Tax: Aggressive Tax Avoidance

Debate between Lord Peston and Lord Barnett

Wednesday 9th July 2014 Lords Chamber

[Lord Barnett]

To ask Her Majesty’s Government what is their definition of aggressive tax avoidance; and what specific examples they can instance.

[Lord Peston (Lab)]

My Lords, on behalf of my noble friend Lord Barnett, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

Financial Services Bill

Debate between Lord Peston and Lord Barnett

Wednesday 5th December 2012 Lords Chamber

[Lord Barnett]

My Lords, the amendment relates to something originally in the Bank of England Act 1998 which should not have been there in the first place. My noble friend Lord Peston and I tried very hard for it not to be put in but failed at the time. I hope that we will be more successful today.

The words “subject to that” should never have been there in the first place. All they mean is that the Governor of the Bank of England—and we will have a new one next July—will have his hands tied fast. He must first get stability—that is, control inflation—and only then can he look at the Government’s economic policy. Frankly, I would prefer that he looked at someone else’s economic policy than that of the present Government because I am not very happy with it. However, that is how it should be: the governor should look at the Government’s economic policy—and given what we heard in the Autumn Statement, someone else certainly needs to look at the situation and at this Government’s economic policy.

The new governor may be as good as everyone says—I hope he is—but I think what he can do with the economy has been massively overstated because that is primarily the responsibility of the Chancellor of the Exchequer. Sadly, the present Chancellor—whose first line in the Autumn Statement should have been an apology—has said everything is marvellous. It is hard to believe that anyone could do that, but the Chancellor did it.

It would help if the new governor had at least a responsibility to look at the economy to see whether he can help the Chancellor. It would be helpful to the Government to have the words deleted and that is all I am seeking to do. I shall not take up any more of the House’s time. I beg to move.

[Lord Peston]

My Lords, I wish to add two or three remarks to what my noble friend Lord Barnett has said.

On any logical grounds, “equal weight” is precisely what the Government would want to see in this part of the Bill. One feels that somehow the computer got jammed and “subject to that” got stuck in all over the place for no good reason. I would be surprised if the Minister is not sympathetic to the amendment.

I wish to make two remarks in regard to the prospective governor. First, I know that he felt it was right for him to appear before the Treasury Select Committee in the other place in order that its members should know who he was. Bearing in mind the vast amount of work that noble Lords have put in to this Bill, which is devoted overwhelmingly to the Bank of England, and given that, with much regret, we will be dealing some day with a Bill about the Bank of England without the Minister being the lead figure, I would like to go on record as saying that it would be a good idea if the prospective Governor of the Bank of England appeared before your Lordships’ Economic Affairs Committee so that he could become known to us as well as to the other place.

My second remark is in favour of the prospective governor. Eyebrows have been raised that he is being paid approximately £600,000 for this job, which is a lot of money—certainly to an impoverished ex-professor. None the less, given that the prospective governor could earn between £10 million and £15 million per annum—most of which, I would guess, would end up being tax-free—someone ought to reassure him that, if anything, we are getting a bargain and he is doing us a favour rather than us doing him a favour by appointing him.

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[Lord Peston]

My Lords, I start by congratulating my noble friend Lord Mitchell and the noble Lord, Lord Sassoon, on a very great achievement. However, as everybody seems to understand the amendment in every way except for me, I have three questions in case I have misunderstood what the noble Lord said.

I read the amendment as saying that it gives the FCA the power to do all the things that we want it to do. However, I was not very clear whether he was then saying that, under its consumer protection mandate, it follows immediately that it must exercise that power. This is our favourite “may” and “must” question. You can give someone power but they may not use it. However, am I right in understanding that this amendment, coupled with the whole of the rest of the remit for the FCA, essentially means that it will now have to go into this field and deal with it in the way suggested, or is it still up to it whether it bothers with it? I would like the answer to that question.

The second question we had—if we recall our little debate on this last week—was on the concept of transparency. The great reason why this is a racket is of course that the average consumer/borrower who is not an expert in this field does not know until he has signed up what he is signing up for. Am I right in assuming that this amendment will make sure that the one thing that would happen as a result of this—do not let us worry for the moment about bankruptcy and all that for these firms—is that consumers will definitely know what they are letting themselves in for? Certainly my attempt to look up at least one site on this showed that you do not get to what you are letting yourself in for until you are virtually locked in. Am I right that this amendment is both transparent in general and also transparent with regard to what you have let yourself in for?

