Finance (No. 2) Bill

Baroness Bennett of Manor Castle Excerpts

Lords Hansard - Part 1 & 2nd reading & Committee negatived & 3rd reading
Tuesday 22nd February 2022 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Lord, Lord Bilimoria, and I will pick up some of the points he raised as I reach the end of my contribution. It is also a great pleasure to listen to the rich, informative speech from the noble Lord, Lord Sikka. Many people outside this Chamber would be interested to learn that the James Bond films enjoy a government subsidy. It does not seem like that, does it? When you consider the amount of money they must make from product placement, you really would not think that they also need to get a subsidy from the taxpayer to be able to make these films. Often, they look more like an advertisement than any sort of creative endeavour.

I want to begin by looking at the formal language behind this Bill—something I am continually informing myself on as I get to grips with the archaic, often incomprehensible, language of the governance of the UK. This is a language which reflects the distance of our Government from the life of the people of these islands. This is a Bill, I learn, of aid and supplies—aid, in this context, means taxation. It provokes the question: who is being aided by this Bill and who is not being aided by this Bill? First, the group I would identify as being aided by this Bill, by an act of omission—which is an action every bit as much as a provision is—are the oil and gas companies. As we heard earlier from the noble Lord, Lord Sikka, in Oral Questions, oil and gas companies are benefiting hugely from the rise in the global price of their product, while the cost of its production remains static.

That is the very definition of a windfall—wealth falling into your lap without effort—yet we do not see an oil and gas windfall tax in the Bill before us. That is despite the fact that the Chancellor, repute suggests, is a fervent disciple of Margaret Thatcher, and it was Margaret Thatcher who in 1981 introduced the first windfall tax on the banks, whose profits had leapt following a rise in interest rates. In her memoirs, Margaret Thatcher said that it was because the increased income was not because of increased efficiency or better services to customers but purely by economic accident that she brought the tax in. Can the Minister perhaps explain to me how the situation now with oil and gas companies is different from that of the banks in 1981?

Of course, there have been very widespread calls for an oil and gas windfall tax, going back to the Green Party leaders who called for it in the autumn. Some of the arguments we heard from the Government and the Benches opposite during the Oral Question from the noble Lord, Lord Sikka, just do not stack up. Investment in the North Sea contributes very little to the UK’s energy security—80% of its oil and gas is exported and the price is decided by the global market. Conversely, if we, say, had that windfall tax and spent it on a massive programme of energy-efficiency measures, particularly for private homes, that is something that could not be exported, could not be lost and could be directed towards the poorest in society.

It is worth noting that we do not hear the Government often talking—in that phrase they like to use—about “windfalls” when it comes to their oil and gas tax regime. This is not surprising, because it is one of the least effective regimes in the world. The Government pull in an average of $2 a barrel from production, whereas Norway, by contrast, collects $21 a barrel. As the noble Baroness, Lady Sheehan, pointed out on the Oral Question, our oil and gas majors are contributing only a derisory amount to investment in renewables. Where is the aid going? To the oil and gas companies. Who is losing out? Energy consumers and the general society.

Secondly, I come to another group being aided by this Bill, again by omission. We saw efforts in the other place to introduce reports on the progress of establishing a register of overseas beneficial owners of UK property and a review of HMRC’s publication of tax avoidance schemes. Opposition amendments to introduce such simple and moderate measures were defeated on party lines. Who does this aid? It is clear who the US and EU allies think it aids: Russian dirty money, much of it closely associated with the regime of President Putin, whose dangerous, aggressive actions we will be discussing later in this Chamber.

On 10 February, the Government laid legislation to allow the sanctioning of entities and businesses of economic and strategic significance to the Russian Government and their owners, directors and trustees. But to impose a sanction, you first have to be able to find the sanctionee. The highly respected NGO Transparency International reports that more than 85,000 properties in the UK are owned anonymously by entities registered abroad. It estimates that £1.5 billion of property is owned by Russians accused of corruption or of links to the Kremlin.

