Tax: Aggressive Tax Avoidance

Lord Razzall Excerpts

Wednesday 9th July 2014 Lords Chamber

[Lord Razzall (LD)]

My Lords, at the G8 meeting last year—it is now the G7—the Prime Minister led on the question of tax avoidance by the multinational companies that we all know, such as Starbucks, Amazon and Google. They seem to do significant business in the UK but pay very little tax. What progress has been made in that area?

[Lord Newby]

My Lords, the work in that area has been carried forward by the OECD, which produced a comprehensive 15-point action plan. Work on all those points is now under way. The first deliverables, on transport pricing, are due in September this year. At the EU level, noble Lords will have seen that the EU is currently investigating the tax position in Luxembourg, Ireland and the Netherlands, specifically with Amazon, Apple and Starbucks in mind.

Finance: Fiscal Devolution

Lord Razzall Excerpts

Wednesday 9th July 2014 Lords Chamber

[Lord Newby]

My Lords, the first point that the noble Lord makes is summed up very well in the introduction to the report to which his Question refers, in which Tony Travers, who chaired it, says:

“Devolution and localism face little opposition apart from national politicians’ cautious approach to constitutional change in Britain”.

That sums up the position very well, and I think that there has been considerable movement under this Government. I will take back the noble Lord’s second point to my colleagues in the Treasury.

[Lord Razzall (LD)]

Does the Minister agree that every political party during his adult lifetime has fought elections on the basis that it wants greater devolution of power to the regions or the cities and then, when it gets into power, it finds a reason not to do so?

[Lord Newby]

I am afraid that there has been a very chequered history of attempts to devolve power—within England, at least. This Government, by devolving half the income generated by business rates, have begun a process. The growth deals announced at the beginning of this week—under which, over a period, £12 billion will be devolved to local enterprise partnerships, whereas it would otherwise have been administered by central government departments—is a big move towards greater devolution. I suspect that in the next Parliament there will be much more pressure to do more.

Payday Loans: Debt Collection

Lord Razzall Excerpts

Tuesday 1st July 2014 Lords Chamber

[Lord Newby]

My Lords, the noble Lord is right that there is a question over whether Wonga in this case might have infringed both the Fraud Act and the Theft Act. The Law Society has asked the Solicitors Regulation Authority to investigate whether Wonga might also have breached Section 21 of the Solicitors Act 1974 and the Legal Services Act 2007. There is plenty of scope for legal action. On the fit-and-proper test, payday loan companies have been regulated by the FCA only since April. A full fit-and-proper test of each company will be undertaken in the autumn.

[Lord Razzall (LD)]

My Lords, is the Minister aware that the debt collection practice with which we are concerned has also been introduced by the Student Loans Company? Will he confirm that no other government agency follows the same practice and agree that it is difficult to complain about Wonga when a government agency is involved in similar activities?

[Lord Newby]

My Lords, there have been recent reports about the Student Loans Company. My right honourable friend David Willetts is in the process of establishing the facts of the practice. The offending letters that the SLC sent out are no longer being sent. Certainly, if it is found that the SLC or any other arm of government has adopted unsatisfactory practices, appropriate and firm action will be taken.

Budget Statement

Lord Razzall Excerpts

Thursday 27th March 2014 Lords Chamber

[Lord Razzall (LD)]

My Lords, since the days of Asquith your Lordships’ House has been excluded from any direct influence on the Budget process, but the number of noble Lords who have put their names down to speak in this debate demonstrates how much we appreciate the opportunity to comment on the state of the economy and the potential political consequences that flow from it.

However cautious the Chancellor of the Exchequer and other Treasury Ministers have been, there can be no doubt that the UK economy is on the mend. Output is growing at its fastest rate since before the financial crash; unemployment is falling as new jobs are created in the private sector, as the Minister indicated—more than replacing those lost in the public sector; inflation at 1.7% last month is the lowest for four years and is now below the Bank of England target of 2%; and it is now estimated that by the last quarter of 2014 the economy will be greater in size than it was before the 2008 collapse.

For the two coalition parties the political challenge is clear. The result of the Fixed-term Parliaments Act means that we now know that the date of the next election will be the first Thursday in May 2015. To do well in that election, both our parties will have to demonstrate that the economic policies of the coalition are working and that a return to a Labour Government would put the economic recovery at risk.

