Defence Funding

Debate between Baroness Kramer and Baroness Vere of Norbiton

Thursday 16th May 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I am grateful to the noble and gallant Lord for his intervention, but the Government have committed to increase NATO-qualifying defence spending to 2.5% of GDP. That will make us the biggest defence power in Europe, and second only to the US in NATO. If all other NATO members were to increase their spending to the same levels, that would mean an additional £140 billion to be spent by allied nations.

[Baroness Kramer (LD)]

My Lords, the UK’s green gilts have been justified as necessary to promote London as a global centre for green finance, and they have been successful, but defence bonds would bring no such advantage and surely should be funded from core taxation. What would be the impact of defence gilts on general gilts issuances, on the national debt, on our annual interest payments and on funds for other public services?

[Baroness Vere of Norbiton (Con)]

Of course, I do not have the answer to those questions because the Government are not intending to issue defence bonds. However, the noble Baroness mentioned one of the rationales for issuing green gilts—ensuring that the City of London is a global financial centre—and she is absolutely right. Indeed, we are the No. 1 financial centre for green finance.

HMRC Self-assessment Helpline

Debate between Baroness Kramer and Baroness Vere of Norbiton

Tuesday 26th March 2024 Lords Chamber

[The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)]

My Lords, I do not have the details of who was told at what stage, but even though HMRC is a non-ministerial department and has a close relationship with the Ministers with oversight of HMRC, operational decisions are taken by HMRC’s management. The decision on the helpline followed two trials last year, the evaluations for which were published, showing that closing access to those helplines for certain people had no adverse effects at all. A commitment has been made that the helplines will remain open over the year ahead, but we are focused on listening to feedback and ensuring that as many people as possible can make the transition to online services, which have a far higher customer satisfaction rate than the phone lines.

[Baroness Kramer (LD)]

My Lords, it is not just this particular shambles: HMRC’s own surveys, which you can read in its annual reports, show that customer service has pretty much collapsed within that departmental agency. Its leadership has failed to recognise that the huge shift to self-employment, contract work and gig work has pushed swathes of ordinary people into a tax minefield. I ask that the Government provide HMRC with more resources to deal with this issue, but will they also tackle the culture at HMRC, which, at the top, remains focused on compliance through aggressive enforcement rather than through proper customer service and support? Most people want to pay the right tax; they just do not know what it is or how to do it.

[Baroness Vere of Norbiton (Con)]

I do not fully recognise the picture that the noble Baroness paints. Over the course of this Parliament, the amount of funding provided to HMRC has increased from £4.3 billion in 2019-20 to £5.2 billion in 2024-25, and the overall customer satisfaction across phone, web chat and online is 79.2% versus a target of 80%. However, I recognise that there are certain elements within the HMRC offer where taxpayers need to get a better service. That includes answering correspondence for some of the more complex and hard-to-reach people: the vulnerable and the digitally excluded. That is exactly why, quite frankly, we need to move resources from taxpayers who can and should use online and ensure that those resources can be targeted at those areas where customer service is not as good as it should be. That is what we intend to do.

Electronic Payment Devices

Debate between Baroness Kramer and Baroness Vere of Norbiton

Tuesday 19th March 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

My noble friend raises a wide suite of issues. Underpinning all the work the financial services industry is doing is the Financial Conduct Authority, which is responsible for regulating the sector. Principle 6 of its principles for business says that the sector must take particular care in the treatment of vulnerable customers. The FCA is reviewing the needs of vulnerable customers and may update its guidance shortly.

[Baroness Kramer (LD)]

My Lords, the Minister and other noble Lords have mentioned the FCA, and I would like to continue that conversation. When we left the EU, the credit card companies seized the opportunity of the loss of regulation to increase credit card interchange fees in the UK fivefold—a Brexit dividend for the card companies of some £200 million a year, the cost of which effectively falls on the consumer. Why have neither the Government nor the FCA as regulator acted to reverse what could be called the Brexit penalty?

[Baroness Vere of Norbiton (Con)]

I am grateful to the noble Baroness for her question. Unfortunately, it goes slightly beyond my briefing today, but I will write.

Alternative Investment Fund Designation Bill [HL]

Debate between Baroness Kramer and Baroness Vere of Norbiton

2nd reading
Friday 1st March 2024 Lords Chamber

[The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)]

My Lords, I, too, congratulate my noble friend Lady Altmann both on securing this important Second Reading debate on her Bill and on her excellent contribution setting out the challenges that she hopes to fix. I am grateful to her for her engagement on this issue; I hope that it will continue as we continue our work in this area. I am also extremely grateful for all the contributions made in your Lordships’ House today. I note that there was violent agreement that something must be done; I hope to set out the Government’s plans to do this, but I will ensure that my colleague, the Economic Secretary to the Treasury, has a look at Hansard because it is important that he understands the breadth of feeling and some of the important issues that were raised.

As noble Lords have heard, this Bill would amend the Alternative Investment Fund Managers Regulations to remove listed investment companies, also known as investment trusts, from scope. It would also make amendments to other assimilated law, formerly retained EU law, in order to make changes to cost disclosure requirements for listed investment companies.

The Government share my noble friend Lady Altmann’s drive to champion the investment company sector and ensure that the UK’s capital markets continue both to thrive and to drive forward our economy. It is true that, over the past two years, there have been relatively few initial public offerings globally; the UK has not been immune to those trends. This market turbulence has also impacted the investment company sector, in which the UK is undoubtedly a world leader. However, London continues to be Europe’s leading hub for investment; it raised more capital in 2023 than Frankfurt and Amsterdam combined.

The Government are committed to building on the UK’s strong foundations in this area by taking forward, through the smarter regulatory framework, ambitious reforms to streamline the regulatory rulebook, boost investment into UK markets and improve the competitiveness of the UK as a listing destination.

