Wales: Barnett Formula
Debate between Lord Sassoon and Lord Roberts of Conwy(12 years, 5 months ago)
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Lord Sassoon
My Lords, we are straying a bit from Wales, but I am very happy to talk about Scotland. Of course, we recently passed through this House the new Scotland Bill, now an Act, which made some very significant changes resulting from the Calman commission recommendations. In respect of the eponymous formula of the noble Lord, Lord Barnett, the difficulty that we have among others is that there is no consensus across the UK on what could replace it. Since 1978, it has stood the test of time, and it is very difficult to find a better basis.
Lord Roberts of Conwy
Would my noble friend agree that ideally what is required is a formula that is adaptable to the special needs of Wales, Scotland and other national regions?
Lord Sassoon
Yes, indeed, I would agree with my noble friend that that should be the objective of any replacement for the formula.
Deficit Reduction
Debate between Lord Sassoon and Lord Roberts of Conwy(13 years, 10 months ago)
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Lord Sassoon
Well, my Lords, it has come to a pretty pass when the noble Lord characterises the investment in the banks as some sort of voluntary investment to make a return. It was necessary to bail out and save the British economy because the previous model of financial regulation had completely failed. Under the stewardship of the new Government, we will do our best to get back the investment, and hopefully more, that was necessarily put in by the previous Government. That is what we are doing.
Lord Roberts of Conwy
My Lords, would my noble Friend confirm that Royal Bank of Scotland and Lloyds banking groups have considerable liabilities, which will be added to the country’s net debt in due course?
Lord Sassoon
My Lords, as my noble friend says, there are liabilities as well as assets on the Government’s balance sheet as a result of the bailout of the banks. It will be a long process, in which the management of those banks is taking the leadership, to restore them to health, both for the benefit of the shareholders, including the nation, but also to ensure that they can continue to lend money to the businesses of this country.
Bank of England: Economic Forecast
Debate between Lord Sassoon and Lord Roberts of Conwy
Lord Sassoon
The critical question is about how we can see credit continue to flow to UK business, particularly small and medium-sized enterprises which cannot access the bond markets. Therefore it is encouraging that in the latest September data for August, credit conditions continue to improve modestly. That is critical. When it comes to bankers’ bonuses, there is unfinished business by both the Financial Services Authority and the Government to see what further action—whether that is disclosure or other measures—is appropriate to make sure that we get a proper balance in this area.
Lord Roberts of Conwy
Will my noble friend confirm that the Government are prepared to consider further quantitative easing if absolutely necessary, which does not appear to be the case at present?
Lord Sassoon
It is a question principally for the Bank of England, which has a clear inflation target, as to what further measures should be taken. I note that the recent IMF assessment is that the current monetary stance and data dependent approach to next steps is the appropriate one.
Banks: Business Lending
Debate between Lord Sassoon and Lord Roberts of Conwy
Lord Roberts of Conwy
To ask Her Majesty’s Government what is the trend in net lending by banks to United Kingdom businesses.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, net lending by banks to businesses in the United Kingdom has been on a downward trend since the end of 2008, with debt repayments exceeding new lending. Access to finance is essential if businesses are to invest, grow and make their important contribution to supporting the economic recovery. On 26 July, the Government published a Green Paper on business finance to help to inform and take forward their agenda on credit and other sources of finance for businesses.
Lord Roberts of Conwy
I am grateful to my noble friend for that reply. He clearly acknowledges that most British businesses, large or small, need the revived availability of bank lending on reasonable terms to grow and flourish, coupled preferably with a more stable and promising macroeconomic outlook and confidence inspired by the Government’s determination to reduce the deficit and reinvigorate our export trade, as the Prime Minister is doing in India today.
Lord Sassoon
My Lords, indeed, I do agree with my noble friend. What a surprise. The Government recognise that access to finance is absolutely critical for businesses to survive and grow and that small and medium-sized companies face particular challenges. We need a recovery led by sustained expansion in the private sector and, in particular, by growth in business investment, seizing the opportunities presented by a recovering global economy, which is at the heart of the Prime Minister’s visit to India this week. The Government agree that we must continue to support British businesses when they are ready to export and will continue to look, in particular, at the services provided by UK Trade & Investment and the Export Credits Guarantee Department, both of which have shown a significant increase in their export support during the past year.
Wealth
Debate between Lord Sassoon and Lord Roberts of Conwy
Lord Sassoon
My Lords, I am grateful to the noble Lord, Lord Bilimoria, because he enables me to say yet again how important it is that wealth generation is created and that the balance of the economy is switched from overdependence on the public sector and debt to dependence on the private sector and equity. That is why he did not mention—but I will—the reduction in corporation tax, the fact that CGT did not go up anything like as much as people had feared and a number of other measures in the Budget. He is right to draw attention to child poverty because the previous Government failed to meet their target of halving it by 2010.
Lord Roberts of Conwy
My Lords, is it not true that the gap between the richest 10 per cent and the poorest 10 per cent is actually at its greatest for 40 years? The party opposite were in Government for the best part—no, not quite the best part, but for 18 years, or almost half—of that 40 years. If we were in the blame game should they not take responsibility?
Lord Sassoon
My Lords, I completely agree with my noble friend. The policy of this Government is to increase wealth across the wealth distribution for everybody.
Economy: Growth
Debate between Lord Sassoon and Lord Roberts of Conwy
Lord Roberts of Conwy
To ask Her Majesty’s Government what is their strategy for promoting economic growth.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, today the Government have outlined their plan to support a private sector recovery and create the right environment for enterprise and sustainable growth. It will restore the UK’s international competitiveness through lower and simpler business taxation, and through cutting red tape. Fundamental to this strategy is tackling the budget deficit and providing the stable macroeconomic environment needed to underpin private sector investment and growth.
Lord Roberts of Conwy
I am grateful to my noble friend for that reply, supported as it is by the eximious Statement by the Chancellor of the Exchequer earlier today. Does my noble friend agree that, as we cut the record deficit left to us by a prodigal Government, one of the first essentials is to restore the confidence of the private sector to encourage businesses to invest, create jobs and bring about the prosperity that the country really needs?
Lord Sassoon
My Lords, I completely agree with my noble friend Lord Roberts of Conwy. Business confidence will now be underpinned by a credible deficit reduction plan, which will see the current structural deficit in balance by 2014-15. The public expenditure on infrastructure, which this country needs to underpin growth, is being protected and not further cut. Corporation tax will fall from 28 to 24 per cent over four years; entrepreneurs’ lifetime capital gains tax relief is being increased from £2 million to £5 million; the national insurance contribution threshold will increase by £21 per week above indexation; the enterprise finance guarantee is being expanded by £200 million to ensure that credit flows to business; and a new regional growth fund will be established. It is estimated that these and other policies will increase business investment by an additional £13 billion up to 2016.