As noble Lords will be aware, the coalition has been successful in persuading the electorate that the financial crisis in 2008 was the result of the Labour Government’s profligacy. I accept that this is slightly unfair as it ignores the effect of the subprime mortgage collapse in the United States, but the success of the argument is demonstrated by polling figures, which have consistently shown that the Government are better trusted to manage the economy than Labour. Of course, Labour has not been helped by the refusal of the shadow Chancellor, Mr Balls, to show any remorse for Labour’s period of economic stewardship.

The major attack from Labour, which the noble Lord, Lord Hollick, touched on, has been that growth is not resulting in an improvement in living standards. There are probably two main reasons for this, of which only one is the direct result of government policies. Clearly, the increase in VAT to 20% had a significant impact on household budgets which is still working its way through, but the major factor outside government control which is not often mentioned has been a significant adverse movement in trade prices. As Ben Broadbent, a member of the Monetary Policy Committee, has recently noted, for many years the terms of trade were in our favour. The emergence of China as a source of cheap labour sharply reduced the real price of goods. Our trading strength lay in services, the price of which rose steadily. However, this trend started to reverse in 2003. Growing demand from emerging markets produced a large rise in the price of commodities, of which we are a net importer, and the price of tradable services rose less quickly. Therefore, after a decade in which global trends helped to push down the real price of consumption for UK consumers, the past 10 years have seen the opposite.

On both those issues, it seems that the news is quite good for the coalition. Indirect taxes such as VAT are under government control, so I would have thought that before the election the Government would be unlikely to increase direct taxes, as they did between 2009 and 2011. The cost of imports seems to have stabilised and the prices of our services have started to rise.

The second big political argument in recent months has been over spending plans for the five years after 2015. The legacy inherited by the coalition in 2010 was the double whammy of an unsustainable deficit of government spending over income and a crippling government debt burden. George Osborne and Danny Alexander, the two relevant Treasury Ministers, have committed their respective parties to further steps to eliminate the deficit and reduce debt after 2015, although naturally there are disagreements to come between the two parties as to how in practice this will be achieved. In the mix of tax increases and spending cuts, I suspect that the Tories will be more likely to avoid the former, whereas the Liberal Democrats will not wish to rely solely on the latter. However, the two parties are united in opposition to Ed Balls’s recent proposals, which appear to concentrate solely on deficit reduction, ignoring the debt burden.

Will the coalition parties be able to claim in a year’s time that the economy has recovered on their watch? The portents are good at present. The polls are indicating a surge in economic confidence from both business and the consumer. Surveys by the employer organisations indicate a significant increase in proposals to invest. Although the overwhelming factor in the return of growth obviously comes from what Keynes described as “animal spirits”, the Government can claim some credit. I have often thought of government policy as analogous to a swan, sailing serenely on while declaring that there is no alternative to the austerity programme but underneath the water the legs are paddling furiously to create initiatives to promote economic activity: infrastructure spending, with Crossrail the largest infrastructure scheme in Europe; the regional growth fund; the Green Investment Bank and the business bank; the development of an industrial strategy by the Department for Business, Innovation and Skills, with concentration on key areas of industry; and the stimulation of the housing market by the Help to Buy scheme.

So far as concerns the Labour attack on the reduction in living standards, which the noble Lord, Lord Hollick, referred to, I think that the news is also good. The increase in the personal allowance to £10,500 will clearly help the standard of living of the less well-off, and the improvement in living standards is beginning to show in the figures. The 1.7% headline rate of inflation was identical to the rise in pay in December and January. If you strip out the lumpy effect of bonuses, pay in January went up 1.8%, so incomes are now back to rising more than the rate of inflation.

Notwithstanding the return of confidence in the economy, I see two main pitfalls ahead. The first, to which the Minister referred, is our productivity record. Although real output is now more than 6% higher than in 2009, total real wages are lower. The feel-good factor from economic growth is not there, and by far the major factor in this has been the fall in productivity. Workers are simply producing less output than in the past. As the Minister indicated, a major key to increasing productivity and reversing the downward trend is more business investment, so the Government must pray that the confidence expressed in business surveys follows through to actual expenditure.