Investment companies are a wonderful British—more specifically, Scottish, according to the noble Lord, Lord Macpherson; he is right—invention dating back more than 150 years. The way in which they have become such a backbone of our investment economy is quite incredible. I assure all noble Lords that the Government are committed to supporting this very important sector.

However, I must express some reservations about my noble friend Lady Altmann’s Bill, although we recognise the rationale behind its being brought forward. I will first address the amendments that would exclude listed investment companies from the Alternative Investment Fund Managers Regulations, or AIFMR. Amending the scope of these regulations could have a significant impact. It would not be appropriate for the Government to change the regulatory perimeter using this Private Member’s Bill in isolation, without proper and appropriate consultation and further consideration.

As part of building a smarter regulatory framework for financial services, the Government are already carefully considering how to make AIFMR more streamlined and more tailored to UK markets. The Government recognise the concerns about regulatory inefficiencies for listed investment companies under AIFMR. However, we are also conscious that some investment companies value being regulated financial services providers; at this point, I note the warnings put forward by my noble friend Lord Hannan.

Given the spectrum of views on this issue, it is vital that the Government provide an opportunity for all impacted stakeholders to comment. It is for this reason—this is the first time that it will be publicly known, I think—that the Government will consult in the next quarter on how the UK should approach AIFMR. This will, I believe, fulfil my noble friend Lady McIntosh’s requirement for some consultation. Obviously, we want to do this as speedily as possible, but we need to get information from the industry, the investment companies sector and beyond about how to take it forward. Once we have that, we should be able to move fairly rapidly.

We know that only through careful consultation and consideration can we provide listed investment companies with the longer-term certainty of an appropriate regulatory framework. I agree with the noble Lord, Lord Macpherson: sometimes, it is really important to get these things right. Although some people often criticise the Treasury for taking too long and being—dare I say this as a Treasury Minister? I am not sure—a bit staid and sober, we have to get things right.

[Baroness Kramer (LD)]

I have a question for the Minister. With much of this gold-plating, I am not sure that the regulator consulted on implementing it. Why would it then have to consult on removing it?

[Baroness Vere of Norbiton (Con)]

I will come on to gold-plating. I am not entirely sure that everybody is in alignment on whether or not this regulation is implemented, but consultation is just good government. I do not see us making substantial changes to the regulatory scope on the basis of having not done it before we are not going to do it now. We need to get it right, but we absolutely support the investment company sector and want to get on with this. That is why I am so grateful to my noble friend Lady Altmann for bringing this forward, allowing us to have a conversation in the Treasury and beyond.

I turn to the second element: cost disclosures. My noble friend Lady Altmann has rightly identified that EU-derived legislation is not currently fit for purpose, as many other noble Lords, the Government and the Financial Conduct Authority would agree. The packaged retail and insurance-based investment products regulations, commonly and more easily known as PRIIPs, were originally meant to provide more transparent and standardised disclosure for retail investors across the European Union. Noble Lords are well aware that there are many problems with the EU PRIIPs regulation. It is prescriptive, misleading to retail investors and prioritises comparability over a wide range of financial products at the expense of consumer understanding.

That is why, as part of the Edinburgh reforms, the Chancellor announced that, as a priority, the Government would reform PRIIPs. We have already made significant progress on delivering this commitment. Most recently, at the Autumn Statement last year, the Government published a draft statutory instrument to replace PRIIPs with a new framework tailored to UK markets.

We understand industry’s concerns regarding broader legislation that prescribes firms to calculate their costs as they are required to do so now, and so the Government and the regulator have not stopped there. At the same Autumn Statement, the Government announced that they would bring forward the repeal of relevant cost disclosure provisions in the markets in financial instruments directive, or MiFID, alongside the replacement of PRIIPs.

Many noble Lords have mentioned that the FCA has published the forbearance statement, and some feel that it has not gone far enough. I will ensure that the FCA is made aware of the debates that noble Lords have had today. There has been significant criticism, which it will no doubt be interested in, and some suggestions of how it might be able to go forward.

I hope that this brief summary has provided sufficient reassurance to my noble friend Lady Altmann, and to all noble Lords, that the Government are treating this as a priority. We have a comprehensive plan to alleviate the harms faced by the investment company sector, but are committed to making sure that we get it right for the long term, to ensure that 150 years already gone by becomes another 150 years in the future.

I have mentioned consultation, so I will move on from that to cover some points raised in the debate on timelines. I accept that, for many noble Lords, and indeed Ministers, it is never fast enough. This was mentioned by my noble friend Lord Hannan and the noble Lord, Lord Macpherson. We are delivering a very ambitious programme to build the smarter regulatory framework for financial services. At Mansion House, the Government removed almost 100 pieces of unnecessary EU legislation from the statute book, and now we are looking at wider reforms—those mentioned in the debate today and others, including Solvency II—that will deliver the biggest potential benefits.

I note that my noble friend Lord Hannan would have liked us to go through things in a different way. The Treasury is very much focused on looking at where we can have the biggest and quickest potential benefits to economic growth. We are conducting a phased approach to bringing in this change of regulation because we must also ensure that the system and different financial sectors can cope with this change in legislation.

I note the invitation from the noble Lord, Lord Macpherson, to make commitments from the Dispatch Box on certain matters. I am not able to do so just yet—maybe soon.

There is debate around gold-plating. I hope that that will all be laid to rest as we are able to reform this and ensure that we have the right framework going forward.

My noble friend Lady Altmann mentioned investment companies being removed from platforms. We note and recognise the frustration that some investment companies feel at having been removed from investment platforms. I reassure her that, although this is a commercial decision, the Government and the FCA are well aware of this issue and are carefully considering what options are available. Ditto in the use of the EMT, the MiFID template. This is a voluntary template, but we understand that it may not be providing the best information to retail investors at the current time.

