Customs Safety, Security and Economic Operators Registration and Identification (Amendment etc.) (EU Exit) Regulations 2020

Baroness Kramer Excerpts

Thursday 19th November 2020 Lords Chamber

[Baroness Kramer (LD) [V]]

My Lords, my colleagues and I do not object to this SI. Given how little prepared this country is to cope with imports from the EU into the UK, the six-month delay in requiring ENS declarations is inevitable. How likely are the Government to hit the July target and the staging posts in between? On the continent, all countries’ customs organisations have completed their preparations, and they too have experienced Covid.

To what extent does the Government’s expectation that SNS declarations will not apply to goods transported from the GB to Northern Ireland rely on breaking international law? It would be helpful to understand.

I would also like the Minister to help me understand some rather more granular issues, in particular the impact of post-transition customs barriers on the flexibility or loss of flexibility for hauliers in determining their route when crossing the Channel. I particularly have in mind the accompanied roll-on, roll-off traffic which handles most of the perishable and critical just-in-time cargo. For example, car factories in the UK order parts in the morning from EU suppliers that are to be put into the production line in the UK that afternoon and vice versa. The Explanatory Memorandum accepts that it is the norm for drivers on the Continent to decide whether they will use the Calais-Dover ferry or Eurotunnel only as they approach the entrance at Coquelles or Calais. Does the requirement for declarations to be filed even just two hours pre arrival allow flexibility for such decision-making and a change of route to continue in the same way as now? It has been very important in managing issues around congestion through industrial action or, indeed, a change in destination delivery.

Reading the Government website for ro-ro traffic from the UK to the EU, I cannot work out how much flexibility will exist in that direction. Again, drivers decide between the Dover-Calais ferry or Eurotunnel only after leaving the M20. I can see from the website that the process of getting export clearance has multiple steps in which the exporter files details, including the vehicle registration number, often known only at loading, along with customs duty tariffs and presumably rules of origin, also often known only at loading. HMRC then notifies the exporter if more documentation is required or gives permission to progress to port. How flexible is this side of the regime? What happens if the haulier wishes to combine loads at the last minute? Is the entry paperwork different going into France, Belgium and Holland? I believe that it is. Also, have the EU states had time to adapt to the new UK systems? Given that some of them are still a work in progress, it seems quite tough to expect someone else to integrate with systems we have not completed.

Large companies have the resources to cope with these changes, expensive though they are, but the Minister will be aware that 150,000 exporters to the EU have never experienced a customs regime and many of them have been unable to prepare for the change, especially as they are dealing with Covid and because they do not know exactly what the systems are. The NAO notes that the Government’s latest reasonable worst-case planning assumption of September 2020 is that 40% to 70% of laden lorries may not be ready for border controls. It has also made clear that the customs intermediary market, which most small exporters rely on and will have to use, is inadequate, despite some recent investment by the Government.

Many of the Government’s new IT systems, while welcome, are either unfinished or are still being tested, leaving businesses with only a tiny window to understand what is needed to adapt to them and then to implement the adaptation. Will the Minister update us on the readiness status of NCTS, which is the new computerised transit system, GBS&S, the safety and security system, and GVMS—the Goods Vehicle Movement Service. Where are we on the migration from CHIEF, Customs Handling of Import and Export Freight, which at least is understood, to the Customs Declaration Service, which appears to be a major headache? Indeed, why has the CDS not been delayed, given the trouble it is causing? Further, while some ports are prepared, others are not. Can he comment on BBC reports that Felixstowe is already in chaos with unacceptable delays because of pre-Brexit stockpiling and Covid?

Lastly, I ask the Minister about the Economic Operator Identification and Registration System. As the amendments in this SI make clear, this scheme is a nightmare, and the SI appears to admit to another layer of complication. The Government have been frequently asked to devise and negotiate a proportionate version for small exporters. In the Explanatory Memorandum, the Government proudly declare that no specific action is proposed to minimise regulatory burdens on small businesses. Why have they chosen not to do this?

Future of Financial Services

Baroness Kramer Excerpts

Wednesday 11th November 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, I am grateful to the Minister for dealing with the second Treasury Statement in as many days. This Statement is billed as a prelude to the Financial Services Bill, which we will be able to scrutinise following its Commons stages. The process promises to be an interesting one, and I hope the Minister will avail himself of the expertise that exists across your Lordships’ House.

The Chancellor was correct to outline the importance to our economy of the financial services sector. It is a huge employer, generates a significant amount of economic activity and makes a large contribution to the Exchequer. It is vital that we harness the potential of financial services to grow our economy, particularly in terms of green growth.

It is a shame that this Statement has come only now. As it stands, we are weeks away from leaving the transition period without an agreement giving UK firms preferential access to the EU markets that are so important to their day-to-day operations. The Government have unilaterally published equivalence decisions for EU and European Economic Area member states, but the Minister will concede that that gets us only so far.

In his Statement, the Chancellor reiterated the Government’s position that an equivalence determination for UK firms should be simple and swift as we start from a point of regulatory alignment. If that were true, why were the Government not able to secure equivalence determinations by the deadline set out in the political declaration? The Chancellor has sought to blame the EU, but when the Government were asked to complete various questionnaires to aid that process they managed just four out of 28 by the June deadline.

While we may start at a point of alignment, decision-makers in the European Commission will no doubt be studying the Financial Services Bill in detail. Equivalence may not require total alignment, but it seems odd for the Government to amend UK regulations at the same time as demanding that our EU colleagues take a snapshot of them. Does the Minister believe that the contents of the Financial Services Bill are likely to have any bearing on the ongoing discussions? Is it possible that the EU will delay a ruling until that Bill is on the statute book? We will scrutinise the Bill closely, not only in the context of equivalence but to ensure that the reforms do not lead to a deregulatory race to the bottom that puts investors and financial stability at risk.

I turn to the green components of the Statement. The Government would have us believe that their commitment to tackling climate change is second to none, but those of us who share an interest in recent legislation will be sceptical, to say the least. We are told that everything done by Ministers is with a net-zero future in mind, but time after time they oppose sensible climate amendments, most recently on the Agriculture Bill. While the various green finance initiatives announced in recent days represent a degree of progress, the Treasury has not gone as far as many would like. It is certainly not the comprehensive green agenda that is needed to make swift and decisive progress towards the 2050 net-zero target and our wider international obligations. As the shadow Chancellor observed in her response in the Commons,

“Over the last decade, the UK has pumped £6 billion into overseas fossil fuel projects via UK Export Finance”.—[Official Report, Commons, 9/11/20; col. 621.]


