majesty’s Government what plans they have for the future of Air Passenger Duty.

[Lord Palmer]

My Lords, I am grateful for the opportunity to raise an issue that I know vexes many in this House and puts significant burdens both on British business and ordinary families. I must declare my interests. I open my home in Berwickshire to the public and I am a residual beneficiary of a banana plantation on St Lucia.

Air passenger duty has become an increasingly contentious issue over recent years and it is worth reflecting on the reasons. When it was first introduced back in 1994, the maximum that any passenger paid in air passenger taxes on departing a UK airport was just £10, and for those flying short haul it was half that. But, as is often the way with these things, once a tax has been established it is almost impossible for the Treasury not to resist the temptation to find ways to increase it—and what a truly astounding increase we have seen. From that modest beginning, the tax is now generating almost £3 billion each year for the Treasury and costing passengers who pay the highest rate more than £180 in tax alone for a single journey.

Some of the most dramatic increases have been introduced in the past decade. In 2006, a family of four flying to Florida paid £80 in APD—still a significant additional cost on a summer vacation but nothing compared with the £260 they now pay to fly to North America. That is an increase of 225% in just six years. Following the Chancellor’s Autumn Statement, we now have confirmation that APD is set to rise again in April. I offer this example because it illustrates just how rapid the increases have been and explains why there is a growing concern about its impact not just on families, but perhaps more importantly, on the UK’s business community. Indeed, there is a growing body of evidence that points to the damage the tax is having on jobs, growth and in various regions of the economy with various estimates, for example, that more than 90,000 additional jobs could be created were it to be scrapped.

It is tempting to say that the tax should be significantly scaled down. After all, we levy the highest APD anywhere in the world. We are one of only six EU countries to levy APD, the others having recognised the damage such a tax inflicts on economic growth.

As an island nation we depend on inbound air travel to carry three-quarters of overseas tourists into the United Kingdom. Yet, the World Economic Forum’s tourism competitiveness report ranked the UK 134th out of 138 countries for air ticket taxes and airport charges.

I could go on, but today I am merely asking not for the abolition of APD, not for a reduction of APD; not even for it to be frozen. I am simply asking Her Majesty’s Government to review the tax: a proper macroeconomic impact assessment into APD across the whole of the UK economy. That is all. No spending commitment implied, just good old-fashioned evidence-based policy-making.

The reason for this is quite simple: there is a growing body of evidence that points to the profoundly damaging impact of APD on our economy. Among the most compelling research that I have seen includes data from the British Chambers of Commerce which estimates that were APD to be increased by 5% in real terms every year—admittedly less than this year’s rise—there could be a loss to the economy of £3 billion by 2020. They add that this effect could reach £100 billion by 2030.

The World Travel and Tourism Council has estimated that removing APD altogether would result in an additional 91,000 British jobs being created and £4.2 billion being added to the economy in just 12 months.

Just as compelling is the documented damage that we know the tax is already having on airports and airlines across the UK. To give just one example: the BCC in a recent report states that, following the doubling of APD in 2007 and its subsequent rises, Liverpool’s John Lennon Airport has lost six domestic, five European and two long-haul services.

I strongly believe that Her Majesty's Government must take this grave situation into account. It is no wonder that this tax—which started out so modestly—is now one of the most hated indirect taxes that the Government levy, along with capital gains tax and inheritance tax. Indeed, part of the reason I wanted to raise this issue tonight is precisely because of the growing public anger at the tax, with which colleagues in the other place will be much more familiar

Last summer, an incredible 200,000 people wrote to their local MP asking for the Treasury to review the tax—as I am asking now. In addition to this, 100 MPs have publicly stated their support for a comprehensive Treasury review. The APPG on Aviation has also called for a review. Even senior members of the party, such as one of its former leaders, have joined the growing chorus of voices who back this. In other words, this is not the preserve of a few low-tax puritans—it has gained genuine cross-party support.

As expected, this proposal has been supported and championed from the tourism and aviation industry. Indeed, A Fair Tax on Flying, whose research and tireless campaigning have helped bring this issue to the attention of policymakers and the media alike, deserves to be praised for its work. This tide of support is irresistible—or so one would think. The Government have been—I know that the noble Lord, Lord Newby, likes his cricket—playing a rather repetitive game of forward defensive on this, if I am being kind, or stonewalling, if I am being a little more honest.

In almost all their responses to the request for a review—both to constituents and to MPs—the Treasury has, I am afraid, claimed that an impact assessment has already been carried out. Its response to the honourable Member for Crawley on 19 October is typical. He asked what research the Treasury has conducted to assess the impact of APD on the economy. He was told by the honourable Member for Bromsgrove, a Treasury Minister:

“Given that we recently completed a comprehensive consultation on the subject, we have no plans for further review”.—[Official Report, Commons, 19/10/12; col. 536W.]