I do not say this in a negative way in terms of saying we do not want this; this is a tremendous achievement. I am looking for a bit of enlightenment to make sure that I understand what it means.

[Lord Barnett]

My Lords, perhaps I may add to what my noble friend Lord Peston has said. I will not repeat the may/must argument; it has been well enough made, and I hope that we will get a reply from the noble Lord, Lord Sassoon. Incidentally, in congratulating my noble friend Lord Mitchell, perhaps it is right that I should also congratulate the noble Lord, Lord Sassoon. This may be our last exchange before he retires.

The noble Lord, Lord Sassoon, mentioned the assumption that the FCA will now have the powers to deal with these unscrupulous people regarding payday loan schemes. As my noble friend Lord Mitchell said, they will have lots of good lawyers because when people have many profits to defend, as they do, they tend to use lots of lawyers. While I am not a lawyer, I hope that the noble Lord’s lawyers have indeed drafted this correctly. I know that these things can never be done tightly enough and that once lawyers get involved it finishes up in the courts for somebody else to decide. That is bound to happen and I am not blaming the noble Lord, Lord Sassoon, or his legal advisers for it. In my experience, when court actions involve lawyers on two sides in major cases, both advise their clients that they are right and that they should go to court about it. That becomes very expensive and they eventually resolve it only in the court.

As the noble Lord, Lord Sassoon, said, although he is confident about this provision, it is nevertheless not a silver bullet. Does he think that the advice he has been given will result over the next few months or weeks in the lawyers worrying about it? At the end of the day, will we require secondary legislation to deal with this? I hope not—I hope that the lawyers have it absolutely right this time. However, as the noble Lord said, one of the worries is the law of unintended consequences.

This is such a complex area but I like the point that my noble friend Lord Mitchell made about what happens in, I think, Canada.

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[Lord Barnett]

I understand that I must not do that, so I will mention the question that I would have asked him. There are going to be investigations into the LIBOR scandal. Will they include looking in detail at whether there is anybody else liable or culpable in this regard? It clearly is a scandal of its own to say that nobody knew anything about it. I will leave it at that. I hope that the Government will produce sensible secondary legislation in the way we hope when we pass this Bill.

[Lord Peston]

My Lords, I will make a brief personal remark to the noble Lord, Lord Sassoon, who I believe is about to retire as a Minister after the passage of the Bill. My words are those that David Ricardo wrote to Thomas Malthus in the very last letter he wrote to him:

“And now, my dear Malthus, I have done. Like other disputants, after much discussion we each retain our own opinions. These discussions, however, never influence our friendship; I should not like you more than I do if you agreed in opinion with me”.

I hope that he will accept that message.

Financial Services Bill

Debate between Lord Peston and Lord Barnett

Monday 26th November 2012 Lords Chamber

[Lord Barnett]

My Lords, this whole section implies that the regulator is not necessarily the OFT. I thought that the regulator of the Competition Commission was the OFT. I am now totally bemused as to whether the OFT or the FCA is the main regulator.

[Lord Peston]

The FCA is the regulator.

[Lord Barnett]

The FCA is the regulator but the OFT is referred to throughout this section of the Bill. Now, under new Section 140A, we have the FCA as well. This new section is headed, “Interpretation”, which should be interpreting for us—although I am blessed if I am interpreted in that sense. Consultation between the bodies must be sensible. I assumed that that would happen and I assume that the Minister will tell us that this amendment again is unnecessary and therefore should not be in the Bill. The officials should reply to this debate because only they understand what is being talked about because they drafted it. I assume that the Minister was not responsible for the drafting: he has enough to do without drafting a Bill of this size.

Who is the regulator here? If it is the FCA, what is the OFT doing? Perhaps the Minister will tell us. Who is the lead regulator? Is it the FCA, as is implied here, or the OFT? I am totally confused but, no doubt, he will be able to explain everything because it is written there in front of him.

Financial Services Bill

Debate between Lord Peston and Lord Barnett

Wednesday 24th October 2012 Lords Chamber

[Lord Peston]

My Lords, I hope that I have heard the gist of what the noble Baroness was trying to say. She ended by asking the fundamental question, which is not only what Clause 64 is here for but what this whole section of the Bill is here for. That is not very clear. If these powers had been enshrined in statute, are we to believe that the catastrophes of the recent past would not have occurred? Is that the purpose? I cannot believe that you do investigations to prevent a catastrophe occurring; what you do is intervene and stop it. This section must therefore be there simply to say, “Look, we made a mess of things, including ourselves as policymakers and regulators, so we’re setting up this inquiry to discover what we can learn from the mess that we’ve got ourselves involved with”. I take it that that is probably the answer to the noble Baroness’s question but, like her, I look forward to hearing what the Minister has to say.