There is no indication that this behaviour will be banned, undermining any meaningful action taken in the UK.

The Financial Conduct Authority has signalled a change in approach to firms’ disclosure of climate-related information, which we support. However, mandatory reporting will not be implemented until 2025. Why are the Government not being more ambitious? Green gilts are another case in point. How can we be sure that the money will represent genuinely new investment? Why have the Government waited until 16 other countries have introduced their own schemes, rather than taking the lead on the issue of green financing?

I wish I could be more optimistic, but, sadly, I remember the story of the Green Investment Bank. The institution, proposed in the last Labour Government’s final Budget, should have been key to improving the UK’s environmental record. Instead, just years into its existence, it was sold off by the former Business Secretary Sajid Javid. Earlier this year, a government Minister suggested at a roundtable event that the “Green Investment Bank 2.0” could materialise in the future. Can the Minister confirm whether this is being looked at and, if so, when we can expect news?

[Baroness Kramer (LD) [V]]

My Lords, I declare my interests as listed in the register. I agree with the Chancellor that financial services are fundamental to Britain’s economic strength. However, I recommend that anyone looking to assess their future ignore the hype in the Chancellor’s statement—he seems to have drunk the moonshot Kool-Aid—and look at reality. Our failure to negotiate mutual recognition, or at least equivalence-plus, with the EU is a serious problem. If only the Government had taken as much interest in this area as they do in fishing or, as Catherine McGuinness of the City of London Corporation is quoted as saying in today’s Times, finance risks being

“the neglected child of an acrimonious divorce”.

Over £1 trillion in assets have already transferred from the UK to the EU. Last year, Ministers seemed to think that half the financial services business with EU clients, which is about 15% of total UK financial services, had left or was in the process of leaving, including swathes of insurance and asset management. Is 15% still the number, I ask the Minister? The size of these asset transfers suggests that the actuality is well above those expectations. Job transfers are unclear because of Covid, but we do know that, even in 2019, the recruitment of graduates who do not have EU passports had pretty much collapsed for anything except retail banking.

The EU, which I once thought had a 10-year strategy to remove, slice by slice, most EU and euro-related financial services back to the 27, seems to have accelerated that programme. For example, Mr Dombrovskis has cautioned EU businesses to shift a significant portion of their clearing activity out of the UK in the next 18 months. Without dominance in clearing euro-denominated derivatives, the UK’s global role is seriously at risk. Does the Minister agree?

On fintech, many firms have made it clear that they will have to move EU business if we cannot agree on the rules that govern data. Where are negotiations on this, because at the last look they were pretty dire, with the UK determined to please the United States by watering down data protection?

I am delighted that we are finally going to issue a green sovereign. We may be a leader in green finance now, but every single significant financial centre is committed to the green agenda. I note that the EU is expected to issue €200 billion in green bonds as part of its Covid recovery fund, none of which will be issued through London. But will the Government replace the Green Investment Bank? The noble Lord, Lord Tunnicliffe, mentioned it; it was sold off in part because, along with the British Business Bank, it was associated with Vince Cable, but that was also a deliberate act of environmental vandalism. Will it be replaced?

We are entering a period of regional economic blocs. The United States has actively repatriated a great deal of dollar financial services. China and Asia generally, contrary to the expectations of George Osborne, are using Hong Kong and Singapore rather than London, even with all the disruption in Hong Kong. India is developing Mumbai, so I caution the Government not to misread the potential of dialogue with India. We are now outside all the regional blocs. We have capacity and skills in financial services, but everyone else has the clients and issues the major currencies. You can move capacity and skills, but you cannot move the clients. London will remain a global centre but, I fear, one of gradually less significance. Will the Government give us a reality check on the future of this crucial industry and a proper assessment of the damage that their hard-line Brexit is delivering?

[The Minister of State, Cabinet Office and the Treasury (Lord Agnew of Oulton) (Con)]

I thank the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Kramer, for their thoughtful contributions. I will try to answer the questions as fully as I can.

Unlike the EU, the UK’s equivalence assessment of the EU’s regime was conducted on a proportionate basis, recognising that the UK and EU have the same rulebook. The EU sent us over 1,000 pages of questionnaires—not in a timely manner, with the last 248 pages arriving by 25 May, which is why we were not able to return them within a week, as I think the noble Lord, Lord Tunnicliffe, mentioned. We responded to the questions fully and comprehensively, with over 2,500 pages of response going back at the beginning of July. The EU has not come back with any questions on these responses.

In the absence of clarity from the EU, the Chancellor announced the package of decisions on Monday, which are in the UK’s interest and seek to support UK firms and ongoing cross-border activity with the EU. I assure both the noble Lord and the noble Baroness that we remain open and committed to a continuing dialogue with the EU about their intentions. The Government have taken all reasonable steps to co-operate in good faith with the EU throughout the equivalence process.

The noble Lord asks whether we feel that the EU is holding back, pending the progress of the Financial Services Bill. The measures in the Bill are consistent with a mutual equivalence outcome, and a number of cases actively support it. The UK played an instrumental role in the introduction of a lot of the EU’s regulation, particularly the investment firm regulation and directive, for example, so it is very supportive of the intended outcomes.

The noble Lord asked about TCFD. The UK is the first major country to go beyond comply or explain, or as far as able requirements, and our proposals contain a requisite level of prescription, supervision and enforcement mechanisms to mandate meaningful disclosure. The approach confirms the UK’s position as a global leader on robust climate-related financial disclosures that help investors to make informed decisions. We believe that the timelines set out in the road map provide the right balance between showing ambition and allowing businesses, investors and asset owners enough time to prepare to disclose meaningful information. Initial steps towards introducing TCFD-aligned disclosures have already been taken in respect of certain listed companies, banks and building societies. The FCA consulted in March on comply or explain rules for premium listed companies.

The noble Lord asked about green gilts. The UK’s sovereign green bond will identify specific government green projects that its proceeds will be used to finance, as per the International Capital Market Association green bond principles. These proceeds will then be tracked and reported in a regular and transparent manner to provide clarity to the public and investors.

The UK Government have always remained open to the introduction of new debt-financing instruments but needed to be satisfied that any new instrument would represent good value for money to the taxpayer. We have been regularly reviewing the case for introducing a sovereign green bond, as well as closely monitoring how the green and other ESG bond markets have developed over recent years. The noble Lord asked why we were slow. We have been watching the evolution of this market; indeed, Germany issued its first equivalent only in September this year.