We have been promised this register of beneficial ownership in London since 2016. Provision was included in the 2019 Queen’s Speech, but despite the flood of Bills we are now seeing in your Lordships’ House—a Bill to attack some of the most vulnerable people on this planet: refugees seeking asylum on these shores; a Bill to suppress the turnout of voters least likely to support the Government; a Bill to reduce the capacity of our courts to defend the rule of law—the Government have not found time in the parliamentary agenda for this register to be created. Who is being aided here? I am afraid it is very obvious. Who is losing out? We are all losing out through insecurity for the people of the UK and damage to the security of the world.

Thirdly, I come to something that is apparently being aided by this Bill, social care, for this is the legislative mechanism by which the Government are bringing in the health and care levy. But is it really for social care? What is it doing to address the acute staff shortage or the extreme exploitation by hedge fund owners taking 16% of every pound paid for care? What will be its impact? The first two questions are very easy to answer: nothing. On the third, the Commons Treasury Committee points out that, with this levy being announced outside a fiscal event, Parliament has not been provided with important information that would usually accompany a decision of this kind, such as an independent impact assessment from the Office for Budget Responsibility or a distributional analysis. Who is being aided here? Not the overworked, underpaid care worker or the clients she is trying to serve.

Finally, I shall move away from the question of who benefits to an even bigger one: who decides? This morning, I was at a debate held by UK in a Changing Europe which reflected on the extreme centralisation of power and resources in the UK. Our local councils are left without the funds to provide essential services, simply delivering the statutory requirements decided by Westminster and unable to make the decisions they want to for their local communities. Of course, the centralisation is even tighter than Westminster dominating our councils and, as we often see in this House, resisting the devolved power that is supposed to have been handed to the nations of the UK. Power is in fact concentrated in one address in Westminster, and that is not the Prime Minister’s.

We are all familiar with a Minister apologising from the Dispatch Box opposite for some departmental failing, explaining that there is no money to fix it and rolling their eyes to the heavens, muttering “Treasury”. It is a gesture that is almost guaranteed to get a sympathetic laugh from all sides of your Lordships’ House. I have been delving again into the history of this. The Chancellor of the Exchequer is a post that predates that of Prime Minister by several centuries. The Treasury’s structure, like so much of our governance, was created in early medieval times. Interestingly, the department is the only one that has two Ministers in Cabinet. It has also been said that Prime Ministers govern via the Treasury.

We are aware that the Treasury sees its role as governing for the economy, maintaining economic stability and promoting growth. This is where I get to a bit of a response to the noble Lord, Lord Bilimoria. What is the Treasury operating for? It is operating for the economy and growth. The noble Lord talked about the period he obviously saw as a golden age, when we had regular annual growth rates of 3%. That was a period when we had 15%-plus of pensioners living in poverty. It was a period when we saw increased casualisation of the economy, with the gig economy growing and young people in particular finding it harder and harder to get a steady job. Fewer and fewer people were able to afford to buy or rent a home. We had growth and we had a society of poverty, inequality and very poor public health. The fact is that we have a situation in which people are working for the economy instead of the economy working for people. It is this dedication to growth—the Treasury’s chasing of growth —that has given us this situation.

There are other ways of doing things. I will point, as I have before in your Lordships’ House, to New Zealand—a system based originally on our Westminster model. Its Treasury is guided by the living standards framework. It looks at a balanced set of measures about the economy, yes, but also about poverty, inequality, public health and the state of the environment and says that we need to keep all these at a decent level when managing for people.

Lest noble Lords think that I am standing out here with something just the Greens are saying, I point to a report called The Tragedy of Growth, which was co-authored by, among others, Caroline Lucas, the Green MP, Clive Lewis from Labour and the noble Lord, Lord Deben, from the Conservative Benches. It points out that growth does not enhance living standards, alleviate poverty or protect the environment. To quote the report:

“To protect human wellbeing and avoid environmental disaster, we must escape the growth paradigm once and for all.”


I would say that we need to go further than simply escaping the growth paradigm; we need to see and escape from the dictatorship of the Treasury. There might be quite a number of Ministers and former Ministers in your Lordships’ House who will quietly agree with me.