Higher Education (Freedom of Speech) Bill

Viscount Younger of Leckie Excerpts

Report stage
Wednesday 7th December 2022 Lords Chamber

Moved by

[Viscount Younger of Leckie]

31: The Schedule, page 19, line 40, at end insert—
“(ca) after the definition of “the institutional autonomy of English higher education providers” insert—““member”, in relation to a registered higher education provider or a constituent institution of such a provider, has the same meaning as in Part A1 (see sections A1(11) and A4(4));“member”, in relation to a students’ union which is a representative body and not an association (see section 20(1)(b) of the Education Act 1994), means those whom it is the purpose of the union to represent, excluding any student who has signified that they do not wish to be represented by it;”;”Member’s explanatory statement
This amendment ensures that “member” (of a registered higher education provider, of a constituent institution of such a provider and of a students’ union) means the same in Part A1 and Part 1 of the Higher Education and Research Act 2017.

Coronavirus Grants: Fraud

Viscount Younger of Leckie Excerpts

Tuesday 25th January 2022 Lords Chamber

[Baroness Smith of Basildon (Lab)]

My Lords, this Question might seem familiar because it is the third time that we have asked it. I thank the noble Viscount, Lord Younger, for coming to the House to answer this today.

[Viscount Younger of Leckie (Con)]

Perhaps I should start by thanking my noble friend Lord Agnew for allowing me the opportunity to stand here today—

[Noble Lords]

Oh!

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

I promise that I shall stay the course. Throughout this dreadful crisis that we have had to endure over the past two years, the Government’s number one priority has been to protect jobs and livelihoods while also supporting businesses and public services across the UK. We had to work particularly quickly to produce some generous packages to give the necessary support back in lockdown 1.

[Baroness Smith of Basildon (Lab)]

I hesitated because I was not sure if the noble Viscount had finished—because, again, he did not answer the Question. Whistleblowing is vital in exposing undesirable or unlawful conduct. The Government rightly expect others to operate to high standards but do not seem to be able to meet those standards themselves.

Yesterday, the serious frustrations of the noble Lord, Lord Agnew, finally bubbled over, leading him to blow the whistle on his own colleagues as he departed. His lengthy statement yesterday exposed chaos and mismanagement across government, but it did not answer the question posed by my noble friend Lord Tunnicliffe. The Chancellor has gone AWOL, and, in his absence, although the noble Viscount did not give the figure today, other junior Ministers have insisted that putting the coronavirus fraud at £4.3 billion is too simplistic.

Taxpayers are footing the bill; your Lordships’ House and they deserve answers. If it is not £4.3 billion-worth of fraud, how much is it? If he has not got the answer today—I think noble Lords will understand why—can we at least be told when we will know and exactly how much of that the Treasury intends to write off?

[Viscount Younger of Leckie (Con)]

It is a slightly complicated picture, but the Government continue to work actively with the British Business Bank, lenders and fraud authorities to identify and address fraud risks and recover loans obtained fraudulently. On the noble Baroness’s question, the £4.3 billion figure is not recognised by HMRC; it is an inference made in the report by the Times, which I am sure the noble Baroness has read. The figure that was taken out of that was £5.8 billion, which was in the report and accounts of HMRC. Some £500 million, which was returned, should be deducted from that, so we think that there is £800 million to £1 billion to recover.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to my noble friend. Was not the object of the loan scheme to enable existing companies to continue trading through the pandemic? If, as we heard from my noble friend Lord Agnew yesterday, banks paid out money to companies incorporated post Covid, and did so negligently, are we not entitled to revoke the 100% taxpayer guarantee?

[Viscount Younger of Leckie (Con)]

Again, we should remember that, in lockdown 1—roughly from March to April 2020—there was a clear need for urgent action to encourage a greater take-up of different support measures. That is why we intervened to change the design of the bounce-back scheme to make it 100% backed, which led to £46 billion being sent to 1.5 million businesses. To take up my noble friend’s point, I am sure that lessons can be learned, but, at the time, it was imperative that the Government acted quickly.