The noble Lord and the noble Baroness asked about a Green Investment Bank mark 2. The Government are committed to ensuring that businesses and infrastructure projects continue to have access to the finance that they need. The UK has a number of existing tools available and we committed, in March last year, to an infrastructure finance review. We still intend to respond to that within the next few weeks.

The noble Baroness asked about asset transfers and the future role of the City. One of the advantages of leaving the EU’s regulation is that it gives us the opportunity to launch a number of initiatives. For example, we will review Solvency II. We will have a call for evidence on the overseas regime, some parts of which have not been reviewed since 1986. We are carrying out a task force on future listings given that there is, for example, quite a big discrepancy between the minimum size of a prospectus in this country and in the US. We are carrying out a consultation on the UK funds review to look at ways of making this country more attractive for international funds.

I remain more optimistic than the noble Baroness that there is a good future. She also asked about fintech and its role. We are a major player in the fintech market. We are developing an ecosystem that supports fintech firms to grow and reach scale. We are fostering partnerships between fintechs and incumbents to enable mainstream adoption of innovation. Being a large economy, we provide the opportunity for high levels of domestic demand; the British public tend to be early adopters of the opportunities that fintech throws up. We have the third-largest number of tech unicorns in the world, with 77 companies valued at over $1 billion. We are absolutely committed to supporting the growth of that market.

Economy Update

Baroness Kramer Excerpts

Tuesday 10th November 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, I am grateful to the Minister for presenting this Statement. It is the latest in a series of announcements and, while there are aspects that we very much welcome, it is a tremendous shame that it has taken so long and required so much frustration and anxiety among businesses and working people. The Labour Party has called for clarity on job support for months. In that time, rather than providing certainty, the Chancellor proceeded with winding down the furlough scheme. That decision was taken despite its apparent success at keeping people employed and warnings of the impact of a perceived cliff edge in support.

Instead of protecting as many jobs as possible, Mr Sunak was honest about the fact that he had decided to focus on so-called viable jobs instead. The replacement scheme was announced with little accompanying detail and, when the information finally emerged, it became apparent that the Job Support Scheme—JSS—would not do, even in the revised form announced mere days before its planned commencement. We now find ourselves with the Coronavirus Job Retention Scheme—the CJRS —extended to March, with a review of the proportions paid by the Treasury and businesses themselves to be carried out in January. This finally provides a degree of certainty to businesses, and we are pleased that they can now plan accordingly. However, not for the first time, the decision came much too late.

This entire process raises several important questions, which I hope the Minister will address. I appreciate that our time is restricted, so I would welcome a letter with any detail he is unable to set out today. What evidence base did the Chancellor draw on when announcing the planned shift from the CJRS to the JSS? Did that modelling predict that jobs may be lost in the short and medium term as a result? If so, how many? How does this match up to the reality reflected in recent figures? Does the Treasury anticipate any of these job losses being reversed and, if so, how many?

I now turn to the continued issues with the Self-employment Income Support Scheme. In last week’s response to an Urgent Question, the Minister cited the number of claims made under the SEISS and assured noble Lords:

“We keep under review the whole issue of trying to protect those who have fallen through the cracks.”—[Official Report, 4/11/20; col. 708.]


I accept the point he made in relation to certain changes to universal credit, which marginally improve the situation for some of those excluded from the SEISS. However, this ignores the key issue, which is that so many people remain beyond the scope of the Government’s core coronavirus economic support and are, instead, forced to rely on an inadequate social security system.

How can Ministers and their officials not have found a solution to this in the past six months? Is the problem that the Minister and the department do not believe there is one, or is there a lack of political will to bring one forward? What would he say to those who, by the end of the current package, will have been outside the scope of government support for a full calendar year?

Finally, I was grateful for the promise of correspondence on self-isolation payments and the technicalities of that system. I have some further points on this. A study by Independent SAGE suggested that only approximately 20% of people in England who experience Covid-19 symptoms go on to follow fully the Government’s self-isolation guidance. Now that we find ourselves subject to a new lockdown, what steps are the Government taking to address this worrying trend, so that there is higher compliance when the current restrictions are eased?

I touched last week on people being ineligible for self-isolation payments if they receive notification via the mobile app rather than an NHS contact tracer. There are many other issues with eligibility, meaning that only one in eight workers is covered by it. In the gig economy, the situation is potentially even worse. Those workers do not enjoy statutory protections and often cannot afford to miss even a day’s work. While some digital platforms have put in place their own measures, this relies on good will and discretion rather than providing guarantees to those in need. What, if anything, do the Government have planned in this area? How soon are we likely to see the details?

[Baroness Kramer (LD) [V]]

My Lords, last week the Minister was not a bit keen on my call for an extension of the 80% furlough scheme to June. Now it looks as though I will get that until at least April, unless there is a poison pill in the January review—though I suspect, quite frankly, that the Government would not dare. I also called on the Government to feed the kids. What a difference a week makes. I am glad they have finally faced up to the realities and have U-turned on quite a range of issues.

They should still do more for the self-employed, whose income support grant ends at the close of December. They cannot be left out in the cold at the turn of the new year. Again, not a thing has been done for the 3 million excluded. The clue is in the name: excluded. There is no point in the Minister quoting programmes that these people cannot access and use. Letting them down is unacceptable.

On the same day the Chancellor made the furlough announcement, the Bank of England announced another £150 billion of QE, which will bring its holding of government debt to over £900 billion. There is a widespread market sentiment that this policy has come to the end of the road. Will the Government comment on that and the implications of negative interest rates, which are now being explored by the Bank? Are we really saying that savings are worth nothing, and that ordinary people need to take increased financial risk in a time of such uncertainty, created by not just Covid but an imminent economic Brexit?

[The Minister of State, Cabinet Office and the Treasury (Lord Agnew of Oulton) (Con)]

I thank both noble Lords for their comments. I will first address the noble Lord, Lord Tunnicliffe.

The Government have always made it clear that economic support would continue past the end of October and had announced the Job Support Scheme to do just that. Extending the CJRS, or furlough, responds to the latest economic conditions and the national lockdown in England and similar restrictions in the devolved Administrations. The Government have acknowledged that they have not been able to support everyone in the exact way they would want, but they have been proactive in addressing gaps in the scheme where possible. This partially addresses the points of the noble Baroness, Lady Kramer; for example, under the second SEISS grant, self-employed traders facing reduced demand or who are temporarily unable to trade due to Covid were made eligible. It has not been practically possible to include certain groups without introducing unacceptable fraud risks.