Many noble Lords have noted the competitiveness of the UK capital markets. That is what underpins the smarter regulatory framework. Despite recent challenges, the UK has many vibrant and dynamic capital markets, and they remain some of the deepest and strongest globally. However, we cannot rest on any laurels; we have to keep moving forward in this area. That is why the Government are delivering on my noble friend Lord Hill’s listings review, the wholesale markets review, and the Chancellor’s Edinburgh and Mansion House reforms.

The noble Lord, Lord Davies, mentioned the FCA’s activities and scrutiny of the regulator’s role. My noble friend Lord Reay mentioned the FCA’s D&I work, as did the noble Baroness, Lady Kramer. Parliament does have scrutiny over the FCA and many other regulators. Assimilated law is being replaced, in line with the UK’s domestic model of regulation. This means that the UK’s independent financial services regulators will generally set the detailed provisions in their rulebooks, instead of firms being required to follow EU law. This approach was following two consultations and it received broad support across the sector. Parliament debated this approach during the passage of the Financial Services and Markets Act 2023, and it secured parliamentary support then.

The Government recognise the importance of effective parliamentary scrutiny of the regulators, including their approach to rule-making and other activities that they may choose to undertake. That is why FiSMA 2023 introduced additional mechanisms to strengthen Parliament’s existing ability to scrutinise the regulators’ work, including requirements for the regulators to notify parliamentary committees, such as the new Financial Services Regulation Committee, of their consultations and to explain, when publishing final rules, how representations by parliamentary committees have been considered. I warmly welcome the formation of that committee. It will be hugely helpful, and it is quite right and proper that independent regulators are held to account by Parliament.

I will write with a few further comments on the investment in the UK capital markets by UK pension funds and on a few other issues which have arisen and need a fuller response. For the time being, I am very grateful to my noble friend Lady Altmann and many other noble Lords for their continued championing of the investment company sector.

Overseas Territories: Tax Haven Status

Debate between Baroness Kramer and Baroness Vere of Norbiton

Monday 26th February 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

As the noble Baroness will know, there is an enormous amount of work going on at the moment around international tax. That has been led by the OECD and the inclusive framework, involving 130 countries and jurisdictions from around the world working on two pillars: one for the greater share of group profits to be taxed in market countries, and the second a global minimum tax, where all profits will be subject to a 15% minimum effective tax.

[Baroness Kramer (LD)]

My Lords, from these Benches I join in with the shock and sense of loss at the death of Lord Cormack. He was such a big figure in this House and I know it is a very personal feeling for many of us sitting here, as well as for those across all Benches.

On 8 February—this month—a jury in Florida found the former Premier of the British Virgin Islands guilty of drug trafficking and money laundering while in office. Do the Government understand that that kind of corruption would have been much more difficult had there been in place the long-promised public register of beneficial ownership? The Government had guaranteed to this House that it would be in place for all overseas territories by the end of last year. Where are we in this process, and do the Government recognise their crucial role in stemming corruption?

[Baroness Vere of Norbiton (Con)]

The Government absolutely recognise their crucial role in stemming corruption; we work very closely with the overseas territories on all sorts of issues when it comes to illicit finance. I refer the noble Baroness to the Written Ministerial Statement from my honourable friend in the other place, the Minister for the Americas, Caribbean and the Overseas Territories; in that is a helpful summary that sets out where each of the overseas territories is in relation to introducing a public, accessible register of beneficial ownership.

UK Economy

Debate between Baroness Kramer and Baroness Vere of Norbiton

Wednesday 21st February 2024 Lords Chamber

[The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)]

I absolutely believe that our plan is working. It is critical that we continue along the path that we have set out. One of the biggest challenges we have faced in this country over recent months is high inflation. That is the biggest barrier to growth and that is why halving it is still our top priority. Thanks to decisive action, supported by the Government, inflation has fallen. If one looks at what happens when inflation falls, one sees that interest rates can also fall, which will also mean that growth will begin to rise. The noble Lord mentioned growth. It is the case that the Government have very clear policies for growth. Noble Lords will discuss them with me shortly, as we debate the Finance Bill.

[Baroness Kramer (LD)]

My Lords, the Resolution Foundation has reported that GDP per capita is now 4.2% below its path before the cost of living crisis. That is the equivalent of a loss of nearly £1,500 per household. The OBR has said that we are set to see the biggest fall in living standards since 1950. Do the Government understand that, for ordinary people, their plan is delivering real day-to-day pain and often deprivation? Nothing she has said or proposes to do changes that, as she will see if she looks at the forecasts.

[Baroness Vere of Norbiton (Con)]

What is absolutely clear is that the forecasts show that the UK is forecast to grow, and very strongly. The IMF has forecast that we are to grow faster than Japan, Germany, France and Italy over the next five years. I absolutely accept that the economy has seen some very significant challenges over recent years, with global instability in Ukraine and in the Middle East, and the legacy of Covid. I was a Minister throughout that period, and at no time did I ever hear any ideas from the party opposite or the Liberal Democrats that would have put the economy in a better situation than it is in now. They called always for more spending, for longer periods. We must fix the issues that appeared, mostly due to external factors, which is exactly what we are doing. The economy is turning a corner—indeed, it has turned a corner, thanks to our decisive action.

Buy Now, Pay Later: Regulation

Debate between Baroness Kramer and Baroness Vere of Norbiton

Wednesday 7th February 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I agree with my noble friend that this is at the heart of it. Any credit facility, be it interest-free or not, has to be understood by those who use it. To that end, the national curriculum has included financial education since 2024. In primary schools, children learn about the uses of money. In secondary school, they go on to learn about budgeting and managing risk, which is of course incredibly important in the credit markets. They learn about financial products and services and raising and spending public money. We have put those elements in place.

[Baroness Kramer (LD)]

My Lords, a number of the firms that provide buy now, pay later—which are of course unregulated schemes currently—are seeking authorisation from the FCA also to offer regulated credit schemes. As we saw with the mini-bond scandal, this mixing of regulated and unregulated lulled ordinary people into misunderstanding the absence of supervision for unregulated products and led them into serious financial distress. Will the Minister advise the FCA not to authorise any schemes for buy now, pay later firms until buy now, pay later is itself properly regulated?

