(1 week, 3 days ago)
Lords ChamberThe noble Baroness is speculating on a speech that has not been delivered yet, so perhaps we should wait for the Mansion House speech this evening to see what my right honourable friend the Chancellor of Exchequer says in it. Absolutely, though, the Chancellor wants to see a greater rebalancing from risk to growth. I think that is absolutely right, but of course, we must make sure that we continue to regulate to avoid risk while we also maintain growth.
My Lords, the Opposition seem to be suggesting that we can cut taxes without finding a way of bridging that gap in the Budget. Does my noble friend agree that it looks as though the Truss fantasy politics and economics that we saw nearly bring the country to its knees are still there with the Opposition?
I completely agree with my noble friend on that point. Every time we hear from the party opposite, it opposes every single measure we have taken to stabilise the public finances, yet at no point has it opposed the spending that that has gone to fund. That is exactly the mistake Liz Truss made in her mini-Budget, which saw mortgage payments rocket for working people. They are still paying the price of those higher mortgages, and that is something we absolutely will not do.
(1 week, 4 days ago)
Lords ChamberI agree with almost everything that the noble Baroness said, but she failed to point out that it was her Government that established the existing system and it is this Government who are reviewing it with the intention of changing it. I agree with all the criticisms that she puts forward, but they are criticisms of her own Government. As I say, we have set out a review, and officials are currently engaging with stakeholders to understand the impact of any reforms and have so far held multiple round tables covering some 70 businesses. All available options will be considered, and we will come forward when we have concluded the review.
My Lords, can the Minister tell us how long this has been a problem, and whether anyone attempted to resolve it over the past 15 years? Can he say whether this is another case in which this Government have failed to put right 14 years of Tory mismanagement?
It is not quite 14 years, I think; these rules came in in 2021. The previous Government prioritised trade facilitation in the aftermath of Brexit and, since 2021, VAT on imports below £135 is collected at the point of sale to prevent congestion at the border. However, this has opened up some opportunities for the rules not to be followed. We recognise that and have established a review, which the previous Government did not.
(2 weeks, 1 day ago)
Lords ChamberThe noble Baroness knows that I will not comment on specific financial market movements, but I will write to her on stablecoin if that is okay with her.
My Lords, we have just heard that the benefits system is broken. Can the Minister remind us who broke it? Is this not a case of having to clear up the mess that they left?
My noble friend is absolutely right to point out the mess that we inherited and why so many difficult decisions had to be taken. He is right to point to the mess they left us in the welfare system; I think we had the highest proportion of people not working and were the only country in the G7 where worklessness had not returned to where it was pre pandemic. We also had to clear up a mess in the public finances, which is why, as he rightly says, we have had to take so many difficult decisions.
(2 weeks, 3 days ago)
Lords ChamberThere are two things here: the fiscal framework and the fiscal rules. On the fiscal framework, we have moved to one fiscal event a year, which is the November Budget. There are two fiscal forecasts, in the spring and in the autumn. The noble Lord is absolutely right: we should not give a running commentary on the fiscal forecast. That is, quite properly, for the Office for Budget Responsibility to do. It will do that in the usual way ahead of the annual Budget, and then the Chancellor will make decisions based on that forecast.
The noble Lord talks about the fiscal rules. The one thing I will say is that the changes to the fiscal rules that we made when we came into office were to enable us to invest sustainably in infrastructure and in public services, to stop the cannibalisation of investment to patch up day-to-day spending which we saw under the previous Government. It is interesting that the party opposite has opposed that change to the fiscal rules yet still supports the additional investment that that changed fiscal rule brings. Again, I am not sure that that is entirely consistent.
My Lords, will the Minister rule out following the example of the Truss Government, who crashed the economy? Has he received an apology for being left such a sad state of affairs in the economy that we have inherited?
My noble friend is absolutely right. It is exactly because of the experience of the previous Government—that disastrous Liz Truss mini-Budget, which saw mortgage rates spiral and from which working people are still suffering higher mortgage payments—that it is so important that we maintain fiscal responsibility and why we absolutely continue to adhere to our fiscal rules.
(2 weeks, 4 days ago)
Lords ChamberAfter the measures we took in the Budget and the Spring Statement, no one could possibly say that we are not sufficiently resourcing the fight against the tax gap. As I said in my original Answer to my noble friend, the National Audit Office recognises in its report that this Government are scaling up compliance activity to tackle serious offshore non-compliance and have committed further funding to do so. It also recognises many of the measures we are taking, including, as I said earlier, significant additional investment in compliance officers by the end of the Parliament. The noble Lord will recognise that this is the most ambitious package to close the tax gap ever; we have committed an additional £660 million each year for measures to do so and by the end of the Parliament we will raise an additional £7.5 billion a year.