[Lord Barnett]

As I originally put down the first “may” or “must” group of amendments, together with my noble friend Lord Peston, I have some sympathy with the noble Baroness. We were told by the Minister—I forget whether it was on the sixth, seventh or eighth day—that he had asked his officials to go through the whole Bill for the mays and musts to see which were appropriate. Knowing Treasury officials, I am sure that they will have come back with something to say whether they thought a “may” should be changed to a “must”. Was this group included in that? Perhaps the Minister could tell us. It looks as though the noble Baroness is quite right and that this is one of those occasions where the word should be “must”. I would welcome the Minister’s reply. My own experience of the thinking of Treasury officials goes back too far for me to be sure, as I last took advice from Treasury officials more than 30 years ago and I may have forgotten a bit about how they operate. However, I am sure that they are still as good today as they were then, and I would welcome the Minister telling us what they came back with to his request.

Financial Services Bill

Debate between Lord Peston and Lord Barnett

Tuesday 10th July 2012 Lords Chamber

[Lord Barnett]

Apart from the slight slip, I agree with everything my noble friend said. Indeed, I would say that it is not the only major mistake in this Bill. There are lots of major mistakes; indeed, there is total confusion. My noble friend has referred to only part of it. The plain fact is that when he talked about the FCA or the FPC, I was not quite sure which one we were talking about. There is also the PRA, which I forgot to mention. The macroprudential is also very important. I do not know where it fits into all this and where the responsibility will lie. To say that it is confusing is to put it mildly. As I have said before, this Bill is a dog’s breakfast—I think that is the phrase. This Joint Committee that is being set up—perhaps the noble Lord can tell us when—was supposed to deal with everything very quickly. However, we are rising in a couple of weeks’ time, and if the Joint Committee is not set up soon it will be October before it is. Perhaps the noble Lord knows, because he knows everything about this Bill.

The plain fact is that responsibility ultimately rests with the Treasury. On the previous group of amendments, we were told that the Treasury will issue another document. The one thing we are not short of on this Bill is documents. We have two huge volumes, one with the schedules and one with the clauses, plus Treasury amendments and all kinds of working papers. Frankly, if my noble friend is confused, anyone involved with this Bill is bound to be confused because it is totally confusing. I hope that the Minister will be able to reply comprehensively about how the whole thing will work and where the responsibility lies. I assume that ultimately it will lie with the Treasury, not with the FCA or the PRA or whoever. Who else will be responsible for financial stability? It must be the Treasury. No doubt, the Minister will be able to tell us. I strongly support my noble friend.

[Lord Peston]

My Lords, first, I support my noble friend Lord Barnett in his remarks about this Joint Committee of both Houses, about which we had a great row last week and were even divided on. We would certainly like to know when it will be set up and when it will appear in detail in the business statement. Having said that, I have two or three questions.

My noble friend is quite right to use the word “experiment”, but I hope he will agree that the whole Bill is an experiment. We have not had anything like this placed before us in this form, certainly in my quarter of a century here. That does not mean that it is an experiment that should not take place, but it does mean that we must be immensely careful when it comes to implementation. In particular, the one thing that we do not want to do is what I am afraid all Governments do: look at the past and then repeat the errors of the past willy-nilly. This is not a party political point; it is part of the nature of our political system. We need to make absolutely certain that we do not repeat the errors of the past.

One slight point which my noble friend knows I will disagree on is the phrase,

“subject to scrutiny by the Treasury Select Committee”.

I would always want to add “and the Economic Affairs Committee of your Lordships’ House”, but again we have had that argument before, and the cliché “flogging dead horses” is not my stock in trade.

What troubles me much more is that I cannot see how what is said in the Bill does not lead to clashes with the MPC and what it seeks to do. There is an enormous blurred area of who is responsible for what. After all, if one knows any monetary economics, one knows that the MPC’s role is certainly to produce financial stability. That is the whole point of a correct monetary framework, yet there are these other bodies doing the same thing. I know that we went through this again last week and were told that the governor of the Bank—I add the now mandatory remark, “whoever he or she may be”—will be chairing both committees, but it is still a Herculean task for the governor to ensure that two different committees do not have a decision-making process that leads to conflict.