[Lord Stoneham of Droxford (LD)]

My Lords, when Covid struck, HMRC stopped answering its fraud-reporting phone line—the phones just rang and rang. The alternative way of reporting fraud online required entering intrusive personal details that most people were afraid to provide. How much fraud does the Minister estimate has been unreported due to the Government’s attitude towards whistleblowers?

[Viscount Younger of Leckie (Con)]

The noble Lord’s question is focused on HMRC, but I can say that the expected losses to error and fraud in 2021 were £5.8 billion, and expected losses for 2021-22 will be published in due course. But a lot of work is going on in terms of recovery, and the expected recovery by HMRC is estimated to be between £1.3 billion and £1.5 billion.

[Lord Carlile of Berriew (CB)]

My Lords, did the Government anticipate the potential use of existing ready-made off-the-shelf companies as instruments of fraud? Is it yes or no?

[Viscount Younger of Leckie (Con)]

I think the answer has to be no. We had to move particularly quickly in very difficult circumstances. Of course, there is always a risk of fraud—all fraud is unacceptable, but there was a risk because we had to move quickly. As I say, there is a lot of work and, particularly from HMRC’s point of view, in the months and years ahead there is big scope to recover.

[Lord Browne of Ladyton (Lab)]

My Lords, fraud in government is rampant and is estimated at just under £30 billion—so writes the noble Lord in the Financial Times today. Why, in those circumstances, did the Government agree to drop the long-awaited economic crime Bill from next year’s legislatory list for Parliament to consider?

[Viscount Younger of Leckie (Con)]

I do not have an answer to that; I will have to get an answer to the noble Lord. I say again that the schemes brought forward during those very difficult times were designed in response to a pronounced market failure, particularly with the UK’s smallest businesses struggling to access the finance that they needed to survive at the start of the pandemic. Voices from across the spectrum, including from the party opposite, were shouting at us to be sure that we acted quickly. We were already doing so, but we continued to do so.

[Lord Cormack (Con)]

My Lords, I express sympathy for my noble friend: yesterday he took the letter and today he has drawn the short straw. Does he accept that this matter really is important now? This was an Answer to an Urgent Question in the other place, and it is important that we have a definitive Statement from the Government giving as many figures as possible. While I acknowledge that fraud is more difficult to detect than to denounce, we need to have these facts.

[Viscount Younger of Leckie (Con)]

My noble friend makes a very good point. As I alluded to earlier, HMRC and BEIS are working very hard in conjunction with the lenders to recover as much as we possibly can. I reiterate that the figures, as noble Lords will tell me, are big. We have paid out altogether more than £400 billion to support the economy. It is fair to say that to that extent it has been a great success, because the economy is in very good shape.

[Lord Patel (CB)]

My Lords—

--- Later in debate ---

[Lord Patel (CB)]

My Lords, I listened to the debate yesterday, in which the noble Lord, Lord Agnew, indicated that some lenders were failing on fraud. Can the Minister say which lenders are failing on fraud?

[Viscount Younger of Leckie (Con)]

I do not accept the premise that lenders are failing on fraud, and, of course, the noble Lord, Lord Patel, will know that I am not in a position to name individual lenders. However, lenders continue to work closely with the Government on counterfraud, including recovering £1.2 million on facilities identified as fraudulent so far. It is important that lenders are held accountable for taxpayers’ money, and all lenders continue to be subject to a robust audit process by the British Business Bank.

[Lord Sikka (Lab)]

My Lords, two 30-second checks would have saved the Government billions of pounds. First, no one can open an ISA account without providing a national insurance number, but the Government did not require that information from anyone seeking furlough support. Secondly, all applicants for Covid loans should have been required to provide an HMRC reference number. That would have killed off all dormant companies and offshore tax haven companies. Will the Minister please explain why these two 30-second checks were not applied?

