Brexit: European Investment Bank (European Union Committee Report)

Lord Davies of Oldham Excerpts

Tuesday 16th July 2019 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I too congratulate the noble Baroness, Lady Falkner, both on her conduct of an excellent committee and a splendid report and on the speech in which she presented the issues. All other contributions really just reinforced the main points she made, which covered an excellent report that presents to the Government a series of very acute challenges. The Minister is of course adept at dealing with such things, but we expect some fairly clear answers to several of the issues that have been established on all sides this evening.

It is not often that I agree with the noble Viscount, Lord Trenchard, on economic issues, but I certainly agreed with him this evening when he indicated that we have to be careful about allowing the accountancy to dictate our whole strategy to meet the economic challenges we face. There have been many calls from all sides of the House that the Government really must not fall behind the old blocks of their defensive position on the problems of government debt, when significant levels of investment are obviously necessary. Of course, it is clear from the report that we have lost a very substantial part of our investment. For investment to drop by nearly 90% is a significant tragedy. This, after all, is one of the most significant investors in our infrastructure and it covers a wide range of areas. Noble Lords identified the environment, higher education and a range of other issues which will lose the investment that this bank provided. We all want to know what steps the Government are taking to repair the damage and provide the investment.

At the same time, the Minister has to address the fact that none of us in this House can understand how we reached an agreement in which we get the repayment of the capital that has not been utilised thus far but make no gains at all from our years of investing in the bank. Some government negotiation arrived at that judicious position. We all worry about the broader issues of negotiation with Europe, but this stands out as a pretty clear indication of how weak the Government’s position was at times.

We also recognise that infrastructure is a crucial aspect of the development of any economy, particularly an advanced economy such as ours. We have not had a good record in the past; the Government have to face up to the fact that their record is pretty dismal. The two areas on which they are making some progress were inherited from the previous Labour Government—HS2 and Crossrail, the latter of which is of course subject to fairly significant delays at present. Most of the other rail initiatives—the cross-Pennine route and the opening up of the London to Sheffield route—have been put into cold storage for the time being. It is not as if we have a surfeit of funds for infrastructure, yet we are discussing this evening how we have cut ourselves off from a crucial supplier.

We must also recognise how noticeable it is that regional issues are coming more to the fore. We all know why London has been pre-eminent for so long. We all know the significance of the City of London, but that does not mean that you do not have proper respect for regional development. There is absolutely nothing in the Government’s current position which gives us any encouragement on that, yet resources that we were getting from the investment fund from Europe offered some possibilities on that front. This is another crucial area which we lose.

My noble friend Lord Giddens asked us to consider a rather wider agenda: a future which related to the space industries, on which we have a past record of investment and in which we are well placed to play a leadership role. However, he identified that here, again, was a necessity for government action. Can any noble Lord recall, apart from my noble friend’s contribution today, the last time we had a debate on the space programme and the role that Britain might play in it? Of course, the anniversary of the moon landing was a pretty predictable date—there is bound to be colossal public interest at this time—yet I cannot recall the Government making any significant contribution on it.

Of course, the Government are not in a position to think about spending too much, because after a decade of running the economy they are still stuck with their hugely significant debt and the real problem of how they distribute it. It is true that a future Prime Minister can easily produce a massive tax cut for the very wealthy in our society, or certainly those earning over £80,000—but is that not the same individual whose bus suggested that enormous millions would accrue to the British economy from Brexit? Well, we are defining the reality of Brexit this evening, and we are not talking about hundreds of millions of pounds accruing to the British economy.

It is quite clear that the Minister must give some response to the gap which has opened up. After all, he knows that it is a product of the withdrawal agreement that we reached and the negotiation which took place at that time, and noble Lords have identified just what the cost is for us. Because the investment bank covers a wide range of British economic activities, the cost will be and is being borne across the board.

We on our side of the House enjoy a certain degree of criticism of the Government but we also have enormous respect for a disaffected electorate who want to see success from political leadership. That is why we are quite clear that, if we came to power, we would launch a national investment bank, address regional disparities, and set out to ensure that resources were directed towards improving our productivity as well as our wage levels, which have been so depressed over this last decade. We would also seek to ensure, through a rather more imaginative immigration policy than the Government pursue, that we have the necessary high-level skills to ensure that we get the levels that the financial services sector will demand. We should be wary of restrictive blocks on skilled people who are essential to our economy.

These are possible developments. They of course require a degree of commitment by the Government to a clear policy. But what the Government committed themselves to and are still largely saddled with is in fact clearing debt—not investment in the creative part of the economy at all, but seeking to ensure that their credit rating holds to a certain level. No one will decry that in its entirety, but one can overload that dimension of financial and economic life to the extent that the economy suffers constant low levels of growth and constant problems with our productivity.