Secondly—I turn to a number of our Tory colleagues here—there is Europe. If the recovery in the eurozone stalls, as it is our biggest trading partner we will clearly feel the chill. More particularly, I have little doubt that if there is any chance of a referendum on Europe resulting in a vote to leave, business investment—the key to jobs and productivity increases, as we all accept—will falter. In 2012 for the first time ever Britain exported more cars than it imported. Can we imagine the multinational companies which own our major manufacturers committing significant new investment if they felt that the United Kingdom would leave the European Union?

Finance: Interest Rates

Lord Razzall Excerpts

Tuesday 18th March 2014 Lords Chamber

[Lord Newby]

My Lords, I am afraid that I do not read the papers of the Economic Affairs Committee as assiduously as I should, and I cannot quite remember. My recollection from reading them from time to time is that the governor still goes, although not as frequently as when the noble Lord set up the committee. The committee was established specifically to review the workings of the Monetary Policy Committee; it was not an Economic Affairs Committee—I had the honour of sitting on it with the noble Lord. Although the governor does not come to the committee as frequently as he used to, he still does come—but I shall write to the noble Lord to tell him when the last time was.

[Lord Razzall (LD)]

My Lords, does the Minister agree that the powers of the Monetary Policy Committee are even greater than are often thought? Does he further agree that the best example of this—if he were to read the minutes of the last meeting which have been published—is that the governor’s wish to include reference to the output gap in forward guidance was overruled by the Monetary Policy Committee, thereby indicating its power?

[Lord Newby]

My Lords, one slightly surprising thing about the way in which the MPC has worked is the independence of its members vis-à-vis the governor. When it was established, I think that there was a view that it would be a poodle of the governor, because a significant number of members are other employees of the Bank of England. That has not proved to be the case, and governors have, if not regularly, then on a number of occasions been overruled by the rest of the committee over the years.

Economy: Growth

Lord Razzall Excerpts

Tuesday 11th February 2014 Lords Chamber

[Lord Newby]

My Lords, that just seems one of the many inevitable consequences were independence to take place.

[Lord Razzall (LD)]

My Lords, going back to the Scottish banking system, does my noble friend believe that Alex Salmond is behind the suggestion that RBS would relocate to England in the event of independence, as had the last taxpayer bailout occurred in an independent Scotland it would clearly have bankrupted the Scottish economy?

[Lord Newby]

My Lords, the noble Lord may be right. An independent Scotland would have banking assets equivalent to 1,254% of Scottish GDP—more than Ireland, Iceland and Cyprus when they ran into banking difficulties.

Economy

Lord Razzall Excerpts

Tuesday 28th January 2014 Lords Chamber

[Lord Newby]

My Lords, I am very pleased to do so. The figures quoted by my noble friend are matched by the fact that in the latest quarterly employment figures the biggest fall in unemployment was in the Midlands. Over the course of the past year, a record 526,000 businesses were created—an increase of some 42,000 over the previous year.

[Lord Razzall (LD)]

My Lords, does the Minister agree that it is obviously essential that business confidence should be maintained to ensure continued economic growth? In that context, would he care to comment on the remarks yesterday of his noble friend the Secretary of State for Business, Innovation and Skills that rhetoric on the European Union coming from some elements of the Conservative Party is in danger of damaging that business confidence?

[Lord Newby]

My Lords, at the moment, when we are seeing the largest increase in business confidence for a number of decades, any statement by anybody from any party which has the effect of undermining that confidence is very much to be deprecated.

National Insurance Contributions Bill

Lord Razzall Excerpts

Thursday 23rd January 2014 Grand Committee

I do not wish the clause, which introduces the GAAR into the Bill, to be agreed as legislation is meant to be effective and the GAAR’s record is far from effective in this context. How does the Minister intend to ensure that it is effective in this instance?

[Lord Razzall (LD)]

My Lords, when I looked at the amendments that the noble Lord had put down and saw this one, I had a wonderful fantasy that what we were seeing here was Labour adopting the stance of being in favour of tax abuse through the use of NICs. I was already beginning to draft the leaflet that would pin this new policy on the Labour Party. Sadly, having listened to what the noble Lord said, I realised that that was not what he was saying at all.

No doubt the Minister will respond to attacks on the GAAR. I listened very carefully to the speech of the noble Lord, Lord Davies, but did not hear any explanation of why, if the GAAR exists and includes provisions in relation to tax abuse generally, NICs should not be included in it. I understand that the noble Lord does not like the GAAR and does not think that it is effective—but, given that we have it, I am not sure why we should not include national insurance in it.