There are plenty of other similar responses to very similar inquiries, yet there has never been such a consultation. It is a great phantom that has been created by the Treasury—a wonderful piece of misdirection of which the illusionist Derren Brown would be proud.

The fact is that the oft-cited 2011 consultation was to look at the merits of changing the banding of APD—a completely separate issue—and did absolutely nothing to review the macroeconomic impact of the tax. Indeed, even when they had this opportunity, the Government failed to address the gross unfairness of the banding structure. It is quite ridiculous that APD to the Caribbean—which is 6,000 miles from London—should be considerably more expensive than APD levied on passengers travelling to Hawaii, which is 10,000 miles from the United Kingdom.

I implore the Minister not to play the forward defensive on this. Perhaps he might consider playing to the stands and pavilion and giving the 200,000 constituents what they have asked for: a comprehensive review of APD.

On a more positive note, I am in fact supportive of one of the Government's increases in APD to finally, at long last, levy the tax on private jets—an omission that was an affront to reason and fairness, and was long overdue. It has taken 19 years since the introduction of APD for this change to be adopted. Can the Minister assure us today we will not have to wait another 19 years before the Government undertake a review of APD?

All the evidence suggests that our economy and the UK’s international competitiveness are being strangled by APD. If we want to send the message that the UK is open for business then I can think of no more damaging or perverse policies than year-on-year rises in this tax, making it prohibitively expensive for inbound tourists and overseas business travellers to come to Britain to spend their money and to do business —precisely the things we surely need to help grow our economy.

I urge the Minister to make representations to the Chancellor ahead of this year’s Budget. Surely a wise Government would accept that sometimes having money in the Treasury’s coffers instead of circulating around the economy has a damaging overall impact. A really comprehensive review would at least provide us with that evidence.

I hope that the noble Lord can offer us more today than his Treasury colleagues in the other place have been able to do thus far, and I look forward to his response.

Tobacco: Smuggling

Lord Palmer Excerpts

Thursday 26th April 2012 Lords Chamber

[Lord Sassoon]

My Lords, the strategy has many different strands. The Government issued a comprehensive tobacco smuggling strategy in April 2011. Specifically, £25 million of HMRC’s total expenditure on tax avoidance is going in this area. It has to be said that over the past decade, the illicit market in cigarettes has come down from 21 per cent of the market in 2000 to 10 per cent in 2009-10. As I am sure the noble Lord knows, very significant progress has been made, and the Government are fully committed to continuing with that. On the other side, there is the tobacco control plan to make smoking less affordable. The noble Lord, Lord Dubs, is quite right regularly to press on this. It is a multi-layered strategy, and the present Government will continue to press on all aspects of this challenge.

[Lord Palmer]

My Lords, is the noble Lord aware that if plain packaging is introduced, as is threatened, this will increase the amount of tobacco smuggled? I declare an interest as convenor of the Lords and Commons Cigar Club.

[Lord Sassoon]

My Lords, that is a helpful contribution to the consultation about plain packaging. These issues are all interrelated and we need to consider the second-order effects.

Taxation: Healthcare Insurance

Lord Palmer Excerpts

Thursday 9th June 2011 Lords Chamber

[Lord Sassoon]

I am grateful to my noble friend for allowing me to say again that we have absolutely no plans to introduce any such change to the benefit-in-kind rules or to the way in which private healthcare interrelates with the NHS.

[Lord Palmer]

My Lords, is that not a terrible shame? In order to ease the pressure on the National Health Service, would it not make sense, particularly for those who are self-employed, to allow their health insurance premiums to be offset against their income tax?

[Lord Sassoon]

As I have explained, to date I have seen no evidence that leads to that conclusion. The Treasury has done no detailed studies on the matter.

Air Passenger Duty

Lord Palmer Excerpts

Tuesday 11th January 2011 Lords Chamber

[Lord Sassoon]

My Lords, I do not believe that the tourist industry will be either surprised or disappointed because I have merely restated that we are consulting a wide range of stakeholders and listening to views of the tourist organisations, among others. On UK competitiveness, it is important to see the APD in the wider context. For example, we do not levy the APD on transit or transfer passengers. As the noble Lord, Lord Borrie, points out, other countries are introducing similar taxes—Germany introduced a similar tax on 1 January. In the wider context of competitiveness, the Government are reducing corporation tax very significantly from 28 to 24 per cent over four years from April 2011. If we talk about competitiveness, we should look at it in a much wider context.

[Lord Palmer]

My Lords, can the Minister explain why those in private jets are not subject to APD? This might be a very good point for his consultation paper.

[Lord Sassoon]

My Lords, I am listening hard to points that are raised this afternoon. Although I cannot tell noble Lords where the consultation will get to, I am very happy to listen to points, including that made by the noble Lord.