[Viscount Younger of Leckie (Con)]

That is a very fair question and of course the sort of detailed question that I cannot answer. In terms of the fraud that we are looking to identify as part of the loan book, as of 17 December 2021 some £67 million worth of claims had been settled for the loan scheme. Of those, £13 million for 337 facilities had been flagged by lenders as suspected fraud. That is the sort of detail that we want to get into.

[Baroness Altmann (Con)]

My Lords, I too have sympathy with my noble friend the Minister, but will he reassure the House that the Government are looking seriously at the remarks and observations made by our noble friend Lord Agnew yesterday, particularly at any recommendations that he has for improving the situation and lessons learned at both BEIS and the British Business Bank, as well as at HMRC?

[Viscount Younger of Leckie (Con)]

I am aware that my noble friend has much experience in this area, linked to her work on pensions and in respect of HMRC. She is absolutely right: preventing fraud is incredibly important. We designed the schemes to prevent as much fraud as possible before any payments were made, while still quickly supporting those who needed them in unprecedented circumstances. For example, the first furlough payments went out within six days of being announced. We had to move quickly but, clearly, as she said, lessons will be learned.

[Lord Sandhurst (Con)]

My Lords, yesterday, my noble friend Lord Agnew of Oulton told the House that he was at odds with what he said was the Treasury relying on after-the-event audits, saying that this was “too reactive” and too late. Why have the Government relied on auditing lenders after the event instead of taking preventive steps beforehand?

[Viscount Younger of Leckie (Con)]

That is a good point. It is certainly something that I shall need to look into and I shall need to write to my noble friend about it. There is no question but that the auditing side is particularly important.

[Lord Vaux of Harrowden (CB)]

My Lords, the sorts of fraud that we heard so vividly described yesterday would have been a lot more difficult if directors’ identities had to be verified. The Government announced some 18 months ago that they would do that. When will they start insisting that Companies House verify identities of directors?

[Viscount Younger of Leckie (Con)]

That is certainly one of the lessons learned; I know that it is on the agenda to be looked at.

[Lord Harris of Haringey (Lab)]

My Lords, what is the point of designating a Minister as Minister for Fraud Prevention and then not listening to his advice? If you were the Chancellor of the Exchequer, surely you would want to listen to that advice and take some account of it.

[Viscount Younger of Leckie (Con)]

The House will have heard the question from the noble Lord, and I shall take it back.

[Lord Harlech (Con)]

My Lords, is it true that BEIS had only two officials working on counterfraud at the start of the scheme and they have so far refused to engage with the Cabinet Office?

[Viscount Younger of Leckie (Con)]

My understanding is that BEIS has invested significantly in the expansion of its counterfraud function, in terms both of increased resource and, critically, of capabilities. A key role of its counterfraud function will be to embed a governed and risk-assessed approach throughout BEIS and the arm’s-length bodies.

[Lord Watts (Lab)]

Yesterday, the noble Lord, Lord Agnew, was accountable and did the right thing, but is not the Chancellor of the Exchequer ultimately responsible for this mess and should he not resign?

[Viscount Younger of Leckie (Con)]

No, he should not resign. I go back to the most fundamental point, which is that we had to act particularly quickly back in lockdown 1 to support businesses. As a result, we put in the £400 billion package of economic support that I referred to earlier. That protected more than 14.5 million jobs and thousands of businesses. It is a great credit to the Chancellor that he took those bold steps.

[Lord Judge (CB)]

Has a police investigation into these frauds started? Has the Serious Fraud Office been involved?

[Viscount Younger of Leckie (Con)]

Not that I am aware of.

[Baroness Wheatcroft (CB)]

My Lords, as we seek to claw back money misspent over Covid, can the Minister tell us whether those who benefited from fast-track VIP PPE contracts and delivered unfit goods will be paying back the money?

[Viscount Younger of Leckie (Con)]

On PPE, we acknowledge the severity of these claims, and the DHSC takes its responsibilities around due diligence extremely seriously. Of course, this goes back a bit further. As the DHSC has recently set out, all offers that come to the mailbox are triaged by an official from the high-priority appraisals team to be processed and responded to.