[Baroness Vere of Norbiton (Con)]

While it is fair to say that buy now, pay later itself is not regulated, many elements of getting out to consumers are regulated. The broader consumer protection legislation which exists provides such protections. For example, the FCA has rules and guidance on advertising and financial promotion. Only today, the FCA financial promotions gateway is in force. Buy now, pay later firms must also go through that gateway with all their marketing materials to ensure that they are not misleading, and that is to the benefit of consumers.

Pension Investments

Debate between Baroness Kramer and Baroness Vere of Norbiton

Tuesday 23rd January 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I should be delighted to meet with my noble friend to discuss these matters further. The UK has a world-leading investment trust sector representing over £250 billion of assets and is highly aligned with the Government’s priority to promote long-term productive investment. She will know that at the Autumn Statement, the Government published draft legislation to replace the packaged retail and insurance-based investment products, or PRIIPs, regulations. We also announced that we will bring forward the repeal of the relevant provisions of the Markets in Financial Instruments Directive. This will enable the FCA to put in place more proportionate cost disclosures.

[Baroness Kramer (LD)]

My Lords, I am keen to see increased domestic investment in the UK economy, but is it appropriate to put pension money from small pots—people who cannot afford to lose part of that pot —into liquid, high-risk start-up investments, as the Mansion House compact seems to contemplate?

HMRC: Tax Returns

Debate between Baroness Kramer and Baroness Vere of Norbiton

Wednesday 10th January 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

HMRC is an office-based organisation. However, officials can work from home for two days a week, if they can be fully effective in their roles. On average, advisers answer the same number of calls per day and work the same number of hours, whether they are in the office or at home.

[Baroness Kramer (LD)]

My Lords, I wonder whether the Minister is aware that so many people have become so intimidated and discouraged by the process of trying to claim a tax repayment that an industry has grown up. Tax repayment agents and companies are now stepping in as middlemen to provide that service to people, but there is no professional standard or certification, and there is no regulation of any of these bodies—so the potential for people to be abused and scammed is very great. Are the Government going to take action to deal with this, either by improving the service so that these people are not needed or else by regulating them if they are?

[Baroness Vere of Norbiton (Con)]

The noble Baroness may be aware that the HMRC made a very targeted intervention on overpayments over the summer, to enable a backlog that had arisen to be repaid. That is now cleared, and the self-assessment helpline prioritises queries relating to returns, repayments and other complex matters.

NatWest: Account Terminations and Branch Closures

Debate between Baroness Kramer and Baroness Vere of Norbiton

Wednesday 10th January 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

The Government do recognise that banks hold a key position in our society. We need to ensure that our banking system meets the needs of that society. Certain banks, as I am sure the noble Lord is aware, pride themselves on keeping their bricks and mortar on the high street. If customers require that sort of service, they should be able to vote with their feet.

[Baroness Kramer (LD)]

My Lords, I think we have something like 20 banking hubs—the Minister will correct me if I am wrong, but it is a piffling number. Will she assure me that, in the statutory instrument that is coming, the banks will be required to participate in banking hubs where their area meets the criteria standard? Everything I have heard up to now still leaves the banks with the ability to refuse to participate even where the standard is met.

[Baroness Vere of Norbiton (Con)]

The noble Baroness is absolutely right. That is why we are putting this voluntary provision on a statutory footing. The Treasury has the power to designate not only banks but the operators of the cash access co-ordination services—Cash Access UK—to do the banking hubs, so they must then follow the requirements set out in the legislation.

Financial Stability: Private Equity Firms

Debate between Baroness Kramer and Baroness Vere of Norbiton

Wednesday 13th December 2023 Lords Chamber

[Baroness Vere of Norbiton (Con)]

My noble friend is absolutely right. We need the right flexible employment laws to ensure that private equity can continue to steward companies that employ millions of people. Indeed, the British Private Equity & Venture Capital Association estimates that private equity-related companies employ 2.2 million workers.

[Baroness Kramer (LD)]

My Lords, the Minister should take the Question from the noble Baroness, Lady Bennett, very seriously. A very large part of the private equity market is heavily overleveraged, although that is often disguised through complex financial engineering; it is not just Thames Water. At the same time, there are serious questions about the condition of the public debt market, with gilt rates so dependent on volatile foreign buyers for their gilt sales. Has the Treasury looked again at the stress tests being used by the Bank of England to see if they encompass potential issues in these two markets? There is a real risk that not just one but both could have serious problems at the same time, with systemic consequences.

[Baroness Vere of Norbiton (Con)]

I reassure the noble Baroness that the Treasury works with the Bank of England and other regulators to monitor the system.

National Insurance Contributions (Reduction in Rates) Bill

Debate between Baroness Kramer and Baroness Vere of Norbiton

3rd reading
Tuesday 12th December 2023 Lords Chamber

[The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)]

My Lords, I am grateful to all noble Lords who have participated in the passage of the Bill. It delivers on the Government’s long-term plan to grow the economy and reform the tax system. It achieves this by cutting taxes for 29 million workers through three measures: a reduction in the main rate of employee class 1 national insurance contributions, or NICs, from 6 January 2024; a reduction in the main rate of self-employed class 4 NICs, from 6 April 2024; and the removal of the requirement to pay self-employed class 2 NICs, also from April 2024. Those who choose to pay class 2 voluntarily will still be able to do so. This simplifies the system for self-employed taxpayers, so that it is more closely aligned with the treatment of employees. The Government intend to fully abolish class 2 NICs, and further details about this reform will be set out next year.

Although this is a relatively small Bill, it has a big impact. It is an integral part of the Government’s long- term plan to grow the economy and reform the tax system but, most importantly, it is fair and it is right, because it stands by working people.

