Overseas Territories: Tax Haven Status

Lord Watts Excerpts

Monday 26th February 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I absolutely agree that we need to support the overseas territories. We have the skills, capacity and capability to do that, and that is what we do—but recognising that the relationship with each of them can be very different. They have elected Governments of their own. Those Governments are responsible for their domestic affairs. The noble Lord mentioned timeframes of five years. The British Virgin Islands, which I admit is probably towards the end of introducing the beneficial ownership registers, is looking at putting a framework in place no later than quarter 2 of 2025.

[Lord Watts (Lab)]

My Lords, can the Minister explain why, at a time when British people are paying more tax than they ever have done, the richest people in the world and in this country are avoiding tax altogether—people such as the part-owner of Manchester United, who now apparently wants the taxpayer to give him billions of pounds to invest in his business? Where is the fairness in that?

[Baroness Vere of Norbiton (Con)]

Obviously, I cannot comment on any individual’s tax affairs, but it is the case that overseas territories are non-sovereign jurisdictions. They have a unique relationship as part of the British family, but they set out their own tax legislation within their own legal structures and it is certainly not for the UK Government or Parliament to drive a coach and horses through that.

Buy Now, Pay Later: Regulation

Lord Watts Excerpts

Wednesday 7th February 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I do not always. There seems to be a “computer says no” attitude to newfangled things. I absolutely reject that. While noble Lords may or may not use buy now, pay later, I know many young people who do, and they do so very successfully. I would not want to overregulate a product or get it wrong, thereby causing that product to be removed from the market.

[Lord Watts (Lab)]

The Minister says that there needs to be regulation, that the Government have gone out for consultation and that they are now considering it. To ask the same question I ask of Ministers all the time: where is the timeline for that? When will the Government act rather than talk?

[Baroness Vere of Norbiton (Con)]

We will act by publishing the results of the consultation and our response to it in due course.

NatWest: Account Terminations and Branch Closures

Lord Watts Excerpts

Wednesday 10th January 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I am very grateful to the noble Lord for allowing me to highlight to the House that that statutory instrument, laid before Christmas, comes into force today. It means that banks should not treat all politically exposed persons the same; domestic politically exposed persons, as well as their family members and close associates, will be subject to a lower level of checks. In terms of “know your client”, it is important that we have the right balance between the information the banks have about the client and any concerns about their involvement in illicit finance. There are money laundering regulations in place but they are not prescriptive—firms must apply them in a proportionate fashion and appropriate guidance for banks on customer due diligence has been published by the Joint Money Laundering Steering Group.

[Lord Watts (Lab)]

My Lords, does it not show the weakness of the present regulation when banks are closing thousands of their branches all around the country, withdrawing services to their customers, and then promising banking hubs that they do not introduce? Do we not need stronger government and stronger regulation?

[Baroness Vere of Norbiton (Con)]

I have to disagree, because that is exactly what we did, by making the change in the Financial Services and Markets Act. We are now putting that into place. Now, of course, we cannot do that immediately. A consultation is live at the moment and it will bring together all the information we need to ensure that customers get the banking services they need.

Financial Stability: Private Equity Firms

Lord Watts Excerpts

Wednesday 13th December 2023 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I am not aware that there was a question there—but if the noble Lord wants to send his sympathies, I am sure they will have been heard.

[Lord Watts (Lab)]

Given the recent problems with the Truss Budget, was the Bank of England informed of the Budget before it was announced—and if not, why not?

[Baroness Vere of Norbiton (Con)]

I am afraid that the noble Lord speaks about things I have no knowledge of.

Local Authorities: Budgets

Lord Watts Excerpts

Tuesday 19th September 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, I repeat what I said about the recent spending review being the largest increase to core spending powers for local government in over a decade. Additionally, we have put significant support into the arts and culture sector through not only the culture recovery fund during the pandemic but, for example, support to swimming pools— they face high energy costs during the current period of inflation—in the last Autumn Statement. We continue to provide that specific support.

[Lord Watts (Lab)]

My Lords, have the Government not been fiddling with the local government finance system for years? Do we not now need an academic study to come forward with a plan for local government funding that takes into account deprivation and the need to spend?

[Baroness Penn (Con)]

I do not agree with the noble Lord’s analysis but, as I said to the noble Baroness in my Answer, our approach takes councils’ relative needs into account. We recognise that this may need to be looked at again but, to provide councils with certainty, that will not be done during this spending review period; it will be looked at after the next Parliament.

