Finance: Loan Guarantee Scheme

Debate between Lord Sassoon and Lord Elystan-Morgan

Tuesday 24th July 2012 Lords Chamber

[Lord Sassoon]

My Lords, there will be no fiddling of the numbers by this Government on this or anything else. The position is very straightforward: the financing markets for these projects are extremely difficult but good projects are coming forward in the pipeline, and the beauty of the scheme is that we can use the strength of the government balance sheet. To answer the technical question, the infrastructure guarantees will be financial transactions and will have no impact on PSNB. A project would have an impact on PSND only if there was a non-negligible expected loss, which is not something that we anticipate. The guarantees will generally count as contingent liabilities, and that is very clear.

[Lord Elystan-Morgan]

My Lords, may I gently tempt the Minister to answer the second question asked by my noble friend Lord Wigley? I take it that there was no consultation. Why was that? Was there an intention to show contempt for the views of the devolved Administrations or did the Government just not think about it? What is the answer, please?

Royal Bank of Scotland: LIBOR

Debate between Lord Sassoon and Lord Elystan-Morgan

Wednesday 4th July 2012 Lords Chamber

[Lord Davies of Stamford]

My Lords—

[Lord Elystan-Morgan]

My Lords, going back to the Question asked by my noble friend Lord Empey, can the Minister tell the House, without going into specifics, what was the first point in time at which the Government gained any information about the possibility of the rigging of LIBOR?

[Lord Sassoon]

My Lords, I am tempted to go back into history beyond the last two years but the answer is that I cannot. It would be inappropriate to discuss that while investigations are still going on.

FSA Investigation into LIBOR

Debate between Lord Sassoon and Lord Elystan-Morgan

Monday 2nd July 2012 Lords Chamber

[Lord Elystan-Morgan]

My Lords, if I may, I will make a point in support of the very pertinent submission made by the noble Baroness, Lady Kramer. This is not a question of who should prosecute or who can prosecute. A simple, straightforward criminal offence was created in Section 397 of the Financial Services and Markets Act 2000; I checked it. That provision deals with a false statement or declaration that is made deliberately or misleadingly and that distorts a market. It is an offence that is punishable on indictment with a maximum of two years’ imprisonment. There would seem to be ample prima facie evidence that such an offence has been committed. In the circumstances, bearing in mind the damage done and the ruthlessness with which such practices were conducted, is there any reason why persons responsible should not stand trial?

[Lord Sassoon]

My Lords, I am sure that the FSA will listen to the analysis given by the noble Lord, Lord Elystan-Morgan; and if it has not already got to the bottom of it, it will take his points on board. The authority is acutely aware that it needs to press on, but the noble Lord, Lord Turner of Ecchinswell, has made it clear that it is very difficult, which is why the FSA seems to be taking the lead on this.

Independent Commission on Banking

Debate between Lord Sassoon and Lord Elystan-Morgan

Monday 12th September 2011 Lords Chamber

[Lord Sassoon]

I am very grateful to my noble friend Lord Forsyth for welcoming this report. It is a fine piece of work that has been done under a lot of time pressure. The commissioners have developed the analysis very considerably from their interim report, and I share my noble friend’s conclusion that by coming out now with these reforms to strengthen our banking system, we will place our banks and the City of London in an even better position to compete globally, as the Government want them to be able to do.

[Lord Elystan-Morgan]

My Lords, I appreciate that it is wholly necessary that there should be an effective firewall between retail and wholesale banking, and that the detail of that remains to be determined. However, perhaps the Minister will accept that the seriousness of the situation is illustrated in this way. Section 6 of the Theft Act 1968 defines theft as occurring in circumstances where a person uses the property of another as if that property were his to dispose of, irrespective of the rights of the other. In that way, the revelations of 2008 show quite clearly that in many instances there was moral theft, if not actual legal left.

Banks: Cheques

Debate between Lord Sassoon and Lord Elystan-Morgan

Monday 6th June 2011 Lords Chamber

[Lord Sassoon]

My Lords, I am happy to confirm to my noble friend that competition is key to so much of making our banking system work better than it has in some respects in the recent past. That is precisely why the Independent Commission on Banking was given competition as the heart of its remit. Whether in relation to alternative payment mechanisms or to so many other things in banking, I completely agree that competition has to be at the heart of it. Again, when it comes to the Government’s shareholdings in the banks, the independent commission has made some provisional findings which very much touch on the banks that the Government control.