Civil Procedure (Amendment No. 4) (Coronavirus) Rules 2020

Viscount Younger of Leckie Excerpts

Wednesday 23rd September 2020 Lords Chamber

[Baroness Greengross (CB) [V]]

My Lords, earlier this year, research by Age UK found that there were 750,000 private renters over the age of 60 in the UK. Older renters are often forgotten, and many live in constant fear of being evicted. This happened even before the pandemic. Some 28% of those who have been shielding during the pandemic usually work; half of these people are over the age of 50. That is why I, along with a cross-party group of 46 other Members of this House, recently wrote to the Chancellor asking him to give those who need it most job security and a decent income while the risks of Covid remain high. As the coronavirus job retention scheme or furloughs come to an end, there is a risk that many of these people will end up in rent arrears and face eviction.

One in five people aged between 50 and 64 are carers, as research from the Centre for Ageing Better in August last year showed. Many of these carers are forced to reduce their working hours and their income to care for loved ones, as we know. ONS figures from April this year found that 17% of employed carers had to reduce their working hours during the pandemic, while Alzheimer’s Society figures from 2019 showed that 112,000 people have left employment to care for family members who have dementia. Dementia Carers Count found that 36% of family carers provide care in excess of 100 hours a week.

The broken social care system means that carers’ incomes have been reduced during the pandemic; they are at greater risk of falling into rent arrears and now could also face eviction. A 2018 survey conducted by Mind found that one in four people said that having an unstable tenancy had impacted negatively on their mental health. A 2017 study by the Association of Mental Health Providers found that people with mental health problems were more likely to be evicted for either financial reasons or disproportionate anti- social behaviour. The same study found that people who are evicted tend to have worse physical and mental health than the average person. Moreover, the process of eviction itself can have profound psychological consequences and is associated with increased suicide risk. Do the Government have any plans to help these varied—

[Viscount Younger of Leckie (Con)]

I am sorry to interrupt the noble Baroness. Could she conclude her remarks?

[Baroness Greengross [V]]

Yes, I have concluded.

Outcome of the European Union Referendum

Viscount Younger of Leckie Excerpts

Tuesday 5th July 2016 Lords Chamber

[Lord Cashman (Lab)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Cormack. When he spoke of a woman to lead with decisiveness and a steely determination to get on with the business, I thought he was talking about Angela Eagle.

I am reminded of the closing words of “King Lear”:

The weight of this sad time we must obey;

Speak what we feel, not what we ought to say.

Therefore, it is with sorrow, not with anger, that I will dwell—unlike the noble Lord, Lord Butler—on the campaign. I recognise, too, the sadness on the government Benches and of the Government at a result they did not want. They campaigned for a very different result. None the less, there is a determination to sort out this mess.

I served for 15 years as an active Member of the European Parliament. During all my time there, and since, I have never recognised the European institutions as represented in this country or in debate. Alan Ayckbourn said that comedy is a tragedy interrupted. We are in the midst of a national tragedy of unimagined proportions, but we have witnessed tragicomedy in the wake of the referendum result as Johnson and Farage, like a latter-day Laurel and Hardy, shuffle off, leaving us with another fine mess that they have gotten us into. Then Michael Gove, having derided and diminished experts, now does a 180-degree pirouette and demands that they be brought in to sort out the mess. You could not make it up.

Into this interesting storyline and web of lies, deceit, hate and, yes, fear, the right-wing British press added its misinformation, disinformation and barefaced lies, undermining informed decision-making democracy. Yes, these are strong words. Truth was sacrificed. Immigrants and migrants were paraded as factors of fear and threats to our way of life. They became figures of hate—to our eternal shame. Was the right-wing press objective and fair, according to internationally agreed principles on election observation agreed at the United Nations? The answer is an unequivocal no. It serves me no great pleasure to state that.