Inheritance Tax: Cohabiting Siblings

Lord Watts Excerpts

Tuesday 20th June 2023 Lords Chamber

[Baroness Penn (Con)]

I have to disagree with my noble friend that the wealthiest do not pay inheritance tax. Statistics from 2019-20 show that tax paid on estates valued at £1 million or more accounted for 82% of total inheritance tax liability for that year. When it comes to reforming inheritance tax and looking at areas such as agricultural property relief and business property relief, we would need to be really careful about considering the impacts of changing that approach on family farms and family businesses before taking forward such changes.

[Lord Watts (Lab)]

My Lords, the Minister said that the Government introduced the pension changes to help GPs to be retained in the National Health Service. However, is it not the case that the majority of the savings will go to rich people rather than GPs?

[Baroness Penn (Con)]

I have to disagree with the noble Lord. The feedback we have had comes not just from the medical profession but from people in many other public service jobs who benefit from defined benefit contribution pension schemes and who have found their annual allowance and the lifetime allowance to be a real barrier to staying on in their work. It was in response to campaigns such as those from the BMA that the Government took action.

Tourist Spending: VAT

Lord Watts Excerpts

Wednesday 24th May 2023 Lords Chamber

[Baroness Penn (Con)]

As I have said to noble Lords, the Treasury took into account a wide range of information when reaching its decision. Indeed, the Treasury was judicially reviewed on the decision to withdraw the VAT RES scheme in Great Britain and successfully defended it, with the judge noting the thorough government analysis. As more evidence and data emerge in this area, we will of course keep it all under review.

[Lord Watts (Lab)]

My Lords, perhaps the Minister could give us two figures. What has been the increase or decrease in VAT since this change took place, and what has been the increase and decrease of sales in duty-free shops?

[Baroness Penn (Con)]

It is difficult to disaggregate the impact of this policy versus the overall take of VAT, which will be affected by a wide range of economic factors during this time. When we think about the tourism sector, we must remember that China represents a large number of visitors to the UK and China opened up only at the beginning of this year. Based on that, we hope to see a stronger recovery this summer, compared with previous summers.

Theatre Tax Relief

Lord Watts Excerpts

Thursday 9th March 2023 Lords Chamber

[Lord Watts (Lab)]

My Lords, the creative industries are one of the most successful industries in the UK. Is there not a lesson in that the more support the Government give them, the more successful they are? Do we need a cross-party approach to this, so that all departments contribute in the way that they do, for example, in Ireland?

[Baroness Penn (Con)]

I absolutely agree with the noble Lord about the contribution made by the creative industries to our economy and society. That is why the Government put such world-leading support into them. I am sure that we welcome the cross-party approach of Labour supporting the Government in this area.

Wales: Additional Financial Resources

Lord Watts Excerpts

Wednesday 18th January 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, there was a considerable extension to the Welsh Government’s powers relatively recently, and I would put the emphasis on those powers being used to their fullest effect before we return to this question again.

[Lord Watts (Lab)]

My Lords, is it not the case that the allocations to Scotland, Wales and Northern Ireland were made before the Tory Government wrecked the economy? Is it not time that we reviewed those allocations and, at the same time, the pay issue, which was also set before the Government wrecked the economy? That has had a dramatic effect on both.

[Baroness Penn (Con)]

My Lords, if the noble Lord is talking about levels of inflation, they have been largely driven by external factors such as Russia’s invasion of Ukraine. As I have already reassured the House, in addition to the fact that the 2021 spending review settlement was the largest since the devolution Act, it is also growing in real terms this year and over the spending review period, even taking into account that higher level of inflation.

Stock Markets

Lord Watts Excerpts

Thursday 17th November 2022 Lords Chamber

[Baroness Penn (Con)]

The noble Lord will know that risks come alongside being a premier financial centre. The important thing is that we take action to address those risks. That is what the Government have been doing and will continue to do. We had part one of the economic crime Bill in the previous Session and part two will be forthcoming.

[Lord Watts (Lab)]

My Lords, the rest of Europe faces the same problem as the UK. Why are we are being hit harder than many other European countries?

[Baroness Penn (Con)]

The noble Lord is right in one respect: both the rest of Europe and the UK face heightened energy prices as a result of the war in Ukraine, and jurisdictions such as the US do not face equal pressures. But the UK also faces a tightness in its labour market that we see in the US, for example, that is not seen in other European countries. Factors have come together to make things harder for the UK in the current circumstances.