[Lord Elystan-Morgan]

My Lords, does the Minister agree that our forebears might regard the capacity to extract Treasury notes from a hole in the wall as the greatest miracle since Moses struck the rock? Will he undertake, however, that if this matter is raised seriously again by the banks there should be a wholesale study into the question of third-party rights in relation to bills of exchange, choses in action and garnishee orders?

[Lord Sassoon]

My Lords, we are straying a bit from the rather important and focused question of cheques and the Payments Council, which those other forms of payment extend rather beyond. The critical thing is that no decisions are to be taken precipitately. As I have said a couple of times, the banks recognise what they have to do. This issue will remain a matter of considerable public focus, not least because the Treasury Committee in another place recently announced that it is reopening its own inquiry into the future of cheques. The issue will remain very much in the public eye and the pressure will be on the banks and the Payments Council to come up with a solution that works for the whole country.

Credit Unions

Debate between Lord Sassoon and Lord Elystan-Morgan

Tuesday 8th March 2011 Lords Chamber

[Lord Sassoon]

My Lords, I am happy to look at any suggestions for furthering the development of credit unions and similar savings channels. I am grateful to the right reverend Prelate for drawing my attention to those recommendations.

[Lord Elystan-Morgan]

My Lords, while I welcome most warmly the initiative announced on behalf of the Government, does the Minister agree that a great deal of suffering and injustice could be alleviated and avoided by giving judges in our civil courts the right to strike down claims that arise from loan contracts with unconscionably harsh conditions, particularly extortionate interest rates?

[Lord Sassoon]

My Lords, it is very much at the forefront of the Government’s thinking in this area to make sure that all appropriate steps and options are available so that those at the more deprived end of the economic and social spectrum are not ripped off by loan sharks or whoever. The credit unions that we are talking about have a central role to play in that.

Savings Accounts and Health in Pregnancy Grant Bill

Debate between Lord Sassoon and Lord Elystan-Morgan

Tuesday 7th December 2010 Lords Chamber

[Lord Sassoon]

I can give noble Lords my understanding of what the procedure is, but I certainly cannot and would not presume in any way to go into what process Mr Speaker went through. That is a matter entirely for Mr Speaker and not a matter for us in this House to question.

[Lord Elystan-Morgan]

I speak with all the neutrality that one can from these Benches. Is not the situation that there is a very substantial grey area? Section 1 of the 1911 Act gives many possibilities so that, if a rigid application of that provision had been applied since 1911, hundreds of Bills could have been called money Bills that were not called money Bills. There is a very substantial area of dispute, which will remain unless and until there is some curtailment of that discretion vested in those who advise the Speaker of the House of Commons.

Ireland: Financial Assistance

Debate between Lord Sassoon and Lord Elystan-Morgan

Monday 22nd November 2010 Lords Chamber

[Lord Sassoon]

It is always good to have the noble Lord with us on these occasions to share with us his big picture vision, even if it is not one that I or the Government share. We are where we are with the eurozone at the moment, and we must be constructive partners to make it work. It is clearly regrettable that articles of the European Union treaty, such as Article 122, which should have been used for such things as natural disasters, has been enabled to be used for a mechanism in which the UK was committed to be a contributor by the previous Government. There are certain things that we must get straight going forward so that the treaty is used for the purposes for which it was intended. There are a number of lessons, to which I have referred, but I repeat that it is absolutely in our interest to see a strong eurozone because, among other things, that is where 40 per cent of the UK's exports go.

[Lord Elystan-Morgan]

My Lords, does not the Minister agree that the statements made by the German Chancellor and the French President at Deauville a month ago and thereafter were singularly unhelpful? I refer to the declarations in relation to the rate of interest and to tax levels in the Republic of Ireland and the demand that bondholders should bear a substantial part of the loss. Her Majesty's Government should be congratulated most warmly on having abjured any temptation to trespass on or to demean in any way Irish sovereignty and to accept those realities of geography, history and commercial intertwining which bind our two countries so closely together.