My last question is due to my ignorance of parliamentary procedure. Could the Minister say a bit more about what the phrase “by order” means? Does it mean putting an order before both Houses that is not amendable by us, or not? Apart from that, as I say, my support is strong.

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[Lord Barnett]

I was confused before we started and my noble friend and the Minister have confused me even more. They talk about teams; apparently there is a Treasury team and a team from the PRA, MPC or FCA—I am not sure which it is. There are various teams who will be meeting to solve a crisis if it arises. The Chancellor of the Exchequer, of course, would know nothing about all of this. The people who know something about it might be here with us, including the noble Lord, Lord Sassoon, who is a member of the team, apparently. Maybe he will take the penalty kicks.

[Lord Peston]

The noble Lord was talking rugby and we are talking football.

[Lord Barnett]

We are talking about possible serious financial crises and stability. At the end of the day, the Chancellor will be held responsible if something goes wrong with financial stability. There could be as many teams as we liked, but the Chancellor would ultimately have to accept responsibility, even if he knew nothing about it. I am sure that any Chancellor—I am looking at one now—would know everything that was going on in his team.

I am confused about what the clause or the Bill will do to help us in this matter. My noble friend’s amendment might help, although we are told by the Minister that it could “excessively personalise”. I am blessed if I know what that is supposed to mean, but no doubt the Minister will tell us. At the moment, I am more confused than ever. I thought that I understood a few things about financial matters but, listening to the exchange between my noble friend and the Minister, I am confused more than ever.

[Lord Eatwell]

Perhaps before I sit down I can help my noble friend. We are discussing what is perceived to be an essential failure of the previous system. The failure was that the people responsible for working it did not take advantage of the tools that were provided. Here in the Bill, as the Minister pointed out, the Government have rightly insisted that the Treasury and the Bank convey information to each other, consult each other and act collectively when necessary. That is appropriate, and I commend the Government in that respect. I simply think that they have not gone far enough.

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[Lord Peston]

My Lords, I remind the Committee by way of background that we are discussing adverse, exogenous shocks to the financial intermediation process. Those shocks are impossible to forecast and extremely hard to recognise even when they hit the system. My understanding of why we require macroprudential measures is that it improves the way in which the system works so as to be able to cope with those shocks. It is partly to protect the system of financial intermediation and partly to improve its effectiveness and efficiency—so we have no difficulty about that.

However, if we need these instruments, it follows that in a democracy—and I still include your Lordships’ House as part of our democracy—Parliament must be able to scrutinise them appropriately. As the noble Baroness, Lady Noakes, is well aware, I am not an expert on all the different kinds of orders, and she simply lost me on them, but I ask her whether the measures set out in her amendment give Parliament, including your Lordships' House, a full right to scrutinise the introduction of the macroprudential measures and—here I got a bit lost—to amend them in the sense of saying to the Government, “We think that what you are doing is right, but you can do it in a rather better way.”? If that is what the amendment says, and I see the noble Baroness nodding, the Minister has a duty to the House to say, at the very least, that he will take it away and think it through.

[Lord Barnett]

My Lords, I support the noble Baroness, Lady Noakes, in a way, although the amendment would add even more confusion to the Bill than is already there. My noble friend Lord Peston referred to the fact that it is about shocks. I hope it is not an urgent shock, because the amendment would give time for draft orders to be laid for a period of up to 60 days or before the end of a period of 12 weeks. Then there must be orders in both Houses. I assume that both Houses would also take advice from their Select Committees. All that will be going on while urgency is required. I find the whole thing as confusing as my noble friend does. We are told at the end of the amendment that if this shock arises when the House is not sitting, all kinds of other things happen. As my noble friend said, if the noble Lord, Lord Sassoon, cannot clarify the whole thing for us in asking for the amendment to be withdrawn, we should be glad if he would take it away to think about it further and let us know what he or someone else thinks about it.

Financial Services Bill

Debate between Lord Peston and Lord Barnett

Tuesday 10th July 2012 Lords Chamber

[Lord De Mauley]

My Lords, this group of amendments, which go to the issue of consumer protection, deals with the Financial Policy Committee’s use of its powers of direction and recommendation in relation to the Financial Conduct Authority. These powers are the key means by which the FPC will seek to implement macroprudential policy. I should say at the outset that we wholeheartedly agree with the noble Baroness about the importance of consumer protection, which indeed is why we are creating a dedicated consumer protection regulator in the FCA.

