Finance (No. 2) Bill

Debate between Lord Brooke of Alverthorpe and Lord Bates

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords & Report stage (Hansard): House of Lords
Thursday 8th March 2018 Lords Chamber

[Lord Brooke of Alverthorpe (Lab)]

My Lords, could it be perhaps that noble Lords wish to speak in the next debate, which they see as more important?

[Lord Bates]

That is one possible explanation, but your Lordships have always been assiduous in their attention to matters such as the Finance (No. 2) Bill before us.

Let me try to address some of the points that were raised. The first point was on the argument about growth. We were the joint fastest-growing major economy just as recently as 2016. Of course, there has been a level of uncertainty as a result of the British people’s decision to exit the European Union; that is understandable and most people would recognise it. However, I do not see 1.7% as being a miserable or pathetic rate of growth, or that other OECD competitors with rates of 1.9%, 2% and 2.9% are experiencing extraordinary rates of growth. We entered into this cycle of growth out of the recession of 2008-09, much earlier than others. Therefore, we are at a different stage of growth. But to be able to say that we have grown for 20 consecutive quarters—five years of growth—and that manufacturing has grown for eight consecutive months, which is the longest continuous streak for 30 years, is surely reason for a degree of optimism.

The noble Baroness, Lady Kramer, asked about NHS funding. The Budget provided an extra £6.3 billion of new funding for the NHS, and we are committed to increasing the NHS budget by a minimum of £8 billon in real terms over the next five years. This is a significant first step towards that. The NHS is seeing over 2.9 million more A&E patients every year compared to 2010 and treating 57,000 more people every year for cancer, giving the UK its highest ever cancer survival rate. The noble Baroness asked whether we would have a hypothecated tax for health. Of course, we have such a tax in the sense that 20% of NIC receipts go directly towards the National Health Service.

On the point about housing provisions not bringing about changes, if the measure on stamp duty were taken alone, that might well be true, but it will help a million first-time buyers. Surely that has to be welcomed. In the wider context, the fact that employment is at almost record levels, with 3 million more people earning a salary than in 2010, must also be helpful for the housing market, because it means they have a salary with which potentially to buy. But that is not enough, and it is why we said that stamp duty was one element of that. Another element was to go towards our aspiration of building 300,000 new homes each year.

Let me turn to investment—I think the noble Baroness said that business investment had “fallen off a cliff”. Again, that might be overstating it a little. Business investment contracted by 2.6% in the year to the EU referendum, but grew by 2.5% in the year since. The OBR forecast is for business investment to grow by 2.5% in 2017 and 2.3% in 2018-19, which is a different approach. A key element of that was extra funding of £31 million for the productivity investment fund. That will make a significant contribution, as will businesses investing in themselves, which is the most successful form of business investment. The corporation tax rate has fallen from 28% to 19%, which means that small, medium-sized and large businesses have more money to invest in their own businesses and their own futures.

The noble Lord, Lord Davies, referred to the equality briefing. It was under this Government that we became one the first countries to introduce gender pay gap reporting. The gender pay gap for full-time employees is at a record low. Building on this, the Budget announced steps to boost female enterprise and innovative trials to support women returning to work. The number of women in work is at a record high of 15 million, an increase of 1.4 million since 2010, of which 80% were full-time. The gender pay gap for full-time employees is at a record low of 9.1%.

There are reasons to recognise that we need to be prepared to strengthen the economy to make more it competitive internationally so that we make a success of Brexit for Britain. The people who do that will be the workers and businesses of this country. This Bill strengthens measures to help them by reducing their taxes, increasing incentives to invest—especially in knowledge-intensive industries—and helping young people to achieve their aspiration of getting on to the housing ladder. These are all reasons why I am happy to commend this Bill to the House.

Sterling: Euro Exchange Rate

Debate between Lord Brooke of Alverthorpe and Lord Bates

Monday 9th October 2017 Lords Chamber

[Lord Bates]

I acknowledge the noble Lord’s great professional experience in economics, but I am saying something slightly different. I am not saying that we do not pay attention to that and do not watch it at all; I am saying that the way in which it has been configured, through successive Governments, is such that this is a matter for the Monetary Policy Committee of the Bank of England to respond to. Where inflation rises above 3%—its target is 2%—it has to respond. Where it sees matters which are causing concern, it can choose to cut interest rates—as it did after the referendum, to historically low levels of 0.25%. We are not saying that we do not have any policy; we are saying that we have a core set of policies which the Government are responsible for and we are acting on them.

[Lord Brooke of Alverthorpe (Lab)]

Will the Minister explain to the House why we have been downrated?

[Lord Bates]

If someone wants a historical lesson on the accuracy of the ratings agencies in making predictions, the events of 2008-09 might raise some question as to what they were doing then. We are talking about a downgrade of one notch. That reflects some concerns that they have about the transition period as we exit the European Union. They are perfectly entitled to say that. We are saying that we have a clear plan as to how we want that exit to happen, we want it to happen as soon as possible and we believe that the prospects for this country thereafter are very positive indeed.

Public Sector Pay Cap

Debate between Lord Brooke of Alverthorpe and Lord Bates

Wednesday 5th July 2017 Lords Chamber

[Lord Bates]

Not for the first time, I am happy to stand corrected by my noble friend Lord Tebbit.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I will return to the Minister’s point about productivity. I have raised questions previously about the extent to which public servants are being encouraged to work and change their productivity and to find ways in which they might be rewarded. Can the Minister say whether any instructions are being sent to the pay review boards about this, to search for better productivity? There may be an opportunity for more money to be paid to public servants if productivity can be linked to their performance, and this may be a way out of the impasse we find ourselves in.

[Lord Bates]

We look at that constantly. When I was at the Home Office we looked at that with regard to the police, as reducing bureaucracy improves practices and efficiency within the police force. We were able to maintain levels of front-line policing while at the same time we saw crime falling to record lows. So all these things can be looked at and improved.