A lacklustre media saw fabrication, ignorance and pure invention go unchallenged and uncorrected by presenters who should have known or been briefed better. The denial of a veto on accession, the £350 million a week that was supposedly going to Brussels, and the EU defence force—most of these claims went uncorrected. The disgraceful depiction of Turkey and Turkish people as negative and a threat to this country is unforgiveable. If nothing else, the leave campaigners owe an apology to Turkey and the Turkish people. I am afraid that I do not agree with the Leader of the House: this was not a great democratic exercise. It was a shameful campaign that diminished Great Britain and our place in the world, let alone Europe. Precisely when we should have supported the EU in the refugee crisis and the euro crisis, we abandoned any sense of solidarity and became self-obsessed and self-serving. In so doing, we threw away a thousand years of history.

We are now in a perfect political storm, rudderless, leaderless—yes, I refer to my own party, too—and clueless. Nearly two weeks after the referendum result, we wait for the leave plan. We wait in vain because plan comes there none. There was no plan—that is absolutely right. That is why Parliament must consider how to act, weighing the options carefully and slowly. This will affect not only our generation but generations yet to come, and the younger generation who feel betrayed—as noble Lords have said.

We must not be defined by right-wing, narrow nationalism nor by racism and xenophobia. Britain is better than that. We are better than that. However, a dark underbelly has been revealed and, I believe, encouraged by the right-wing press. That is deeply disturbing. I woke up on 24 June to feel like I did not belong in my own country, that my values of fairness, decency, human rights, justice and inclusivity had been rejected. Now, I am more determined than ever to uphold those values. They are British values and they are European values—a Europe born out of the ashes of the Second World War: ashes of people’s hopes and dreams, and ashes from crematoria dotted across Europe where people went because they were perceived and portrayed as different. Out of that history came a determination that we would never look away again, we would never scapegoat, we would never see country fight country for power, coal, steel or economic superiority. It is a Europe based on fundamental human rights. A Britain that helped to construct it now turns the other way.

EU nationals, to whom your Lordships have referred, currently reside here. On the issue of giving them reassurance, Downing Street was quoted as saying there will be, “no immediate change” to status. The Home Office Minister yesterday offered little more. However, the Foreign Secretary was quite clear and said it is “absurd” to guarantee a right to stay in the United Kingdom before a reciprocal deal is done for UK expats in the European Union. Whatever happened to leadership? We should show vision, some guts, and above all else some principles—the principles of a country with human rights and civil liberties at its heart, not at the fringes of a negotiating process. The House is clear: afford the right to reside and do it now. These people have settled here; they are employed and have businesses here; they have mortgages, and children in schools here. They are part of the fabric that holds our society together and we must not abandon them.

The most reverend Primate the Archbishop of Canterbury understood well that we must now come together as a nation. I suggest that that should not rule out the prospect of a Government of national unity. The most reverend Primate recognised clearly that inequality is at the very root of the disfranchisement and disempowerment felt by so many. We need to catch hold of that hope he spoke of, not abandon it, and find the means to celebrate difference and diversity as fundamental values of our country—an inclusive and outward-looking country. In the meantime, the comedians are leaving the stage and the tragedy continues to unfold.

[Viscount Younger of Leckie (Con)]

My Lords, a gentle reminder: several recent speeches exceeded the advisory Back-Bench time for this debate, which is seven minutes. If noble Lords adhere to this, the House might be expected to rise at not too late an hour tonight.

Strathclyde Review

Viscount Younger of Leckie Excerpts

Wednesday 13th January 2016 Lords Chamber

[Baroness Hollis of Heigham (Lab)]

My Lords, I very much welcome this debate and look forward to the maiden speeches that we will enjoy later, particularly that of my noble friend Lord Darling, my former boss at the time when legislation on tax credits was introduced in this House.