[Lord Newby]

My Lords, I am grateful to the noble Lord for introducing this debate, because it has given me the opportunity to make a suggestion to him about what we might replace the term GAAR with. I wonder whether he would be happy if instead of calling it GAAR, we called it GREAT, as in Great Britain: the general rule to eliminate the avoidance of tax. If we had done that, we might have satisfied the noble Lord, and summed up our emotion when we think of the new provision.

The noble Lord’s basic argument is that we are not doing enough. As a veteran of debates on GAAR over the past decade, I recollect that noble Lords in the previous Government—perhaps even the noble Lord, Lord Davies—explained to me why the GAAR was totally impossible, completely unworkable and the Government would not countenance it. Indeed, they did not; they did not do anything in this area. The fact that the noble Lord finds this inadequate is slightly sad, given their failure to act in this area.

The noble Lord raised a number of points of failure, as it were, but one of them was in respect of the agreement with Switzerland. The agreement with Switzerland has not brought in as much as was expected, but the Exchequer has received almost £800 million via that agreement. That is £800 million that we would not have had, £800 million that the previous Government showed no inclination to pursue. That is only one of a large number of measures that we have taken to ensure that people and companies who are avoiding or evading tax do not get away with it. In terms of personal taxation, the Lichtenstein disclosure facility has yielded a lot more than was ever envisaged and, along with the Swiss agreement, is part of driving down the ability of those with large resources to avoid tax.

The new automatic information sharing agreements, which have followed the FATCA legislation in the United States, are revolutionising the ability of HMRC to gain information about the tax affairs and bank holdings of British nationals, whether those are held in the Channel Islands or some Caribbean tax havens. Along with the Swiss and Lichtenstein démarche, that will make a big difference to our ability to get the money to which the Government are entitled. On companies, as the noble Lord knows, the work being done in the OECD, particularly on base-erosion and profit-shifting, is aimed to deal with the particularly egregious examples of large multinationals paying very little tax indeed.

As for domestic action, GAAR is only one plank in our overall strategy. HMRC published Levelling the Tax Playing Field alongside Budget 2013 to provide an update on the strategy and to set out the full range of measures being taken in this area. Some people have argued that because GAAR is tightly focused, it will not hit many of the targets and almost gives a green light to other forms of tax avoidance, but if you look at the whole raft of measures that we have taken in Budgets and Finance Bills—most recently, some announcements in the Autumn Statement—it becomes apparent that we have taken measures to protect several billion pounds of Exchequer revenue which might otherwise not have been agreed.

We have, for example, taken firm action to clamp down on stamp duty land tax avoidance, introducing the new annual tax on enveloped dwellings, and continue to close loopholes as quickly as possible after they emerge. In the summer, we publish a consultation entitled Raising the Stakes on tax avoidance, seeking views on proposals for a new set of obligations for promoters of high-risk tax avoidance schemes.

HMRC does an excellent job defeating tax avoidance schemes in court and making sure that people know that many of the schemes simply do not work, but we know that there is much more to do. That is why the consultation also encouraged users of avoidance schemes to settle their tax affairs after similar cases have been lost in court or tribunal. The GAAR is an important step to increase the pressure on the tax avoidance industry, but it is only one step, and we continue to take further action and devote more resources to the fight against tax avoidance in all its forms.

With those reassurances, I hope that the noble Lord will feel that he does not need to press the point.

--- Later in debate ---

I have no doubt that the Minister and his department have been much exercised about this, because the committee drew this to the attention of the House. It would be remiss of me if I did not give him the chance to respond to what is an analytical piece of work on its part, which I cannot hope to match. I know that the Minister has been busy in this respect and I apologise if I have not been able to assimilate all the responses. I am sure that I have given him a clear enough steer for him to indicate why the Government are either secure about the framing of the Bill, or if not, will take steps to effect an amendment that we would otherwise be obliged to do.