The vast majority of the British public has come together, followed the law and helped to prevent the spread of the virus. We are confident that communities will rise to the next challenge and play their part as we come together to fight the second wave this winter. The noble Lord asked about compliance. To ensure that people can continue complying, we have introduced a comprehensive package of support, including extended SSP to employees when they are asked to self-isolate, and for workers on low incomes a one-off payment of £500 under the self-isolation support payment scheme.

Individuals who are asked to self-isolate by NHS Test and Trace because they have tested positive for coronavirus, or been identified as a contact, may be eligible for the test and trace support payment provided that they meet the other criteria. If individuals are identified as a contact by the NHS Covid-19 app but they have not been contacted by NHS Test and Trace, they cannot currently apply for the scheme. App users are anonymous, which means that the local authorities that administer the payment scheme cannot confirm that they have been asked to self-isolate. Further work is ongoing to determine if the scheme can be extended to individuals who have been identified as a contact only through the app, while adhering to data privacy requirements.

We have legislated to prevent employers from requiring workers, including agency workers, subject to the duty to self-isolate to attend work. Employers who breach this are subject to a £1,000 fine, rising to £10,000 for repeat offences.

The noble Baroness asked about the potential for negative interest rates. I cannot predict the future, but the noble Baroness will know that we are very against that at the moment. I hope that it can be avoided. I share her concern that negative interest rates put pressure on savers beyond that which has existed over the last 10 years of very low interest rates. It is illustrative of the balancing act that the Government must take between support for people during this crisis and the long-term impact on the Government.

Covid-19 Lockdown: Economic Support

Baroness Kramer Excerpts

Wednesday 4th November 2020 Lords Chamber

[The Minister of State, Cabinet Office and the Treasury (Lord Agnew of Oulton) (Con)]

My Lords, we are very aware of the pressure on self-employed people at the moment, and it is important to remind the House of the level of support that we have given. Up to 19 July, there were 2.7 million claims for SEISS, totalling £7.8 billion. On the second grant, up to 22 October, we had 2.3 million claims of up to £5.9 billion. We keep under review the whole issue of trying to protect those who have fallen through the cracks. As the noble Lord will know, in relation to the universal credit system, yesterday we announced that the removal of the minimum income floor has been put back until April, which will help. In relation to his very specific questions about linking the isolation payments to NHS Test and Trace, I will have to write to him, which I will do as soon as possible.

[Baroness Kramer (LD) [V]]

My Lords, the Minister did not answer the question on the 3 million people excluded, who are largely self-employed and just seemed too complicated to deal with last spring but surely could be provided for now? Will he specifically address that? Businesses are under extreme pressure: they are being asked to cope with constant stopping, starting and change in support schemes. Will the Minister now commit to extend 80% furlough and related schemes until the end of June, when we expect a vaccine, so that any business that will be viable, if it can survive the pandemic, can cope with the short-term constraints and closures?

[Lord Agnew of Oulton (Con)]

As the noble Baroness will know, we have no certainty about when a vaccine will be available in quantity. She mentioned June next year, which is a possibility; it might be sooner or later. That is why we are not able to make long-term commitments. I tried to answer the questions that the noble Lord, Lord Tunnicliffe, asked about support for the self-employed and mentioned various mechanisms. She will know that, if they are businesses that have their own premises, we are providing support at £3,000 a month to go towards fixed costs like rates and running costs.

Covid-19: Economy Update

Baroness Kramer Excerpts

Tuesday 27th October 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, as ever, I am grateful to the Minister for presenting this Statement. When we last discussed the economic update from the Chancellor on 28 September, he was rather unhappy with my characterisation of it as

“another example of Ministers reacting to events, rather than attempting to shape them—of allowing problems to grow, rather than acting quickly and decisively to prevent them in the first place.”—[Official Report, 28/9/20; col. 18.]

The fact that we find ourselves discussing major revisions to the package of measures outlined just a month ago suggests, sadly, a lack of strategic thought in both No. 10 and No. 11 Downing Street. While some of the changes outlined by the noble Lord are to be welcomed, there is too little detail on how others will operate in practice. We know with financial Statements that the devil is in the detail, but on too many fronts we are still waiting for that detail to be finalised.

I have no doubt that the noble Lord will tell us not to worry and that everything is under control. However, in an ideal world, the Treasury would not be redesigning the Job Support Scheme a matter of days before it went live. That it is having to revisit its plans will have done nothing to address the anxiety of businesses and workers, which I referred to during our previous discussion. The revisions to the JSS and the announcement of an increase to the third grant for the self-employed are small steps in the right direction. Additional support for businesses operating in tier 2 and tier 3 areas is also welcome, although the announcement of new funding for such businesses makes it puzzling that some of that support was withheld when requested by the Mayor of Greater Manchester earlier last week.

We hope that changes to the formula for the JSS will encourage businesses to keep on more workers. However, as a range of commentators have noted, the late arrival of the announcement means that many thousands of jobs that may otherwise have been safeguarded have already been lost. As I said last time, each job loss is a personal tragedy. More needs to be done to protect people’s jobs and that requires a concerted government effort. Despite the changes announced last week, many workers still face noticeable reductions to their pay.

Despite taking home less, people will still have bills to pay, including mortgages and rent. The Government previously chose not to extend the statutory protections from eviction in place during the first wave of the pandemic. For homeowners, the ban on repossessions comes to an end on Saturday. Will the Minister confirm whether either policy is being revisited in light of the second wave’s arrival and the very real likelihood of unemployment continuing to rise?

The noble Lord will no doubt have seen the headline in the Resolution Foundation’s latest research on the Government’s Self-employment Income Support Scheme. The organisation echoes what we have said for some time: the programme has been poorly targeted and often missed those who are most in need. Its analysis suggests that a substantial number of beneficiaries have lost either no or minimal income as a result of the pandemic, whereas half a million people have received nothing, despite being left without work. The Treasury has had time to look again at the furlough, so why has it not properly revisited the self-employment equivalent? Will the Minister commit to doing that and, if so, can he provide a timescale? Will he also outline the rationale for the third grant being equivalent to just 40% of pre-crisis profits, rather than the higher levels of previous rounds? Why is the work of the self-employed suddenly less valuable than it was previously?