I would especially like to take the opportunity to thank all the Treasury officials for their enormous hard work in bringing the Bill to your Lordships’ House so quickly, such that it will deliver the benefit to workers from January 2024. I beg to move.

[Baroness Kramer (LD)]

My Lords, it is customary at this point to thank all those who have helped us with the Bill. The arduous task of taking it through has perhaps been one of the lighter moments of our parliamentary lives, but there was still a lot of hard work by the Bill team to prepare it. I would thank my staff, except that none of them worked on it. This is just to say a formal thank you to everyone who contributed to this process. We appreciate it.

National Insurance Contributions (Reduction in Rates) Bill

Debate between Baroness Kramer and Baroness Vere of Norbiton

2nd reading
Tuesday 12th December 2023 Lords Chamber

[Baroness Vere of Norbiton (Con)]

My Lords, I am enormously grateful to all noble Lords who have taken part in this relatively short debate. As your Lordships might expect, I did not agree with all the points, statistics and bits of data that were shared, and I will obviously have my own, but I will try to stick within my wheelhouse and stay within the realms of national insurance today.

However, I want to comment on the general thrust from the noble Lords, Lord Sikka and Lord Livermore, and the noble Baroness, Lady Kramer. It was just extraordinary. I feel really pleased that everybody has now come round to the Conservatives’ way of thinking that taxes are too high, and we need to think about reducing them and we must do so responsibly. I am grateful for that vindication of the Conservatives’ policy when it comes to personal taxes. We agree that they are too high, but of course many of the tax rises that are forecast to come into place—I absolutely accept that taxes will go up, although this national insurance cut reduces them—are already announced and baked into the figures.

I did not hear many noble Lords recognising the reasons why we needed to put taxes up—

[Baroness Kramer (LD)]

I was very tactful not to point out that the Minister, as with all Conservatives— I think they have probably signed an oath somewhere—did not mention Brexit and the economic damage it has done, which is a fundamental part of all this. In giving the history of the things that have gone wrong, it is best not to lecture the House when the Government are deliberately leaving out one of the key culprits.

[Baroness Vere of Norbiton (Con)]

My Lords, I definitely was not lecturing the House—far be it from me to do so. However, it would obviously not be a debate without a Liberal Democrat mentioning Brexit.

I am going to move on from that general observation that I am pleased that there is this political groundswell now back behind the Conservatives for lower taxes, which is excellent—

[Baroness Vere of Norbiton (Con)]

The Minister is definitely not looking to expand the debate but is trying to make progress. I hear what the noble Lord says, and if he has read the Autumn Statement, which I am sure he has, he will have seen the announcements made in it about tax avoidance.

Moving on to comments made by noble Lords, I think it is probably not worth rehearsing and rehashing the elements around fiscal drag. Again, I want to put some numbers on record, because there is an opportunity to do so. Thanks to the cut in employee national insurance contributions announced at the Autumn Statement and to above-average increases to starting thresholds since 2010, an average worker in 2024-25 will pay more than £1,000 less in personal taxes than they would otherwise have done. That statement has attracted some interest, and I reassure noble Lords that the calculations underlying this statistic are based on public information, including a published estimate of average earnings. They are robust and could be replicated by an external analyst. This goes back to what I was trying to say about data. Lots of people will do calculations on different bases, but at the end of the day, from the Government’s perspective, we want taxes to come down—this is a start—but of course we will do it only in a responsible manner. However, personal taxes for somebody on an average salary of £35,400 have come down since 2010.

The noble Lord, Lord Sikka, asked about distribution analysis, and the national insurance cuts will of course benefit everybody who pays national insurance. That includes 2.4 million people in Scotland, 1.2 million in Wales, 800,000 in Northern Ireland, et cetera. The latest published HMRC data for 2021 shows that the largest proportion of income tax payers reside in the south-east, followed by London. It will be the case when one has a tax cut that those who pay the largest amount, and the numbers of people who pay tax if they are located in certain areas, are therefore going to see the largest reductions.

However, we have also looked at the impact on women—again, an issue raised by the noble Lord, Lord Sikka. NIC charges apply regardless of personal circumstances or protected characteristics. The equalities impact will reflect the composition of the NIC-paying population. Of course, that feeds into whether we would like women to be paid more. Of course we would. That is why rewarding work will see 28,000 people come into jobs—and I very much hope that they will be well- paid jobs and will be taken up by women.

The noble Lord, Lord Sikka, talked about better-off households. Distribution analysis published at the Autumn Statement shows that a typical household at any income level will see a net benefit in 2023-24 and 2024-25, following government decisions made from the Autumn Statement 2022 onwards. Low-income households will see the largest benefit as a percentage of income. Furthermore, looking across all tax, welfare and spending decisions since the 2019 spending round, the impact of government action continues to be progressive, with the poorest households receiving the largest benefit as a percentage of income in 2024-25. I know that the noble Lord feels that we do not focus on those on the lowest incomes, but he is not correct in that regard.

[Baroness Kramer (LD)]

You cannot eat a percentage of income. Going out and buying a loaf of bread costs you just the same whether you are a high earner or a low earner. So, using the percentage of income comparator to understand the cost of living pressures that people are living under and who is getting the most benefit is not the appropriate measure. If you use the cash number, you realise how much purchasing power arrives for people at the bottom end and how much more purchasing power arrives for people at the top end. That is the appropriate benchmark.

[Baroness Vere of Norbiton (Con)]

I absolutely accept that the noble Baroness is right to say that you can look at it in a different fashion but, in terms of whether what the Government are doing is progressive, it is fair to say that people on lower incomes are benefiting, as a proportion, to a greater degree. Of course, the Government have intervened when it comes to cost of living. That has been cash and that is not about percentage of income. It is all around our energy price guarantee, increases to the national living wage and looking at the uprating of benefits, which will rise by much more than inflation is forecast to be next year. So there are lots of different factors to take into account and sometimes one can be quite blunt when dealing with a tax cut that is, frankly, going to benefit 29 million people.