Why have this review? Is it because of tax credits? As I think has been conceded, that was a delay Motion and, happily, the Commons did indeed reconsider, as this House wished. But even if it had been fatal, which it was not, it would not have been a constitutional threat, as is acknowledged, because between 2000 and 2010 the Conservative Opposition, under the noble Lord, Lord Strathclyde, ran 11 fatal Motions against the Government. Five of them were led by former Ministers, including a former Leader of the House, and two of them were successful. No one had a tantrum; no one called for a review; no one proposed to legislate on the subject; no one threatened to create 100 Peers. The only difference now, as my noble friend Lady Smith said, is that the then Opposition are now in government.

Was the tax credits issue, none the less, a constitutional outrage because it dealt with financial matters? No, that will not run either. Most of what our work involves concerns finance, whether it is defence, transport, childcare or social security. The Government know perfectly well that SIs are not financially privileged and do not need to be if they are used, as they should be, for fairly minor matters according to our conventions. So in my view, it was not the tax credits vote that strained our conventions but the Government in the first place using a statutory instrument for a highly controversial measure that would take millions of pounds away from millions of families, despite the Prime Minister’s election promises to the contrary.

With tax credits, an SI was used not to apply the original policy intent of the Bill, which is what SIs are for, but to subvert it. As has already been said, that task should have been done by primary legislation, if that was the Government’s intent. Having chosen an SI route, which cannot carry financial privilege and to do what SIs were never intended to do, the Government then claimed retrospectively that financial matters come under some sort of informal financial privilege, which, even though it had not been sought, they wanted us to respect as though it had been—when it had not. That is indeed a straining of conventions.

Why then do we have a review? Is it petulance from the noble Lord, Lord Strathclyde? Surely not. But the Government do seem to feel hard done by, victimised, with their 30.5% of the vote. As Ministers, we had 31% of the vote. We did not whinge, despite huge majorities down the other end; we worked for our votes the hard way. No, the issue that really matters is not the tax credit vote, as the noble Lords, Lord Strathclyde and Lord Wakeham, have acknowledged. The issue is the expanding role of SIs and their lack of scrutiny. Thanks to the noble Lord, Lord Strathclyde, this debate allows us to discuss this more fully, to which I now wish to return.

More and more, we have framework legislation—for social security, childcare, the Cities and Devolution Bill—where key decisions are to be carried by SIs beyond reach of amendment, sometimes drawn down months, even years, later. That role was never intended: nor, I believe, is it appropriate. Bills are now being future-proofed for future Secretaries of State with open-ended SIs that place future policy development beyond effective scrutiny.

The noble Lord, Lord Strathclyde, calls for greater clarity and certainty surrounding SIs. That is nice—for the Government. But what is really needed is effective scrutiny. I doubt that the Commons can do it, and I think that we can and that we should. Only we have the admirable delegated powers and scrutiny committees, and your Lordships have relevant expertise. We spend twice as much time as the Commons on debating SIs, even though we all know that we are wasting our time. As the Hansard Society says, we have the interest, appetite and time to do effective scrutiny.

So why do we not? We know why. The noble Lord, Lord Strathclyde, is right: we should, but do not usually, get draft SIs during the process of the Bill so that we can consider them. We cannot, as a result, amend SIs that are passed and brought to us subsequently. Motions to Regret deplore and are ignored; fatal debates debate and destroy. However, in certain circumstances, either may be appropriate.

However, in 65 years, the Lords has rejected only five of the 169,000 statutory instruments before it. In 35 years, the Commons has not rejected one. As the noble Lord, Lord Goodlad, said in his report on page 147, why bring SIs to Parliament at all if parliamentary scrutiny makes no difference? The noble Lord, Lord Wakeham, called for a suspensory veto to “force”—which he italicises—the Government and the House of Commons to take our concerns seriously. They were strong words from the noble Lord and he was absolutely right. Every review of Lords practices has called for a power of delay requiring the Government to think again while ensuring that the final say rests with the Commons.