We appreciate the unprecedented nature of this public health crisis and the scale of interventions required. However, I hope that the Minister recognises that this is an equally challenging time for businesses and working people across the UK. They need meaningful support and early sight of the details so that they can make the right decisions for the future. The Government’s habit of last-minute announcements, often without accompanying detail, is severely undermining public confidence. This has been the case for not only economic measures but public health measures. I hope that the Minister can provide assurances that future announcements will come earlier and with more clarity. People’s jobs and our wider economic recovery depend on it.

[Baroness Kramer (LD)]

My Lords, this feels like déjà vu. Once again, the Government are forced to revise and increase their support for businesses. We need them to give up their bravado and recognise the depth of the economic crisis coming both from Covid and from the harmful economic realities of Brexit, undercutting investment and jobs, even with a deal. Frankly, we desperately need a new OBR forecast, even if without a Budget. While I understand the Government choosing just a one-year spending review, we should be getting open kimono on the long-term issues and choices for discussion in this House and elsewhere. This is not the time for secret spells cooked up in No.10. The situation that we face is far more dire and needs the resources of everybody’s minds and energy.

I want to make two pleas to the Government. First, feed the kids. I know that we have just taken a PNQ on that subject but the money provided to local government under the local authority welfare assistance fund and others was never intended to cope with the present scale of demand, when much of the country is necessarily closed down again, many people are facing redundancy at the end of the month in just a few days’ time, homelessness is rising, and mental health and other demands on local services are increasing exponentially. Many Liberal Democrat, Labour and Conservative councils have stepped in to provide food vouchers to children on free school meals, but that is at the price of financing other needs. Families who qualify for free school meals have by now exhausted any savings, borrowed anything that a respectable lender will let them have and tapped out family and friends. Please will the Government put in place a voucher system to at least carry us over to next Easter?

Secondly, will the Government finally step in to help the 3 million excluded people? They consist primarily of self-employed contractors with personal service companies but also include a range of other people in the self-employed arena. There has, by now, been plenty of time to set up appropriate schemes. The Government argued from the beginning that the issue was complicated, but there has been time to sort it out. As the Resolution Foundation pointed out, and as the noble Lord, Lord Tunnicliffe, described, the SEISS has been badly targeted. The self-employed have suffered an even bigger market shock than employees, and with so many people facing redundancy and needing to look to self-employment for any future income, it is absolutely crucial that proper support is put in place for the self-employed, under whatever arrangements they have established.

[The Minister of State, Cabinet Office and the Treasury (Lord Agnew of Oulton) (Con)]

I thank the noble Lord and the noble Baroness for their comments. I shall try to deal quickly with the issues that they raised.

I completely accept that we are dealing with a fast-moving and difficult situation. The noble Lord, Lord Tunnicliffe, feels that we did not move quickly enough, and he made similar comments the last time we discussed this subject. However, we have moved quickly. We have acknowledged that, given the rolling lockdowns occurring across the country, we need to do more, which is why we are supporting more extensively businesses that have been forced to close as part of the lockdown. We are paying rate relief, which will include a portion of the rent of those businesses that are forced to close. Those that remain open but are affected by a fall-off in trade are receiving a great deal of extra support as well.

It might be worth summarising the extent of extra support announced since I was last here. The government contribution to payment of salaries has increased from 22% to 49%. The employer contribution has fallen from 22% to 4%, and the minimum-hours requirement has fallen from 33% to 20%. The noble Baroness asked about support for the self-employed. It has been a complicated group to support but we have essentially doubled the level of support with the recent announcements, taking the figure up from 20% to 40%. We will continue to monitor the situation.

The noble Lord asked about evictions. There are already provisions with lenders to ensure that they are handling those processes in a sensitive and reasonable manner, but, again, we will of course keep the situation under review.

It is extremely difficult to know how much longer this horror will continue. However, on the point made by the noble Baroness, Lady Kramer, about a more strategic response to the crisis, it is worth reminding her and the House that we have put into the system an unprecedented level of support over the past nine months—some £158 billion of direct fiscal support. That includes £69 billion for employment support, and £51 billion for public service spending, funding for charities and support for vulnerable people.

Economy

Baroness Kramer Excerpts

Monday 28th September 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, I am grateful for the chance to respond to this Statement. The timing, just over a month before the winding up of the furlough scheme—which has caused anxiety for millions across the UK—is regrettable. Other countries have been quicker to provide businesses and workers with certainty, and bolder in the steps they have taken.

The Statement fits the now-familiar pattern of the Government’s handling of coronavirus. It was not scheduled in the usual way and instead announced at short notice, in response to an Urgent Question submitted by the shadow Chancellor, Anneliese Dodds. The Treasury says it replaces the planned Autumn Statement. It is another example of Ministers reacting to events, rather than attempting to shape them—of allowing problems to grow, rather than acting quickly and decisively to prevent them in the first place. We have seen it on test and trace and now on the economy.

We recognise and welcome that the Government seem to have acknowledged what we have been saying for months: that action was needed to avoid a cliff edge for workers. The Statement offers a degree of certainty for some, even if it is not as comprehensive as we would like. The continuation of the scheme for the self-employed, for example, is a positive step, even if its well-known shortcomings remain. A new form of wage support is also welcome. It is not perfect but it is something. However, my overall impression is that the measures offered amount to too little, too late.

In relation to the new job support scheme, it is worth noting that Labour has long called for a change in the Government’s approach. The Chancellor has been asked to reconsider the planned one-size-fits-all withdrawal of job support on no fewer than 40 occasions. The Treasury cannot pretend that there was not time to get this right. While it is of course welcome that some workers will enjoy the protection of the new scheme, the cracks are beginning to show. Labour Party analysis observes that it will be cheaper for many businesses to retain one full-time member of staff than to preserve two jobs on short hours. The impact of that on unemployment could be, and probably is, profound.

As with the current furlough arrangement, there is virtually no conditionality on businesses. No commitment must be made to keep jobs open in the medium-to-long term. Instead the Chancellor is now admitting that jobs will be lost. He says that the new scheme has been designed with that in mind, with his priority to protect those jobs and people whose futures are deemed “viable”. What a callous word to use. Many loyal, talented and hard-working people will lose their jobs as a result of the economic difficulties we are facing. It will be no reflection on their character or ability; in many cases, businesses will agonise over the arbitrary decisions that they are required to make. Many businesses are operating with low capacity, not because they are not viable but because they are compliant with HMG’s public health guidance.