The noble Lord, Lord Sikka, asked why national insurance contributions do not apply on unearned income. National insurance contributions are part of the UK social security system, which is based on a long-standing contributory principle centred on paid employment and self-employment. ‘Twas ever thus. Of course, a future Government may make substantial changes to that which would again increase the tax burden—but this Government are content that we will maintain the contributory principle.

Banking Hubs

Debate between Baroness Kramer and Baroness Vere of Norbiton

Monday 11th December 2023 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I think what the noble Lord has just set out is exactly what the Government are doing. The FCA consultation goes into an awful lot of detail on the criteria that will need to be met for banking services to continue. We accept that, while the use of cash has declined over time, it has possibly reached a plateau. But I reassure noble Lords that, for example, 97% of the urban population is within 1 mile of a free-to-use cash access point.

[Baroness Kramer (LD)]

My Lords, surely the Minister has hit the nail on the head: the weakness of the current banking hub system is its voluntary character. That could be corrected with a relatively simple statutory instrument so that, when a local community applies to Link and is shown to meet the criteria, a banking hub is guaranteed and it does not suffer what happens today—delay or refusal by the banks.

Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023

Debate between Baroness Kramer and Baroness Vere of Norbiton

Wednesday 6th December 2023 Grand Committee

[The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)]

My Lords, these draft regulations will expand the application of the existing insolvency arrangements for electronic money and payment institutions so that they apply to firms in Northern Ireland and Scottish limited liability partnerships as they already do in England and Wales, as well as for companies in Scotland.

The payment and e-money sectors have expanded rapidly over the last decade, with payment and e-money institutions now holding more than £17 billion of funds belonging to UK consumers. As the sectors have grown, the Government became concerned that the application of standard insolvency procedures to the failure of these firms was leading to negative outcomes for customers. In particular, administration cases involving these types of firms were taking years to resolve, with customers left without access to their money for prolonged periods and receiving reduced money as a result of high distribution costs.

To manage these risks, the Government legislated in 2021 for a special administration regime to provide for the prompt return of client assets should such a firm fail. This regime was delivered through the Payment and Electronic Money Institution Insolvency Regulations 2021 and the accompanying rules. These regulations established the special administration regime in England and Wales, and for companies in Scotland. This regime created special administration objectives that an administrator will have to follow when conducting an administration of a payment or electronic money institution.

The key provisions of this regime include: first, bespoke objectives for an administrator to ensure the return of customer funds as soon as reasonably practicable, to engage with the relevant authorities and to either rescue or wind up the institution in the best interests of creditors; secondly, continuity of supply provisions that will allow an administrator to keep the firm’s key functions operational for customers; thirdly, provisions to ease the transfer of business processes such that a new firm can take on the incumbent’s business and provide continuity for customers; and, finally, bar date provisions to allow the administrator to set a deadline for consumers to claim and thus enable an earlier distribution of customer funds.

The Government originally consulted on the special administration regime from December 2020 to January 2021. This included not only public consultation but pre and post-consultation meetings with industry groups, including the Banking Liaison Panel, as well as extensive work with the FCA. During the consultation process, most respondents expressed support for the proposals and many provided detailed and useful comments which enabled the refinement of policy. For example, the Government introduced additional steps within the special administration regime rules to require administrators to provide a reasonable notice period before a bar date comes into effect. This will allow time for administrators to communicate bar dates to customers and for customers to make claims.

In responding to the original consultation, the Government confirmed their intention eventually to extend the regime to Northern Ireland and to limited liability partnerships in Scotland, but that this would be to a different timetable, reflecting further work that was needed given differences in insolvency law. The Government therefore subsequently consulted extensively with the Scottish and Northern Irish devolved Administrations to produce the regulations being debated here today.

As noted, this statutory instrument is required to ensure that the regime can effectively apply to Scottish limited liability partnerships and to firms in Northern Ireland, ensuring that the regime applies effectively across the whole of the United Kingdom. For example, these regulations ensure that the relevant provisions of the Insolvency (Northern Ireland) Order 1989 apply to the payment and electronic money special administration regime, as they would to any other insolvency proceedings for Northern Irish firms. This mirrors equivalent provisions which ensure that the relevant provisions in the Insolvency Act 1986 apply in England and Wales. This includes provisions around the duties of officers and the powers of the liquidator.

These regulations do not apply the insolvency procedure to Scottish partnerships, as they are sequestrated under the Bankruptcy (Scotland) Act, which is a devolved matter for the Scottish Government. In addition, Scottish partnerships, apart from limited liability partnerships formed in Scotland, do not currently enter administration and would not be within the scope of the regime.

In conclusion, by expanding the application of these regulations to the relevant firms in Northern Ireland and to Scottish limited liability partnerships, these regulations will ensure that we have robust arrangements to manage the potential insolvency of payments and electronic money firms throughout the UK. I beg to move.

[Baroness Kramer (LD)]

My Lords, this instrument seems to make good sense and we certainly have no intention of opposing it. I have just three questions. First, I understand that it was always anticipated that this regulation would stretch over Northern Ireland and Scotland as well as England and Wales, so it seems very strange that the consultations for Scotland and Northern Ireland were not done in parallel with the consultations for England so that, when the legislation came in, the relevant instruments could all flow immediately, rather than creating a two-year hiatus. Is there any particular reason why that procedure was not followed? It would seem to be the more obvious route.

Secondly, the Explanatory Memorandum makes it clear that there was extensive discussion with the relevant bodies in Northern Ireland and Scotland, and the Minister basically said the same. Was there expected to be any formal approval by the devolved Governments, or was that not relevant in this instance? Can the Minister clarify the position of the devolved authorities in this? From the way she described it, it sounds as though there has been no tension or opposition, but it would be helpful to know whether I have misread that.