In the case of directions, noble Lords will be aware that the scope of the FPC’s power will be determined by the Treasury. Under new Sections 9G and 9K of the Bank of England Act 1998, as set out in Clause 3 of this Bill, the FPC will be able to direct the PRA, the FCA, or both, to implement “macro-prudential measures” that have been prescribed by the Treasury by order, subject to parliamentary scrutiny.

Amendment 46 seeks to limit the FPC’s ability to make such a direction if it would conflict with the FCA’s consumer protection objective. I understand the general motivation behind this amendment. Indeed, it would not be appropriate for the FPC to issue directions to the regulators without regard for whether they conflict with the statutory objectives of those regulators.

However, let me assure noble Lords that safeguards are built into the Bill to prevent this. Specifically, new Section 9E, as set out in Clause 3 of this Bill, provides that the FPC must, in exercising its functions in relation to the FCA, seek to avoid doing so in a way that would prejudice the advancement of the FCA’s operational objectives, including consumer protection.

This provision is contingent on the FPC being able to achieve its own objective for financial stability. That is right, given that financial stability must necessarily take precedence if the new regulatory system is to address the flaws revealed by the crisis. However, this places a clear obligation on the FPC to take into consideration the FCA’s objectives before acting, and, in subsection (2), to find a way to minimise any possible conflict. In addition, of course, the presence of the chief executive of the FCA as a voting member of the FPC means that the views of the FCA—and therefore of consumers—will be represented and taken into account.

More generally, I suggest that such conflicts are unlikely to arise often. In practice, it is likely that most of the FPC’s directions will be directed at the PRA, so there will not be significant potential for conflict to arise between stability and consumer protection. It is also worth saying that what really is in the interest of consumers is financial stability. If the FPC were to be given a tool, implemented through the FCA, the Treasury would take care to design it in such a way as to minimise the potential for conflict between financial stability and consumer protection.

Amendments 49 and 52 deal with the role of the Financial Services Consumer Panel in relation to directions made by the FPC to the FCA. Amendment 49 would require the FPC to take account of representations from the panel before issuing a direction to the FCA. The FCA will already be required to consider representations from the consumer panel with regard to its general policies and their compliance with its objectives under new Section 1R of FiSMA in Clause 5 of this Bill. This duty will continue to apply when the FCA is acting under direction from the FPC, so the panel will have ample opportunity to make its views known.

Amendment 52, which would require FCA-specific directions to be reported to the consumer panel, is rendered unnecessary by the Bill’s general provisions for openness. For example, under new Section 9J, to be inserted in the Bank of England Act 1998 under Clause 3, directions must be reported to the Treasury and, where appropriate, laid before Parliament. Under new Section 9R, the record of FPC meetings must specify decisions taken, including the decision to give a direction or to make a recommendation.

Likewise, the inclusion of recommendations within new Section 9R means that Amendment 67 is not necessary either. The amendment would require recommendations made by the FPC to the FCA to be reported to the consumer panel, but the general reporting requirement is already in place under new Section 9R. Even without these provisions, we would expect the FCA to keep the consumer panel—indeed all the statutory panels—aware of relevant decisions made by the FPC. However, the provisions that are already in the Bill provide a guarantee of openness. I therefore hope that the noble Baroness will feel able to withdraw her amendment.

[Lord Barnett]

Before my noble friend replies, perhaps I may add my support. The Minister’s reply enhances my concern about the depth of work being given to the Bank of England under this Bill. The Minister referred to the FPC, the FCA, the PRA and the MPC. I suggest that the Government look at all the initials that they are using in these clauses. They are somewhat confusing and might even confuse the new governor. The Minister’s reply briefly exposes the extent and breadth of this Bill. The reply to one modest group of amendments is, to say the least, somewhat comprehensive. I am sure that it might not be easily understood by many Members, let alone by people outside this House.

We are told now that consumer protection is to be decided by the Treasury and not by the Bank of England, which is being given powers under all those initials. It will be decided by the Treasury. Has it nothing else to do? Will the Bank of England have nothing else to do? The whole Bill needs to be looked at afresh, and I would not be at all surprised if, before we get to the end of it, it is not all withdrawn and started again.