[Lord Razzall]

My Lords, the noble Lord has proposed that Clauses 13 and 14 should not stand part of the Bill. The clauses relate to tax avoidance and the abuse of limited liability partnerships. The Minister will be aware that there is concern among professional organisations, particularly the Law Society—not in relation to the Bill itself, but about what will happen in relation to the regulations that will be brought forward. Noble Lords will have received a briefing from the Law Society, because limited liability partnerships were introduced some time ago for professional partnerships, not primarily for tax purposes but to limit the liability of what were previously general partnerships to actions for negligence. That was the major driver for the creation of limited liability partnerships. Most significant law firms and firms of accountants now operate as limited liability partnerships, so there is clearly concern among them that the definitions of employees and partners should be clear.

I received representations from the Law Society this morning, but the basic thesis is that the consultation exercise to determine how a limited liability partner should be properly treated as a partner, or how they should be treated as an employee, was based on the wrong assumptions. The consultation went out on certain assumptions and the proposals on the implementation of the regulations, which I have not seen, change that basis. Therefore, the consultation itself is ineffective.

I appreciate that this does not go to Clauses 13 and 14 of the Bill, because they simply provide for the regulations to be brought in. However, between now and Third Reading the Government ought to respond, saying either that the Law Society in its representations is wrong, and why, or alternatively explain how they propose to deal with what I suspect the Law Society is asking for, which is further consultation before the regulations are brought in. I do not know which of the two is correct and I have not had time to form my own opinion on that. This is an important issue because the limited liability partnerships are important structural mechanisms for professional partnerships. We clearly need to get this right before we change the law in this respect.

[Lord Newby]

My Lords, I am grateful to both noble Lords for their contributions to the debate. I apologise to the noble Lord, Lord Davies, for the fact that he has only just received the letter. As he pointed out and knows very well, it has been a somewhat unusual week in terms of my ordered conduct of business and the letter was sitting on my desk for rather longer than it should have been. It is only fair to point out that this is no failure on the part of officials to respond in a timely manner; it is my failure. I am sorry that the noble Lord has only just got the letter.

Two points have been raised. The second was raised by the noble Lord, Lord Razzall, with regard to consultation. He asked whether the legislation had gone beyond the proposals set out in the consultation document. The Government believe that it does not go further than originally proposed or go beyond the original policy intention. In fact, as a result of the consideration of the consultation responses, the Government dropped the first of the original two conditions which were broadly in line with the employment status tests, which would have meant that even senior partners in major professional firms might have been reclassified as employees. The second condition, which contains ownership or economic interest or risk tests, has been slightly broadened because of this change, but it is still a narrower measure than if both conditions had been implemented as originally proposed. The Government also made clear in Budget 2013 and in the consultation document that the proposals will apply to higher-paid staff in the professional services sector and the lower paid if they are LLP members who receive a largely fixed reward and carry little economic risk or interest.

As regards the status of the secondary legislation and the issue of retrospectivity, the noble Lord referred to two sets of secondary legislation. The first, in Clause 13, had already been published in draft and the second, in Clause 14, was, I believe, enclosed with the letter to the noble Lord and has been put in the Library.

This legislation introduces half of a series of provisions that relate to income tax and national insurance. Slightly unusually, we are legislating for the national insurance part first because we happen to have this Bill before us. The relevant identical provisions relating to income tax will be in the Finance Bill, which will be introduced later in the year and will become the Finance Act 2014. The intention is that the provisions in respect of income tax and national insurance will not apply retrospectively but will apply from April 2014. That is made absolutely clear and set out in the secondary legislation.

I am told that the use of the earlier date in the primary legislation follows precedent in respect of other pieces of legislation and does not mean that the Government will introduce this measure going back a decade or, indeed, going back at all. There are technical arguments for putting that earlier date in the legislation, but the secondary legislation, as I said, makes it absolutely clear that the provisions will come into force from this coming April. Therefore, there is no question of an undue degree of retrospection. I hope that the letter which I sent to the noble Baroness, Lady Thomas of Winchester, set that out clearly and, I hope, satisfies the committee and the noble Lord.

National Insurance Contributions Bill

Lord Razzall Excerpts

Tuesday 7th January 2014 Lords Chamber

[Lord Razzall (LD)]

My Lords, I should start by saying, for the record, that this is the first time in my 17 years in your Lordships’ House in a Second Reading debate that two-thirds of the speeches have been delivered by Liberal Democrats. It goes without saying that we on these Benches support the Bill very strongly. The Bill ought to be put into the context of the package of measures that the coalition Government have introduced to support the so-called SMEs in recent years, which were very much supported by the Liberal Democrat members of the coalition—and often, dare I say it, provoked by them.