My Lords, is it not disgraceful that some of the richest people in Britain get honours despite registering for tax purposes in places such as Monaco? As well as that, they are usually first in the queue for tax payouts if they want a subsidy for their business. Is it not time that we took a tougher line on these freeloaders?
I do not think the honours system is for me to comment on. The noble Lord will be pleased to know that we are taking the action I have already described, and we also intend to take further action to close the tax gap. At the Spring Statement, we published consultations on a wide range of issues, including widening the use of third-party data to help HMRC reduce error; strengthening HMRC’s ability to act against those tax advisors who facilitate non-compliance; and closing in on promoters of marketed tax avoidance.
(1 month ago)
Lords ChamberI am grateful to my friend for his question. I will say honestly that I had not thought of it in that way before, but I can absolutely see the point that he is making. My noble friend started his question by talking about the important role that BIDs play. There are, as he knows, more than 340 BIDs now operating in the UK, which are cumulatively investing more than £154 million each year in their local areas. I think the type of initiative that he described is exactly the type of work that they, in some areas, do, and I am sure could do more widely. So I very much agree with the point that my friend makes.
My Lords, are the Government considering using business rates to encourage live music in pubs and clubs? That could have a massive effect on making, certainly pubs, more interested in providing music on weekends.
That is a very interesting proposal from my noble friend. As I say, we will set out an interim report later this summer, setting out a clear direction of travel, and let us see whether those ideas are included.
(1 month, 2 weeks ago)
Lords ChamberI agree with the noble Lord’s point, which is exactly why we have embarked on the EU reset and negotiated a new strategic partnership with the EU that is in the national interest. I completely agree that the EU is our closest partner and biggest market. In 2024, almost half the UK’s total trade was with the EU and around 94,500 UK businesses exported goods to the EU, which is why the EU reset is so important. We negotiated a defence pact with the European Union, and we negotiated an SPS agreement with it to make exports easier. We have moved closer to agreeing closer co-operation with the EU on energy and the ETS, and we have agreed that we will work towards establishing a balanced youth experience scheme with the EU. All these things will move us closer to our biggest and most important market.
My Lords, is it not the case that we inherited a bankrupt economy and low growth, and that we had no prospects in the UK until we had a Labour Government? Is it not going to take more than a couple of months to turn around the mess that the last Government left?
I completely agree with my noble friend.
(1 month, 2 weeks ago)
Lords ChamberI am happy to give the noble Baroness those commitments.
My Lords, the Opposition suggested that the Government have put pensioners behind the NHS and teachers. Does the Minister agree that the Tories do not seem to want to tell teachers or NHS staff that they want them to be poorer?
My noble friend is obviously right to point out that the party opposite has consistently criticised the public sector pay rises that we have given.
(1 month, 3 weeks ago)
Lords ChamberI do not think any specific guidance has been given in the way that the noble Lord asks, but the most important thing to say here is that the banking sector should never take a blanket approach to any one sector. Of course, the decision as to what banking services to offer is ultimately a commercial decision but, as I said, banks should not take a blanket approach and they should make sure that decisions are taken on a case-by-case basis. The Government are actively engaging with banks to ensure that they understand the importance of the defence sector. The FCA has worked to understand why banks might close or reject accounts, and where it has found areas where firms need to improve customer outcomes, the Government expect them to consider the FCA’s findings and take them very seriously.
My Lords, is this another case of a regulator letting the British public down? Should we not press the regulators to do the job that they are supposed to do, and if they do not do it, remove them?
(2 months, 1 week ago)
Lords ChamberThe noble Lord is right that there is still a lot of work to be done. But having spent time with the many very capable and hard-working officials who have been part of this deal, it is worth acknowledging the hard work that has gone into this, which we are very appreciative of. The reality of this situation is that it has lifted some of the barriers to trade for many of our industries and some of the key sectors that we really value—for example, the automotive, steel and pharmaceutical industries. The noble Lord is right that there are still a lot of industries that have not been covered by the scope of this agreement. We are just starting on our journey, making sure that we can build on the strong trading relationship between the US and the UK and continue this approach of removing the onerous tariffs and supporting the people, industries and sectors supported by this.
The areas that have been covered by this agreement employ over 320,000 people within the UK, with a further 260,000 jobs within the UK supporting these sectors. Yes, it is just the first step in negotiating the fuller economic situation with the US, but I think the noble Lord will agree that it is a very powerful one.
My Lords, is it not the case that no matter how good a deal we do with America, Europe is our most important trading partner and the one that we should concentrate on and get the most out of?
I agree with my noble friend that our trading relationship with the EU is incredibly important. I do not believe in the premise of false dichotomies or that we are picking between one and the other. This is a continuing relationship and dialogue. I note that there is a very important EU summit coming up in May, which should really endorse and build on our relationship with the EU.