[Lord Peston]

Just to supplement my noble friend’s intervention, am I right that the Minister is trying to tell us in a nutshell that there is no problem whatever with consumer protection in connection with these amendments and that everything will be all right, as Dr Pangloss might put it?

Financial Services Bill

Debate between Lord Peston and Lord Barnett

Tuesday 26th June 2012 Lords Chamber

[Lord Barnett]

My noble friend and I put down the amendment not because we care too much about whether someone is called a deputy governor but to discuss the underlying problem here. The Minister might be saved a lot of work in future; as we have heard, we are very fortunate in this House as it is, without reform, in having three noble Lords who can answer our debates, and the Minister need not bother. I am grateful to them, and we are fortunate to have them here. I know that one of them is even worrying about the job of the governor and whether he can cope with it—I see the noble Lord nodding—and he may find at the end of our debates on this Bill that he would rather not bother.

The Minister has not replied to my questions, but of course I did not expect him to. He did not tell us what the salaries were or whether someone gets more of a salary as a deputy than as an ordinary member. He told us that the job was advertised and anyone could apply. I wish I had known that years ago; I might have thought of applying. I do not know who was on the committee then; it may have been those three noble Lords on the Cross Benches who decided on the candidates. Whoever it was, we have had an interesting debate. However, what we have not yet discussed, although no doubt we will have other opportunities to do so, is the job of,

“a Deputy Governor for financial stability”,

and “for monetary policy”.

After all this, I am still not clear what the Monetary Policy Committee does, what the Financial Policy Committee does, what these deputy governors and their committee do, what the governor is going to do, what the Chancellor is going to do and who the hell is doing what. I am sure that in our later debates the noble Lord, Lord O’Donnell, will be interested to know. As I have no intention of applying for any of these jobs, I would like to know how they are decided and who applies. Incidentally, as my noble friend Lord Peston said, it is interesting that there is never a woman anywhere in the Bank. There may be some lower down in some menial jobs.

[Lord Peston]

There has been one.

[Lord Barnett]

Name one. Anyway, I do not wish to delay the Committee much longer, and I will withdraw the amendment.

[Lord Sassoon]

Before the noble Lord sits down, I would point out that very recently Rachel Lomax was a very distinguished deputy governor of the Bank, to name but one, and there are now some very able senior female members in the banking sector, to avoid any doubt on that matter.

[Lord Peston]

Women comprise half the population of the country, do they not? If we look at ratios, there is not a lot to boast about.

[Lord Barnett]

I beg leave to withdraw the amendment.

Economy: Monetary and Fiscal Policy

Debate between Lord Peston and Lord Barnett

Tuesday 8th November 2011 Lords Chamber

[Lord Barnett]

To ask Her Majesty's Government how they are co-ordinating monetary and fiscal policy in the current economic climate.

[Lord Peston]

My Lords, on behalf of my noble friend Lord Barnett, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

Budget Responsibility and National Audit Bill [HL]

Debate between Lord Peston and Lord Barnett

Monday 6th December 2010 Grand Committee

[Lord Barnett]

I must tell the noble Lord that I may not be doing my job properly, but I do not spend my life going through Treasury or OBR websites. Perhaps I should; it might make me better informed. I would not go “over the top”, as the noble Baroness described me. I doubt it. It might make me even more so. The noble Lord, Lord Sassoon, has now told us information that I confess I had not read on the website. It may be that every other Member of the Committee has read it on the website.

[Lord Peston]

I did not.

[Lord Barnett]

I am sure that the noble Baroness, Lady Noakes, read the website carefully. She did not quote it to me, but I now have the figures, which are a bit disturbing. I will read them with greater care later. Once again, Robert Chote is doing the job that the OBR is being set up to do—to tell the world how good the Treasury is. I had a little experience at the Treasury for five years. Officials are excellent, in my experience. I can see them over there, but they are not nodding, because they would not do that. The noble Lord, Lord Sassoon, can nod on their behalf. He is quite right; they are very good. I always found them to be excellent. However, that does not make the Chancellor right in saying all the things he says, either in introducing the comprehensive spending review or at any other time. I confess not only to being not over the top but to being too moderate in my remarks. I am very concerned.