I will briefly list them. We have corporation tax down from 28% to 23% and heading for 20% by 2015. We have the proposed creation of the new business bank and the various lending schemes designed to assist SMEs. We have the establishment of the regional growth fund and the increase in capital allowances, very much sponsored by my friend in another place, the Member of Parliament for Burnley. We have the “one in, two out” policy on deregulation, and, of course, the small business rate relief, spread over two and a half years.

We very much welcome the creation of the employment allowance system, allowing a grant of £2,000 a year to employers in relation to their employees’ class 1 NICs, and the Government’s confirmation that HMRC will engage with the representative bodies of businesses and others to ensure that the system works as simply as possible, so as to minimise its impact. I think the Minister reported the Treasury calculation that up to 1.25 million businesses will benefit from the scheme, with around 450,000 being taken out of paying employer’s NICs altogether. That is about one-third of all employers. It is clearly a significant figure. The other issue here that we very much welcome from these Benches is the effect of including charities. It is calculated that up to 35,000 charities with employees will benefit, reducing their tax burden, it is calculated, by around £45 million in total.

At this time of night, far be it from me to comment on Labour’s alternative policy, which undoubtedly the noble Lord, Lord Davies, will touch on, but I do not think that there is any disagreement across the Floor of your Lordships’ House that something must be done to help SMEs. The Labour proposals of which I am aware would freeze business rates for two years from 2015. It is calculated that this would save small businesses an average of £450 over two years. Of course, the employment allowance scheme created by this Bill would see those businesses save £4,000 over the same period.

From these Benches, we also very much welcome the inclusion of NICs in the so-called GAAR—the general anti-avoidance rule. They were originally excluded. I am particularly conscious of the effect that this will have on offshore employment payroll companies, preventing them doing what they have so often done to allow employers to avoid paying NICs. We also welcome the fact that the Bill removes the presumption that limited liability partnership members are to be treated as self-employed, which can be used as a tax loophole. It is important that these changes will only target those NIC arrangements that are regarded as abusive. As the Minister indicated, as with all other measures under the GAAR, the NIC arrangements will be subject to the double-reasonableness test, which will consider whether the arrangements used by a company can be reasonably regarded as a reasonable course of action.

The Minister indicated the overall welcome for these proposals from a number of representative bodies. The Federation of Small Businesses stated:

“The NICs Employment Allowance is a measure our members have warmly welcomed. It will have a positive impact on small firms and the economy when it comes into force next spring. Our members have said they’ll spend the savings on their business, either through investing in the business, increasing wages or taking on staff”.

The CBI director-general said:

“The surprise £2,000 National Insurance rebate in the Budget will give smaller firms the confidence to take on extra staff. Extending the General Anti Avoidance Rule is sensible. No one can condone abusive avoidance schemes which serve no commercial purpose other than the minimisation of tax—even if they are legal”.

Finally, the chief executive of the Small Charities Coalition said:

“For a lot of the smallest charities, having one paid member of staff is a big step forward … having this allowance now helps them to do that, so it is a very positive thing”.

It just remains to be seen whether this proposal has the effect desired by the Government of helping create new jobs.

Payday Loans

Lord Razzall Excerpts

Wednesday 11th December 2013 Lords Chamber

[Lord Newby]

My Lords, this matter has been looked into. The Financial Conduct Authority, which takes responsibility in this area from next April, has already proposed limiting continuous payment authorities to two payments and reducing rollovers to two. It has the power to constrain them further than that if that is still seen to be an issue. That is one of the things that the FCA will look at as part of its assessment of the total cap of the cost of payday loans, which it is currently considering.

[Lord Razzall (LD)]

My Lords, I will follow the previous two speakers but extend the question a little more widely. What steps do the Government propose to take to ensure that payday loan operators cannot simply move their headquarters overseas and operate outside the restrictions that are going to be brought in?

[Lord Newby]

My Lords, under the e-commerce directive, which was introduced during the lifetime of the last Government, payday loan operators are able to relocate. However, a majority of EU member states already have some kind of cap on the cost of payday loans, even if not necessarily as comprehensive a cap as we have, and there is an ongoing debate in those member states that do not yet have a cap about implementing one. There are already a majority of EU member states to which it would almost certainly be uneconomic or pointless for payday loan lenders to switch their bases of operation.