On 12 August, the Chancellor promised that

“no one will be left without hope or opportunity”.

For probably more than a million people, there will be no opportunity. Does the Chancellor believe that these human beings should survive on hope? I have been unemployed three times in my career. My abiding memory is one of terror, not hope. Until one has faced the loss of self-worth after multiple rejections, one cannot understand unemployment.

We accept that it is not possible to save every single job. However, each job loss is a personal tragedy and deserves to be recognised as such. I hope that the Minister takes that on board and ensures that he uses different language. Can he outline why the Government have not offered meaningful support to those who have already lost their jobs? Why is there no mention of help for those who may be about to lose their jobs as a result of recent policy decisions based on the Treasury’s modelling? Just how many jobs are expected to be lost during the lifetime of the scheme? Why is there nothing substantive on skills and training? Labour and the trade unions have consistently called for concrete action to help to reskill people so that they can find good-quality jobs when the economy recovers. Why are the Government content to leave certain people behind?

Why are the Government still not providing tailored support for those sectors most in need of help? Hospitality venues are required to close early, having only recently reopened. Theatres and music venues are still unable to reopen, and we are familiar with the challenges facing sports clubs outside the top tier. Tourism and aviation will also continue to be impacted, probably for quite some time. The Minister will no doubt point to various pots of money that have been found over the past six months. However, consistent with my earlier point, such funds have been established only when sectors have reached breaking point. Early assistance could have made more meaningful differences.

I recognise that the Government cannot single-handedly fix every problem faced by the UK economy. However, the points that I have raised are neither new nor likely to go away. A competent Government would have addressed them long ago. Just how long are we going to have to wait?

[Baroness Kramer (LD)]

My Lords, the Government have not really grasped the double whammy of Covid and our departure from the single market and the customs union, even assuming that there is a free trade deal.

The measures announced last week, including job support modelled on the German Kurzarbeit, are welcome but fall far short. Many jobs in sectors such as the creative industries, sports and hospitality are long-term viable if they can survive the next six months, so can the Minister explain why the Chancellor has not targeted the necessary funds to get them through that six-month period? Three million members of our workforce were excluded from support the first time around, especially a swathe of independent contractors. Why are they excluded again, especially when so many who have become redundant will become independent contractors if they are to live?

The pace of companies being dropped from European supply networks is accelerating. Future FTAs outside the EU only marginally offset the lost business. This is completely aside from the issue of chaos at the borders. Why are these injured firms and workers not getting meaningful help? Are they now considered non-viable? Where are the scaled-up and innovative retraining schemes that are needed to deal with over a million redundancies by year end? Firms of all sizes are accruing levels of debt that will cripple their future growth. Where is the fund to recapitalise overindebted SMEs? Can the Minister explain how Scotland and Wales can meet their constitutional responsibilities to set a budget with no Budget this year from the UK? When will we hear from the OBR and get a good working forecast that deals with the situation as we now understand it? Being £2 trillion in debt may be something which the Government are comfortable with, but most of us would like to know what the principles are going to be on how that will be tackled and how it will eventually be reduced and repaid.

[The Minister of State, Cabinet Office and the Treasury (Lord Agnew of Oulton) (Con)]

My Lords, in replying to the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Kramer, I gently remonstrate with him on us being “reactive”. We have tried to move as quickly as possible at all stages of this crisis but, as we can see from across the world, it is extremely difficult to be ahead of the curve. The announcements made by my right honourable friend the Chancellor last week demonstrate that a lot of hard thinking has gone on over the last two or three months, and the fact that the Statement might have been prompted by a Question shows that the work had been done.

I do not accept that it is too little, too late. The amount of support that we have provided for the economy over the last few months is almost without precedent, with £39 billion on the furlough scheme protecting at one point up to 9.5 million jobs—that figure has now reduced to some 3 million because many millions have come back to work—and £5.6 billion for almost 2.2 million self-employed people under the second grant self-employment income support scheme. I could go on.

The noble Lord asked about the intention of the job support scheme to keep part-time workers rather than to just go for a single full-time worker. The idea is to keep as many people in work as possible with their skills so that, when the economy recovers, the skills have not been lost. While on a hard, simple basis, it might be more viable to keep one person, in the longer term any employer would try to keep part-time people. I suggest that the noble Lord takes on board the job incentive scheme: £1,000 for those coming back into work between now and January.

The noble Lord asked about good-quality training. Earlier in the year we announced the kick-start scheme, a £2 billion scheme for young people which subsidised employment, as it was a concern that 800,000 young people left school and education over the summer.

The noble Baroness, Lady Kramer, asked about the hospitality sector. We have extended the reduction in VAT for that sector. We also have in place the grants and rates support, again a very considerable sum of money. She asked about us formally leaving the European Union and customs. She will not like it, but that is a major employment opportunity for that sector. We have only 5,800 customs intermediaries. They all need to increase employment. We have provided grants for them to upscale. Another example of new training needed is police officers. Sectors of the economy will grow, and the Chancellor’s comments are to encourage people to move across to those over the next few years.

On the devolved authorities, we have made considerable grants to them under the Barnett formula. While the Budget has been postponed, we are working at pace on the comprehensive spending review which, I would suggest, is a more important long-term method of looking at how we are going to rewrite the economy after the crisis that we have faced over the past six months.

The noble Baroness also asked about the debt. The debt is very worrying. No one is going to pretend that it is not. It was last at 100% of GDP in the year I was born—1961—and, therefore, we are going to have to be very careful over the next few years about how we address that. We were fortunate that, having got the economy and the financial position into a relatively stable state over the past few years, we had the headroom to do what we have been able to do, which has all been about trying to reduce the impact on citizens over the past seven months.

EU Exit: End of Transition Period

Baroness Kramer Excerpts

Thursday 24th September 2020 Lords Chamber

[Lord True (Con)]

My Lords, there are a number of questions wrapped up there, and I did not answer the noble Lord, Lord Kerr, on one question. The Government are not blaming anybody. We are certainly not blaming the haulage industry or any other industry. We are pleading for everybody to work together to achieve the best outcome. I have said to the House that the specific freight IT which we have been talking about will be being tested next month and be operational by April. We have already published an iteration of the border operating model. There will be a new iteration of that published very shortly.