Budget Responsibility and National Audit Bill [HL]

Debate between Lord Peston and Lord Barnett

Wednesday 1st December 2010 Grand Committee

[Lord Peston]

My Lords, there are three amendments in the group, but I want first to say a brief word about the amendment spoken to by my noble friend Lord Barnett. I am intrigued by what is set out in the Bill: the setting up of a committee or sub-committee that may consist of or include persons who are neither members of the office nor members of the staff. I asked myself what this could possibly be about. The Minister decided that he did not like that by quoting the most trivial example he could have dreamed up, and went on to say that they might have set up a committee to deal with personnel matters and that that should not be known. I do not see why that should not be known; transparency means transparency, it does not mean “transparency but”. I want to know what serious argument the Minister could possibly put forward to explain why the office is not obliged to let us know if it sets up a committee. I had assumed that we were talking about a committee of experts on optimal forecasting methods and that sort of thing. We need a more serious response from the Minister.

A fortiori, the amendment tabled by my noble friend Lord Myners requires a serious reply. If you believe in transparency, would there be any circumstances why the minutes of the Budget Responsibility Committee should not only be published but be made available to the public at the same time as they are made available to the members of the committee? Both of those are matters of significance.

I come now to the third amendment in the group, just to say that it is also important. My noble friend Lord Barnett will enlarge on it in a moment, but again I hope that we are given a serious answer, rather than a trivial example to explain why the Minister does not like it.

[Lord Barnett]

I shall say a word about Amendment 34. It seeks to provide that:

“The Office will place in the public domain a record of all meetings with the Chancellor … and other ministers”.

When I tabled a Question for Written Answer on this matter for the noble Lord, Lord Sassoon, he asked Robert Chote to answer it. Mr Chote has duly written to me and I shall quote from it:

“We will be publishing a list of contacts between the OBR and ministers, special advisers and their private offices shortly after each autumn and Budget forecast, beginning with our forthcoming forecast on November 29th”.

I do not know when the list is going to be published and I have not seen it, but it is clear that regular formal or informal meetings with the Chancellor and other Ministers are a very important matter for an independent forecaster, one that is not available to our other 50-odd forecasters. So I hope we will have an answer to this very soon. That is the whole purpose of Amendment 34.

I shall not add to my remarks because I am trying hard to curtail my contributions so that we get to the target figure of amendments that the Government want to see dealt with. But far be it from me to prevent Members of the Committee speaking.

Budget Responsibility and National Audit Bill [HL]

Debate between Lord Peston and Lord Barnett

Monday 29th November 2010 Grand Committee

[Lord Barnett]

When I was Chief Secretary to the Treasury, I could not care at all what the House of Lords was doing about Finance Bills, because it could not amend them. The noble Lord is quite right. My noble friend Lord Davies was my PPS for much of that time, and he knows that one place we did not care about was the House of Lords, because it could not amend our Bills.

[Lord Peston]

My Lords, perhaps I could take us back into the history of some of this. When what became the Bank of England Act 1998 appeared before us as a Bill, it had exactly the same fault that this Bill has in referring to the House of Commons as the House that would look at the Monetary Policy Committee of the Bank of England. My noble friend Lord Barnett and I moved an amendment in a slightly different form from this one. It said, “delete House of Commons and insert Parliament”, and it was accepted. I did not know it at the time but that happened over the dead body of my right honourable friend the former Prime Minister and Chancellor. However, that went in. At the same time, we set up the sub-committee of the Economic Affairs Committee to look at the Finance Bills. As my noble friend Lord Barnett pointed out, we cannot amend Finance Bills, but the Clerk of the Parliaments wrote a definitive statement, which I hope the Minister has read, saying that there was nothing in Erskine May to prevent the House of Lords looking at Finance Bills. The House cannot amend them, so we set up the sub-committee of the Economic Affairs Committee to look at them. The House of Lords can look at the substance of Finance Bills—it can look at any bit of them, according to the Clerk of the Parliaments. That is the definitive view. However, it can only draw attention to certain considerations; it cannot amend. So that is the history.

The amendment in this context would do exactly the same thing. It would enable the House of Lords, in various ways, to involve itself in scrutinising the Office for Budget Responsibility, as my noble friend Lord Myners pointed out, but we would have no powers to order it to do anything at all. That is essentially the position of the House of Lords in making a contribution.

I think I may be speaking only for myself when I say that I have a certain amour propre for your Lordships’ House. I have been here a long time. In my younger days when I was an LSE student, I would have abolished it like a shot. When I got here, one of my noble friends said, “You were hardly here a day when you sold out, and you just love the place”. That has been my position for 23 years. I take a certain offence from the fact that the Bill does not include the House of Lords.