Would option 3 in the report of the noble Lord, Lord Strathclyde, do that? It could, but only if it specified, as the noble and learned Lord, Lord Wallace, said, the period of delay—say 30 sitting days—before the SI returns to the Commons. Otherwise we could pass a delay Motion and the Government could take it back to the Commons, without reflection, with irritation and within 48 hours. The noble Lord, Lord Strathclyde, assures us that a Government would never behave like that. You think? He writes that the Commons may need to override the Lords rapidly in cases of urgency. If something is indeed urgent—such as national security —would we really delay? It seems deeply implausible and, in any case, the usual channels would sort it.

He then fears that the specified delay might run past the proposed implementation date. That is pretty feeble, too. With the Library’s help, I checked the 60 or so statutory instruments we have had so far in this Session. As we know, they have three stages: they are laid, debated and implemented. I agree that with perhaps four of those 61 there was less than six weeks between laying the SI and its implementation date—for example, the Northern Irish election order last July and the Asian banks immunity order last October—but most of the rest were laid three to six months before their implementation date. There is adequate time for a delay Motion if those SIs are debated in good time. What struck me was the length of time, often three months or more, between laying and debating them. However, that can be sorted by effective departmental and business management; it is not a pretext for denying us and the public effective scrutiny.

The only real argument against a specified delay period is the one the review will not admit to: that it would be highly inconvenient for the Government. Yes, it is meant to be. I would not expect a delay Motion to happen very often—perhaps half a dozen times a year—but the fact that it might—

[Viscount Younger of Leckie (Con)]

My Lords, I am sorry to interrupt but the noble Baroness might be aware that the guide time for speeches is six minutes.

[Baroness Hollis of Heigham]

It is an advisory time and I am coming to the end.

I would not expect a delay Motion to happen very often—perhaps six times a year—but the fact that it might would transform the value of our scrutiny; it would transform the care with which departments bring SIs to this House. The Lords would be doing exactly what it should by asking the Government and the other place to think again and then respecting their decision, as we should, when they have done so. So I hope that we can move down that path but with appropriate specified delay periods.

Living Wage

Viscount Younger of Leckie Excerpts

Monday 9th June 2014 Lords Chamber

[Lord Haskel]

To ask Her Majesty’s Government what measures they are taking to ensure that all those in work receive a living wage.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)]

We support businesses that choose to pay the living wage when it is affordable, and not at the expense of jobs. The Government are committed to improving living standards. We have cut taxes for the lowest paid, allowing them to take home more of what they earn, and we have introduced tougher penalties and naming for employers who have failed to comply with the national minimum wage, which maximises wages without damaging employment.

[Lord Haskel (Lab)]

But the Minister’s words are not carried out in practice. The reality is entirely different. Is the Minister aware that during the last three years, two-thirds of the increase in social security payments to people of working age has gone to people in work? So while the Government are cutting public services, the taxpayer is supporting low pay. Given that support, does the Minister agree that the taxpayer would be better served if instead the Government were more rigorous in getting employers to become more productive, so that they could pay a minimum wage on their own?

[Viscount Younger of Leckie]

I certainly agree with the noble Lord that we are encouraging more employers to be productive. Much work has been done to that effect but I point out to him that the minimum wage is now increasing faster than earnings. The rise of 3% in the adult rate will mean that low-paid workers will enjoy the biggest cash increase in their pay packets since 2008. A rigid formula does not allow for changing economic circumstances, for example imposing a target set by politicians. That would result in job losses if it is set too high and lower earnings if it is set too low.

[Lord Forsyth of Drumlean (Con)]

My Lords, does my noble friend not agree that the most important thing is take-home pay and that therefore the Government’s efforts to reduce the burden of tax on the low aid are what matter? Does he not think that an Opposition who refuse to deny that they would increase national insurance if they were in government have a cheek talking about the effect on living standards of taxation?

[Viscount Younger of Leckie]

My noble friend makes some good points. The only real way of achieving sustainable increases in living standards is through focusing on economic growth, employment and reducing taxes for the low paid, as he said. Christine Lagarde, the managing director of the IMF, said recently that the IMF had,

“underestimated the growth of the UK economy”.