[Baroness Kramer (LD) [V]]

My Lords, small manufacturing exporters have been put in an impossible position, with no clarity on an FTA, high costs to adapt to borders and blows from Covid-19, and they have no capacity to prepare for multiple outcomes. Will the Government at the very least provide a beefed-up advice service, and will they use these last days of negotiation to focus on a simplified export regime for the little guys—something that does not seem to have been on the table at all—less onerous rules of origin, no duplication of conformity assessments and a pared-back AEO scheme? Frankly, without immediate action, many small guys will lose the willingness to engage properly in the Christmas trading season. That would be very bad news and mean that many go out of business.

Restriction of Public Sector Exit Payments Regulations 2020

Baroness Kramer Excerpts

Wednesday 23rd September 2020 Lords Chamber

[Baroness Kramer (LD) [V]]

My Lords, the more time I spend looking at these regulations, the more concerned I have become. I start from a principle, as I suspect everyone in this House does, that employees in the public sector need to be treated fairly. We have all seen how incredibly effective and dedicated members of the public sector have been in dealing with the challenges of Covid.

These regulations were designed initially to deal with excessive payments to high-earning senior civil servants. I have not heard a single Member of the House object to that aspect of the regulations. However, again and again, one noble Lord after another has made it clear that the framing of the regulations is such that it impacts on public servants on modest incomes, whether through the issues raised by the noble Baroness, Lady Finlay, affecting junior doctors, or in the damage faced by mid-level local government workers who are made redundant, a point raised by nearly every speaker.

The biggest issue under these regulations is pension strain. Access to unreduced pensions for a worker made redundant after the age of 55 in local government is part of an agreement for local government workers enshrined in the Public Service Pensions Act 2013. We must keep in mind that salaries have been crafted with this benefit in mind. The relevant section requires the local government employer to contribute to the pension fund to offset the lost years of contribution created by a forced redundancy. That payment to the pension fund can easily exceed £95,000, even for a modestly paid worker. This is someone who gets only £14,000 or £20,000 as their redundancy payment. Now they are caught by the new cap, leaving them on a significantly reduced pension for the rest of their lives.

We understand that the Ministry of Housing, Communities and Local Government has begun a consultation on the consequences of the exit payment cap. It does not close until 9 November 2020 and regulations will take time to follow. It is beyond me, and I suspect most Members of this House, that the package has not been considered as a whole. These regulations should not be enacted without confirmation of what any mitigation might be.

I am worried by comments in the report from the Secondary Legislation Scrutiny Committee that HMT’s answer is to suggest that the redundant worker make up the contributions gap. Does it really think that a 55 year-old local government employee on a mid-level salary has a savings pot in the many thousands, especially as he or she faces redundancy? Does it then expect them to get high-paid work to enable them to contribute to make up the money that has not been paid by a local government authority?

In the original legislation, the local authority could waive the rule if approved by full council. That seems to me reasonable. Indeed, it is what the then Minister, the noble Baroness, Lady Neville-Rolfe, assured the House on 30 November 2015. Now the regulation gives that power solely to a Minister—in other words, the Secretary of State. The full council is overridden, and I join the noble Lord, Lord Wigley, in saying that this is entirely inappropriate. Taking back control is really starting to have an unpleasant new meaning.

To make matters more murky, the Government have not published their updated equality impact assessment, and women are expected to be among the hardest hit by this new regulation. None of us believes in rewarding failure, although we notice, interestingly, that the regulation makes an exemption for the banks owned by the Government. Apparently, those institutions are not to be bound by that same notion that failure should not be rewarded.

I am concerned that this regulation expresses a general hostility to civil servants, and we have seen that in other areas of government behaviour. The regulation makes exemptions for the Armed Services and for spies. I do not resent their luck in finding that they have exemptions, but that does not make it fair for others. I understand that whistleblowers and victims of discrimination are also exempt. Again, that is entirely appropriate, but, frankly, whistleblowers and victims of discrimination should not be made redundant in the first place.

This is a really badly crafted regulation. Its enactment needs to be halted so that a new version can be put in place once the whole picture is sorted and the various mitigations have been understood.

Equivalence Determinations for Financial Services (Amendment etc.) (EU Exit) Regulations 2020

Baroness Kramer Excerpts

Wednesday 2nd September 2020 Grand Committee

[Baroness Kramer (LD) [V]]

My Lords, this statutory instrument is clearly necessary to enable an equivalence regime for financial services to be in place following the transition period.

We all know that financial services are critical to this country’s GDP and tax base. Historically, the sector has provided more than 2 million jobs in the UK and more than £76 billion a year in tax revenue but, in the past, one-third of the sector has relied on EU clients, nearly half of whose business has been lost due to Brexit. I note with concern that, reflecting this shift, London, according to the think tank Z/Yen, which manages the index, has lost its position as the global number one financial centre to New York.

Even more concerning, both New York and London have been losing position, although London is losing it faster than New York. The rising locations are in Asia and the EU 27. One expert described these centres, especially the EU ones, as small black holes, growing rapidly as they sweep in new and transferred operations. We cannot afford to lose any more business. Equivalence matters. My party therefore supports the passage of this SI. We note that, like all the SIs dealing with equivalence, this one represents unilateral action by the UK, without which EEA firms could not continue to access the London markets. However, to deny that access would be extreme self-harm as we would be the losers. Essentially, this SI attempts to retain some parts of the status quo.

However, I want to confirm that the arrangements in Schedule 3, which relate to benchmarks, allow Libor to be replaced by risk-free reference rates set by the eurozone and non-eurozone EEA countries. The UK equivalent will be SONIA, the sterling overnight index average. Your Lordships will know that Libor has been a disgraced benchmark since American journalists exposed that it had been corrupted and manipulated for decades under the noses of the UK Government and regulators, who were blinded by their philosophy of light-touch regulation.

I also want to use this opportunity to ask the Minister to give the Committee an update on the status of the equivalence negotiations with the EU. Can the Government confirm that they are no longer seeking mutual recognition? Quite a number of members of the Tory party—we heard some of this again today—and the regulators have indicated that they expect and want divergence to be a significant feature of future financial services regulation. Is that correct? What will be the underpinning philosophy of divergence, since I assume that light-touch regulation remains disgraced? Are the Government making any progress on finding a mutually agreed mechanism with the EU to resolve any dispute on divergence and equivalence? Is there any progress on getting a notice period for cancellation longer than the current norm of 30 days? Without a notice period of at least two years for equivalence cancellation, firms that use London will be living with disturbing uncertainty.