[Lord Sassoon]

I am grateful to the noble Lord for his remarks. I shall not criticise other countries for the running commentary that they have given on certain aspects of the developing situation, but the noble Lord gives me the opportunity to confirm that the UK believes in tax competition in Europe. We certainly have not been and will not be a party to some chorus telling the Irish how they should set their levels of corporate taxation, any more than we would want people to lecture us on how to set it.

Taxation: Avoidance

Debate between Lord Sassoon and Lord Elystan-Morgan

Wednesday 20th October 2010 Lords Chamber

[Lord Sassoon]

I am a little at a loss to understand why the noble Lord is questioning why we are putting extra money into HMRC to recover this enormous sum of £7 billion annually by the end of the spending review period when that was not done by the previous Government.

[Lord Elystan-Morgan]

My Lords, is it not the case that the real dividing line is not between evasion and avoidance? Evasion is criminal but, as far as avoidance is concerned, nomenclature should be devised to make it absolutely clear that there are two categories. There is that category where decent ordinary citizens so adjust their affairs that they properly are free from tax that would otherwise be charged. The other category is redolent with mind-boggling artifices that are nothing but a sham. Will the Minister give an undertaking to consider nomenclature that will draw a clear distinction between those two categories?

[Lord Sassoon]

My Lords, I appreciate the difficulty, which is why I attempted earlier to distinguish between the two cases around what appears to have been the intention of Parliament when it drafted the tax laws concerned.

Terrorist Asset-Freezing etc. Bill [HL]

Debate between Lord Sassoon and Lord Elystan-Morgan

Wednesday 6th October 2010 Lords Chamber

[Lord Sassoon]

My Lords, let me attempt to deal with this. I certainly feel that I live in the real world in that I have to make such decisions regularly. One limb of the test that has not been stressed in this discussion but which is absolutely critical to it is that the legal test for freezing assets has the second limb that the Treasury must also conclude that a designation is necessary for public protection. That is the critical safeguard on how the power to freeze assets is used. There can be very fast-moving situations, as described by my noble friend Lord Carlile of Berriew, when the exact nature of each person’s role in a plot is not immediately clear. It would be a significant restriction on the regime’s ability to operate in the preventive way that is necessary for public protection if we were to exclude those who might be involved in the broader commissioning, facilitation and support of terrorist activity.

My noble friend instanced the case of people who may be sitting on money. It is essential that the definition is not restricted in the way that Amendments 4 and 8 propose if it is to be effective. As the plot is disrupted, the exact nature of people’s role will become increasingly clear. It will become clear who is a “bystander”, to use the word of my noble friend Lady Hamwee. I think that the two-stage framework that we will now have in place, combined with the requirement for Treasury Ministers to conclude that the designation is necessary for public protection, deals with the point.

[Lord Elystan-Morgan]

I am most grateful to the Minister for giving way. I accept of course that there has to be very wide discretion, which is allowed to the authorities in these two provisions, subsections (1) and (2). However, at the end of the day, one has to ask: what is the target area? Reasonable suspicion is perfectly understandable. It is something with which the authorities have to deal day in and day out. The question is: what is the target area? Is it a person who has been criminally involved to some degree or another as a principal in the first or second degree or as an aider, abetter, counsellor or procurer, or is it wider than that and, if so, how much wider? In other words, what is the end product that one is being reasonably suspicious of?

[Lord Sassoon]

I am grateful to the noble Lord, Lord Elystan-Morgan, but I must reiterate that we are trying here to achieve the protection of the public against active, live terrorist attacks. In order to do that, Ministers need to be able to exercise immediate discretion to stop the flow of money—as we know, very small sums of money can create enormous disruption. Ministers must have appropriate powers to disrupt the terrorist threat. That means that it is important that the freezing net is drawn so that those who are involved in supporting or facilitating the activity are caught in it, but, as the evidence becomes clearer, the Treasury must be concerned at all times that the designation is necessary for public protection. Where an individual may have been part of a wider group that is involved in terrorist activity but where it has subsequently become clear that the individual’s involvement was purely incidental and that they themselves were not supporting or facilitating terrorism, it would be difficult to demonstrate that a freeze was necessary for public protection. Freezes cannot be imposed or maintained unless the second limb of the test is met.

I return to the analysis by my noble friend Lord Carlile of Berriew. I believe that protections are in place and that we must not forget that second limb. For those reasons, I hope that, on reflection, my noble friend will be prepared to withdraw her amendment.