My last question is a more fundamental one to do with the hard bar. It is obviously critical to have an efficient and effective insolvency process, and I fully accept that the Government are working to frame that. When I was involved with the transition out of Libor, or dealing with dormant assents, it rapidly became evident that it is very hard to identify anything close to 100% of the relevant claimants. Organisations change their names, they are acquired or sold, there are inheritances—all kinds of actions cloud and obscure relevant ownership and, therefore, relevant claims.

In the two instances that I cited, Libor and dormant assets, a provision was made to ensure that people who appear past the point where the process has fundamentally changed do not lose out because they were ignorant. Some will say that most people were overwhelmingly in support of this in the consultation, but the kind of people who do not know that they have a claim are also probably the kind of people who do not reply to a consultation. The experience with dormant assets and Libor has shown that there is a substantial body of people and, usually, small companies who have a genuine legal claim of some sort. I am interested to know whether any thought was given to making provision for that particular group, which could be excluded by the establishment of a hard bar. I have no idea what the legal responsibilities of the administrators are if a claim is made after a hard bar has been established—whether the claimant loses no matter the basis of their claim. I would like to understand that a bit better.

Public Charge Point Regulations 2023

Debate between Baroness Kramer and Baroness Vere of Norbiton

Wednesday 13th September 2023 Grand Committee

[Baroness Kramer (LD)]

On the reliability issue, why does that not apply to the AC network, which is the one that most people use? It applies only to rapid charging, which is, I think, the DC network.

[Baroness Vere of Norbiton (Con)]

Again, it goes back to what we feel able to bring in at this time in terms of reliability. It will be something that we keep under review because we should be in a situation where we can require reliability. To my mind, the most important element of all this is open data because that will provide real-time information about whether a charge point is working and whether somebody is currently plugged into it. I accept that there will be circumstances where people are parked in a charging spot, as experienced by the noble Baroness, Lady Deech —that is very unhelpful—but many of the big concerns will be met by the open data. The other thing that will happen is that the roaming providers will start competing on the accessibility of that data and their ability to analyse it and provide it to drivers in an easy-to-use form.

The noble Baroness, Lady Kramer, and the noble Lord, Lord Tunnicliffe, mentioned micro-businesses. As noble Lords will know, it is current standard practice to exclude micro-businesses. Most of them are not excluded from the requirement to do price transparency, which we think will be helpful. There are 28 micro-businesses that will be excluded from the requirements set out in these regulations. They operate around 5,000 devices so they are less than 10% of the market. One anticipates that those micro-businesses will not be micro-businesses for much longer because they will grow or there will be some consolidation in the market. However, that is the way that regulations often work; I hope it is helpful to have that explained.

There has been some focus on the helpline and the fact that calls may be held waiting despite being very valuable to the company. We agree that there is always a risk of that. The operators of 24/7 helplines will have to report to the Secretary of State every month on the total number of calls and the time it takes to resolve those issues, which I believe will be helpful.

I did not receive any questions about enforcement but I think it is worth noting that the Office for Product Safety and Standards will be the enforcement body for these regulations. It is very experienced at this. It will take a targeted approach to enforcement, so operators that we know are potentially not quite as good as others will get far more inspections than those we know are meeting not only the letter of the regulations but the spirit too. It is all about working with industry on this. We will take a pragmatic approach to enforcement but there will be financial penalties that can be used if required.

Turning to matters slightly beyond the statutory instrument, I know that noble Lords have a keen interest in the number of charge points. A number of figures have been bandied around. The Government stick to their estimate that we will need around 300,000 charge points at a minimum; we recognise that it is a minimum. In the past year, we have seen an increase of 38%. In May and June alone, we saw an extra 1,000 charge points going in, so there is momentum in installations coming down the track.

The noble Lord, Lord Tunnicliffe, was a little sceptical about whether we will even reach 300,000. Not everybody is sceptical. The independent National Infrastructure Commission has stated that it expects us to reach the figure if we can increase the number of charge points by around 30% per year, which has happened in recent years. Sometimes this needs a little financial help from government, and financial help is available. We have the rapid charging fund, which is good for less viable grid connection but also focuses very much on the strategic road network and motorway service stations. Then we have the local electric vehicle infrastructure fund. This comes to the point about how there are fewer charging points in certain areas. I encourage local authorities in those areas to ensure that they have made themselves aware of this fund and applied for it. Last time I looked, a number of local authorities had not. It is a way to improve areas. National government cannot do it but local authorities can pick up the baton and work with that.

I seem to have come to the end of my notes. I therefore hope that I have come to the end of your Lordships’ questions. However, as ever, my officials will read through Hansard. I am fairly sure that a letter will be forthcoming anyway because there will be other things that we would like to explain about these regulations.

Electric Vehicles: Charging Points

Debate between Baroness Kramer and Baroness Vere of Norbiton

Monday 14th March 2022 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I recognise the point raised by the noble Lord; there has been some media coverage about that recently and we are looking at what we can do. However, people are never more than 25 miles away from a rapid charger on the strategic road network, which is particularly good for long distance journeys. The Government have done an enormous amount of consultation over the past year on how we can mandate for new standards and for reliability, ensure that consumers can access support if they have trouble charging, make it easier for consumers to find the right charging point and its availability by publishing open data, and ensure that the costs are published as well, so that consumers can compare the costs of different chargers.

[Baroness Kramer (LD)]

My Lords, as we might be working late, I decided to drive in today. The first three public EV chargers were broken. I finally found a free and available fourth. Does the Minister understand that many people who have bought EV cars are now starting to regret it, and can she step away from this market-driven approach to rolling out infrastructure which at present is random, unreliable, and desperately inadequate?

