Lord Davies of Oldham
Main Page: Lord Davies of Oldham (Labour - Life peer)Department Debates - View all Lord Davies of Oldham's debates with the HM Treasury
(13 years, 5 months ago)
Lords ChamberMy Lords, this has been a fascinating debate and a challenging one for the Minister to respond to, not least because, although three distinct areas of legislation are referred to, all with a common theme, they each present their own enormous complexities.
The common theme was adumbrated immediately by the noble Baroness, Lady Williams, in her opening introduction to the debate in which she stressed in a very powerful way her concerns about fairness. That was buttressed by my noble friend Lord Eatwell indicating that our financial system also rested upon trust. The fact that the debate has a strong undercurrent of principle attached to it should come not as any surprise but as a realisation that such principles should underpin our legislation. In these areas they are efficacious in ensuring that we play our full part in the modern world, were our economy to recover and, in due course, flourish.
There were some discordant voices, such as the noble Lord, Lord Hodgson, and the noble Baroness, Lady Wheatcroft, with support to a certain extent from the noble Lord, Lord Newby, who is eager to look at the issues of businessmen on the ground. The noble Viscount, Lord Eccles, also gave us the benefit of his considerable experience in this area. While we recognise the problems that businessmen face, though, the issues that we face are clear. This is a debate about our legislation in these three areas and its effectiveness. As noble Lords have identified, we have not been coming out of international comparisons of effectiveness well. This is of colossal importance.
To take the first dimension of bribery that the noble Baroness, Lady Williams, identified, we all know the challenges that are presented by dealing with regimes that are different from our own. After all, it is not so long ago that the British Government also lived with a bribery culture. We should not suggest that somehow we have had 700 years of glorious history free from bribery; very far from it. It was an underlying principle of government for several hundred years. In fact the best quote that I know about bribery is from Lord Burghley, founder of the Cecil family, with their significance in our political life. He said, “I may be bought”—that is, I never refuse a present—“but I do not sell myself”—in other words, my judgment is not impugned. That is scarcely a democratic sentiment but it is a step along the road towards cleaner and more proper government. We have prided ourselves on the Governments that we have, and we ought to; they are relatively corruption-free, with very small exceptions, with regard to either Administration and the work that our civil servants do. We all know that we have limited issues there.
The Bribery Act, as the noble and learned Lord, Lord Mackay, emphasised, was passed by both Houses without serious division. It was part of a general view that we need this legislation in order to restore our reputation, which has been declining with regard to this issue. We are all party to that Act but the issue, as the noble Lord, Lord Hannay, emphasised in his contribution, is one of implementation. When is it going to be implemented? That has underpinned a number of contributions in this debate. I say to the Minister that we recognise that consultation is necessary—everything can be improved by hearing voices accurately—but this has gone through the full parliamentary process. We have all had our chance to talk to everyone outside and make our contributions, and so have our colleagues in the other place. We expect the implementation of an Act passed by Parliament. We are anxious about the degree of delay that there seems to be, not least because, as a number of noble Lords have emphasised in this debate, we look a lot weaker in this area than the United States, Hong Kong and direct business competitors on the international stage. That will not do. We require high morality to underpin both the basis of our legislation and the way that business conducts itself because, as my noble friend Lord Eatwell emphasised, the City depends on reputation as well.
I thought that we were going to spend a great deal of the debate on the issue of bribery, as indeed we have, because it was the most recent of our laws in this area to be passed and the one that has still not effectively been implemented. However, I was glad that my noble friends Lord McFall, Lord Haskel and Lord Eatwell and the noble Lord, Lord Phillips, commented on the issue of tax avoidance. We all recognise that we would benefit from simpler legislation because it is easier to comply with. We all know the challenges with regard to tax legislation. When one is seeking to give incentives and to deter specific practices, legislation becomes increasingly complex and, therefore, a challenge. As we all know, there is massive investment in the industry concerned with giving advice to businesses on how to avoid—not evade—certain commitments.
We must be strong and tough in this area. The situation is scandalous and the nation sees it as such. It is not just scandalous that banks had to be bailed out by the taxpayer to the extent that they were, and that some practices were considered to be on the wrong side of sound morality, but when it is subsequently identified that a bank such as Barclays pays such a small fraction of its total profits in corporation tax, of course our people view that as an extraordinary situation. Those institutions do not even pay adequate taxation when they are making so much profit and the vast majority of people in the country are suffering privation. That is why we should look at implementation. This is not about the law but whether the Inland Revenue has the resources to pursue the objectives which we set for it in law. I cannot understand why—I cannot think of any business that would understand this—we underprovide for a body that brings in revenue. The Government go in for profit maximisation. Putting extra resources into the Inland Revenue will produce extra returns, yet the Government are engaged in wholesale cutting in that regard.
I will conclude briefly as my time is very limited. Recently, we introduced legislation on money laundering as we were becoming increasingly anxious about the extent to which money laundering might fund international terrorism. Therefore, the relevant laws are in place. However, as the noble Lord, Lord Hannay, and other noble Lords have emphasised, this is a matter of implementation. We should be ashamed of a situation in which it is clear that those whom we knew to be tyrants and who paid scarce regard to the needs of their people have been able to salt away vast sums. On the whole those tyrants exploited countries with limited economies and very many poor people while keeping resources available in London for their own use.
The Minister will, of course, say that the relevant legislation is in place. That is certainly true but this matter is about good, resourceful government and the ability to implement a measure that the House wishes to see implemented.