In a significant turnaround, the fund’s latest assessment found that the UK economy had rebounded strongly.

[Baroness Lister of Burtersett (Lab)]

My Lords, welcome as the Minister’s support for decent wages is, wages cannot take account of family size. What steps are the Government therefore taking to restore the cuts in child benefit that they have made in order to protect the living standard of low-paid workers with children without subsidising low-paid employers, in the way mentioned by my noble friend Lord Haskel?

[Viscount Younger of Leckie]

We know that some households, including those with children, are seeing the amount that they spend on food increase but there is much that the Government are doing to resolve this. The Government provide a number of schemes to help the most vulnerable to afford and have access to nutritious foods, such as the Healthy Start scheme and free school meals. However, we also recognise the extremely valuable work of civil society in supporting local communities. There has always been a tradition in this country of voluntary and charity organisations providing support to people, as the noble Baroness will know, in addition to the safety nets that the Government provide.

[Baroness Humphreys (LD)]

My Lords, many workers on minimum wage continue to be trapped on low pay. The Resolution Foundation recently suggested that some sectors of the economy and businesses in London could probably well afford to pay more than the minimum wage, and recommended that the Business Secretary ask the Low Pay Commission to publish an analysis of the situation. Do the Government endorse the foundation’s recommendation?

[Viscount Younger of Leckie]

We encourage businesses to pay the living wage—indeed, the living wage or above. However, I say again that a mandated pay floor, completely detached from an affordable level, is likely to bring about job cuts. The National Institute of Economic and Social Research has estimated that increasing the national minimum wage to the living wage would cause a net job loss of 160,000.

[Lord Young of Norwood Green (Lab)]

My Lords, I trust that the Minister would agree that the introduction of the minimum wage in fact benefited millions of people who were on appalling levels of pay. Perhaps the problem with the minimum wage has been to ensure its consistent enforcement. At long last, the Government have got down to improving those measures but we still have a long way to go. What consideration has been given, first, to increasing the penalties, secondly, to ensuring that local authorities play a part in ensuring enforcement of the minimum wage and, thirdly, that all those who fail to pay it—including a major premier football club—are named and shamed?

[Viscount Younger of Leckie]

The noble Lord makes some good points about enforcement. We are taking strong action on this front. He will be aware that 25 other firms have been named and shamed in the past few days. The case of the Premier League football club that the noble Lord raises was dealt with under the old naming policy, pre-October 2013, and did not meet the financial criteria of £500 per worker so could not be considered for naming.

[Lord Flight (Con)]

Does the Minister accept that there is an element of chicken and egg in the comments of the noble Lord, Lord Haskel, and that it is actually since the Labour Government brought in tax credits that productivity has been flat, wages have not risen in real terms and the situation has been much the same as in the early nineteenth century when wages were subsidised?

[Viscount Younger of Leckie]

The noble Lord makes a good point. It is fair to say that Labour’s plan for encouraging tax breaks to encourage employers to pay the living wage applies for 12 months only and will cover less than one-third of the increased cost to the employer. Increasing the cost of employment could encourage businesses to employ fewer people. Labour’s estimates of the cost of this policy ignore these issues, and the party has considered only potential benefits to the Exchequer.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, I wonder if the—

[Baroness Howarth of Breckland (CB)]

My Lords, I do not think any of the Minister’s replies have explained how his strategy will take out of poverty the millions of children who have just been illustrated in the report of one of the Government’s own commissions. It recognises that many families where there is childhood poverty, even though someone in the household is employed, are not being helped. What strategy do the Government therefore have to reach the jointly agreed target to take children out of poverty in the next decade?

[Viscount Younger of Leckie]

Several strategies are in place, but above all the main point is to encourage more jobs. We have created many millions of jobs and encouraged apprenticeships over the past few years since 2010. That is the way forward: to increase employment and job security for all in the UK.

[Baroness Armstrong of Hill Top]

I wonder if the Minister would say more about the report today from the social—