[Baroness Vere of Norbiton (Con)]

I cannot agree that it is unreliable and desperately inadequate. We cannot control from Whitehall where EV chargers are—that would be utterly mad. We must work with the local delivery partners—the local authorities—and the private sector. At the end of the day, it will be the private sector which puts these charges in place. It will not be Whitehall, so we must ensure that the local authorities have the skills to figure out where their communities need their chargers. We are particularly concerned about those who do not have access to off-street parking, and we will be asking local authorities to focus on those people.

High Speed Rail (West Midlands-Crewe) Bill

Debate between Baroness Kramer and Baroness Vere of Norbiton

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords & Committee: 2nd sitting : House of Lords & Committee: 2nd sitting
Thursday 12th November 2020 Grand Committee

[Baroness Vere of Norbiton (Con)]

I do not think I have anything further to say to the noble Lord, Lord Adonis. I too would very much appreciate hearing from the noble Baroness, Lady Kramer.

[Baroness Kramer (LD) [V]]

Thank you. I would very much like to take up the Minister’s offer of a meeting with the HS2 Minister, Mr Stephenson. That would be extremely helpful. I hope she might have the opportunity to spend a little bit of time looking at some of the cases. I want to challenge the myth that signing a non-disclosure agreement is essentially voluntary. I think that she will find that it is just standard practice, or a meeting is not offered.

The Minister will also recognise that the non-disclosure agreement then covers everything contained within the meeting. As I say, there may be nuggets that genuinely should remain confidential, but there is a great deal of information that should be out in the public arena. It is a mindset, in a sense, for how organisations conduct themselves—whether it is transparency around information not disclosed on an exceptional basis, when there has been careful thought about whether or not that information should be disclosed, or whether the presumption is that everything will be kept behind the closed kimono and information will made available only on an absolutely must or need-to basis. We need some rethinking on this, because that has not served us well.

The Minister will know from her own experience of looking at infrastructure projects that they come up with shocks. We are probably both very aware of Crossrail, which appeared to be completely on track almost until the very final moments, when we were all expecting the announcement of its opening, when we discovered that it was several years behind.

This issue has to be tackled. The issue of individual whistleblowers is one that I would very much like to take up with Ministers, because a salutary conversation between Ministers and senior management at HS2 could make very significant improvements in that arena.

[Baroness Vere of Norbiton (Con)]

Well, okay, I thank the noble Baroness for her further intervention. I am not wholly the wiser as to what she is trying to do here. She has mentioned the shock of Crossrail. I was not aware that that was anything to do with NDAs. But she was a Transport Minister, so she knows how projects work, and I was actually discussing Crossrail earlier today and asked exactly the same question about how on earth that happened. It is the case that sometimes, for whatever reason, costs increase, but I was not aware that with Crossrail there was an issue with NDAs. If she has information in that regard, I would be happy to receive it, because it would be news to me.

Hammersmith Bridge

Debate between Baroness Kramer and Baroness Vere of Norbiton

Wednesday 9th September 2020 Lords Chamber

[Baroness Kramer (LD)]

My Lords, with apologies for jumping the gun, I beg leave to ask the Question standing in my name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, that is because the noble Baroness is desperate to hear my Answer, I am fairly sure. We in government and beyond—certainly residents on both sides—are keen to see the bridge open as soon as it is safe so that, at the minimum, people can cycle and walk across, river traffic can pass under it, and in time we can see it returned to full use. To help to find a speedy resolution to this rather tiresome and tardy situation, the Government have announced today that they have established a task force. I will lead it and I shall bring together the key decision-makers in London. We will get a solution, figure out how to fund it, and ensure that action is taken. This has been going on for too long; we need to get something done.

[Baroness Kramer (LD)]

My Lords, as the Minister said, the impact on the community is absolutely dire, in particular on the transport network. More than 1,000 schoolchildren are taking nearly two hours to get to school. We urgently need a temporary solution. Regardless of the task force, under the current circumstances the only body that has the money to provide both a temporary and a long-term solution is the Government. Can she give an assurance that that money will be made available so that this hell can be lifted as soon as possible?

[Baroness Vere of Norbiton (Con)]

My Lords, one of the problems I have faced over my many months in the world of Hammersmith Bridge is that no one seems to be able to decide how much money is actually needed, and what for. That is why I have set up the task force, so that we can lift the lid on all the proposals, see whether we can assure ourselves of their validity, and then figure out how we might fund them. At the moment, I have figures ranging from £26 million, £47 million, £141 million to £164.5 million.

Hammersmith Bridge

Debate between Baroness Kramer and Baroness Vere of Norbiton

Tuesday 7th January 2020 Lords Chamber

[Baroness Vere of Norbiton]

I agree with the noble Lord that Hammersmith and Fulham might not have the financial resources, or perhaps the skills, to repair the bridge on its own. As it is an asset that benefits a wider area in London, the responsibility perhaps lies more broadly, and I expect that TfL will take a role in driving the project forward. As I have mentioned, we have not yet received any request for funding from TfL, but we will of course consider it should it arise.

[Baroness Kramer (LD)]

My Lords, might I declare an interest in that I live only a few yards from the end of Hammersmith Bridge? During the election campaign, quite a number of Ministers, including the Secretary of State for Transport and Treasury Ministers, came and made little videos at the end of the bridge. I was the elderly-looking lady in a hat with grocery bags standing in front of them. They committed to full financing being immediately available with no questions. I hope that they will also follow through and provide financing for the temporary pedestrian and cycle bridge necessary to speed up the repair work.

[Baroness Vere of Norbiton]

My Lords, certainly not elderly, I am sure. I, too, made one of those videos—perhaps the noble Baroness did not see it. The key thing is that we said we would consider any proposals put to us. If the noble Baroness goes back to the videos, I think she will find that that was indeed the case. We will consider all proposals, but it will be up to TfL to put forward proposals according to its priorities. I remind the noble Baroness, however, that TfL has a budget of around £10 billion. Within that budget, the streets funding stream has operating costs of £500 million. There is also a pot for capital investment of £250 million.