How are other issues that could lead to the cancellation of equivalence to be resolved? Perhaps the most obvious issue is that of financial stability related to the supervision in the UK of central counterparties clearing trillions of euros in derivatives. Actions to protect the UK economy in a crisis could cause havoc for the euro and the EU without some mechanism for co-operation and mutual support.

The expectation of the financial services industry is not that London will collapse as a global financial centre the day after the end of the transition period but that it will be in the EU’s interest to pull business into the 27 salami slice by salami slice as capacity expands, which is at least a 10-year strategy. New York has been reasserting its dominance in dollar-based financial business. China and India, as rising economic stars, have made it clear that they have no intention of ceding control of their key financial markets to any foreign country. The UK remains a major global player only so long as it dominates European financial services. How this Government deal with equivalence will essentially determine the future of this key sector of our economy.

Finance Bill

Baroness Kramer Excerpts

2nd reading & Committee negatived & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Friday 17th July 2020 Lords Chamber

[Baroness Kramer (LD) [V]]

My Lords, we must brace ourselves for high levels of unemployment in the autumn and the failure of a significant number of businesses, especially in vulnerable sectors. SMEs are likely to be among the hardest hit. Many noble Lords who spoke today identified the plight of hospitality, retail, the arts, transport, the charity sector and leisure. The call for the Government has been powerful: target support and do not remove it too soon.

I am now picking up anecdotally that Brexit is resulting in a wave of damage. British SMEs are being cut out of supply chains that have been a major part of their business for years. Larger companies in the UK, which anticipated shifting operations to the EU 27 over several years because of Brexit, are now accelerating those decisions. Supply networks are just not willing to put up with the costs and complications of regulatory divergence and border constraints, which now seem inevitable under every government scenario. My noble friends Lord Razzall and Lady Northover and the noble Baroness, Lady Wheatcroft, emphasised the risk.

Add to that the breakdown of the US-China relationship—to which the noble Lord, Lord Blunkett, drew attention—and the growing momentum for the world to divide into regional economic blocs, and we see a dangerous economic storm. I am concerned that this Government have found themselves the flotsam and jetsam between regional economic powers. They have clearly decided to hitch their wagon to the US bloc, in the hope of a trade agreement that, at best, offers very modest gains to the UK.

Like others, I support the Chancellor’s swift action to mitigate the immediate impact of Covid on the economy, with a huge injection of cash. The triage has been vital. But other countries, our rival economies, have been designing their rescue plans to fit a long-term strategy of building an economy for the future—a green economy, a digital economy and an economy framed by the fourth industrial revolution. Germany, as I have remarked before, has earmarked €8 billion just for hydrogen. France has committed €7 billion just for electric vehicles. At the very least, the Government could commit to a strategy of major investment in a green recovery. My noble friend Lord Oates underscored the need for urgency and the scale of the investment and commitment required.

I want to highlight three issues with the Chancellor’s schemes that I find outrageous. The first is the exclusion of 3 million businesses from any help, mostly self-employed contractors and freelancers who work through entirely legal personal service companies. My noble friend Lady Burt discussed this in detail. I do not buy the Government’s explanation that it cannot help this sector for fear of fraud; it stems from the Treasury’s institutional hostility to these kinds of contractors. We saw it with the loan charge, and I am grateful to my noble friend Lord Goddard for expanding on this. We still urgently need a rational basis for settlement under the loan charge of open years—something that will avoid destitution and bankruptcy. We have also seen that same attitude with the new off-payroll working rules, as described by my noble friend Lady Bowles. I know we will discuss those and the Economic Affairs Committee’s report on them another day.

As the IFS reminded us this week, many of those who become unemployed because of Covid will turn to setting up their own businesses. As explained by my noble friend Lord Bruce, the solo self-employed are critical to economic recovery. If the Government do not change their attitude and provide meaningful help, there will be a long tail of unnecessary damage from Covid, and it will hit the poor, especially those with children, gig workers, women and young people the hardest.

The second issue is the failure to open the Bank of England term funding scheme to fintechs and alternate lenders. The Government announced their £330 billion in schemes, including CBILS, CLBILS and bounce-back. Only £46 billion has gone out the door. Did they really intend only 14% of their schemes to be used?

The clearing banks have been given incredibly cheap money from the Bank of England to fund these loans and have behaved in their usual way, cherry picking existing customers and the most desirable customers, and leaving out the rest. They argue that they cannot expand their balance sheets too much, but they have refused to funnel the cheap Bank of England funding money to alternate lenders, even though this would not be put on to their balance sheets, and are blatantly using public money to undermine their competition. It has left the alternate lenders accredited by the British Business Bank unable to find the cheap money that would enable them to lend under these schemes and is threatening the diversity of providers that we need for economic recovery.

I go further. The Government need to take an active step to support finance for SMEs. This includes facilitating equity investment—it is incomprehensible that EIS has not been included in the future funding scheme—and a review of forbearance, and requires permission for new mechanisms such as shared platforms to improve access to financing.

The third travesty in this Finance Bill is the restoration of Crown preference, putting HMRC ahead of the queue and collecting money from bankrupt companies. At a time of national emergency, a measure that will hit small creditors and suppliers badly—as we heard from my noble friends Lady Burt and Lady Bowles and the noble Lord, Lord Bourne—is completely unacceptable.

We are also debating the stamp duty land tax Bill. My concerns have been that these measures help those buying second homes with buy-to-let instead of being more targeted. The move does little to stimulate the building of affordable housing, as my noble friends Lord Shipley and Lady Bakewell described. My noble friend Lord Bruce, the noble Lords, Lord Wood, Lord Truscott and Lord Loomba, and the noble Baronesses, Lady Falkner and Lady Wheatcroft, underscored the concern. The stamp duty change does nothing for renters. I have received the same letter as the noble Baronesses, Lady Andrews and Lady Bennett, from a renter who has been told their lease will not be renewed because the landlord wants to sell to take advantage of the stamp duty reductions. I suspect that letter is the tip of the iceberg.

Finally, I say how disappointed I am that we still do not know how the Government plan to borrow, tax or cut its way to covering the £188 billion in crisis spending. We know that in March sterling went into free fall and the capital markets turned against the UK Government’s debt until the Chancellor intervened with his rescue package and the Bank of England announced another £200 billion in QE. We should all take note of the warnings by the noble Baroness, Lady Altmann, on QE’s down sides. I accept that right now we have to splash the cash, but we also need a long-term economic plan.