There are solutions. I was grateful to the noble Viscount, Lord Trenchard, for mentioning the German bank and the role which it plays in the German economy. It is not as if we do not have a model of the way in which we can create productive resources which can be independent of government yet act as a reaction to any downturn in the economy. He made that point clearly. As I said, it is not often that the House is in total agreement, but if he and I can agree on a strategy this evening, we hope the Government can too.

Small and Medium-sized Enterprises: Mistreatment

Lord Davies of Oldham Excerpts

Thursday 27th June 2019 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I too congratulate the noble Baroness, Lady Bowles, on securing this debate and on the forensic quality of her speech. We needed to add very little once she had completed the charge sheet, but nevertheless other noble Lords have contributed to the testimony of just what a scandal we are considering. Yet the result of the scandal, as identified in this debate, is that the Royal Bank of Scotland offered an apology. The Financial Conduct Authority, which supposedly had a clear role as a regulator, states that it has no powers to make clear what happened, and therefore expresses regret.

It is contended that the Treasury hopes for an extended role for the Financial Ombudsman Service in some aspects of disciplining malpractice in banks but we have seen no clear position yet. As the noble Lord, Lord Sharkey, indicated, there do not seem to be any consequences from this scandal because of the continuation of a large number—30 out of 32—of the senior administrators with the bank.

There has been an explosion at the other end of the Palace of Westminster. Many Members of Parliament, having been made fully aware in their constituencies of the devastating effect on small companies, have demanded action. As they have made their contributions and carried out their analyses—particularly the chair of the Treasury Select Committee, who is in a privileged position to be able to do that and has done so brilliantly—they have exposed just what the scandal represented.

There have been apologies, shrugging of shoulders, an attitude of “can’t do anything about it” and no question of knowing how we are meant to see fair settlements made, but the Government have not yet produced an obvious response to this position. This cannot be. The other place is clearly advocating more trenchant reforms and everyone who has spoken in this debate has identified that the present system is incapable of coping with issues of this importance. A large number of SMEs, an important part of the economy, have been bulldozed out of existence by the crass operations carried out by the global restructuring group of the bank.

The Government need to take seriously some of the proposals now being put forward. There is the suggestion from the other end that a tribunal system be set up to deal with disputes between SMEs and the big banks. It is clear that individual small companies do not have the resources to engage with the major banks in legal and financial struggles and that they will be beaten into the ground, as they have been through this experience.

Most of all, it is clear that the concept of self-regulation is being rejected. It has failed on this occasion in a most lamentable way. We all know the Government’s reservations about additional regulation but they have to appreciate that the report of their regulator—the Financial Conduct Authority—has sunk like a stone and has caused dismay. I trust that the Minister will give additional information on the possible responses to this position in his wind-up speech.

I emphasise that from this development my party has learned the lesson—there have been others, which have also been greatly worrying—that we must have a regulatory architecture involving a business commission to replace the existing network of regulations, which have clearly failed. It is inconceivable that a person running a small company should be told that the regulator, unfortunately, does not have the powers to make any form of restitution.

We are also committed to a national investment bank, with a network of regional banks and a post bank focused on relationship lending, and we mean to keep RBS in public ownership. RBS owes a great deal to the community—for the bailout and the ultimate responsibility for this scandal—and it is important that it is kept under a high degree of public scrutiny. We intend to have banks that serve the public interest and guarantee that the banking industry will support infrastructure, the SMEs and the broader issues of public goals. We cannot afford another scandal like this one, and the Government cannot afford to ignore the necessity for drastic action.

Banks: Cash Withdrawals

Lord Davies of Oldham Excerpts

Tuesday 11th June 2019 Lords Chamber

[Lord Young of Cookham]

The noble Lord is quite correct that LINK is directly commissioning ATMs in areas that do not have one but need one. If he has a particular area in mind that needs an ATM but does not have one, I am sure he will let LINK know. The company has tried to ensure the viability of free-to-use ATMs in deprived areas by increasing the transaction fee that the ATM owner gets to £2.75 per transaction, against the standard fee of 25.9p. LINK’s policy is that where it has to shrink the estate, it does so by removing ATMs that are close to another one—73% are within five minutes’ walk of another one—but maintaining free-to-use ATMs in remote or deprived areas.

[Lord Davies of Oldham (Lab)]

My Lords, I am sure the Minister will appreciate that the banks owe wider society a great deal after 2008. How is it, therefore, that somewhere like Hebden Bridge—and I do not always quote Yorkshire with enormous favour—has no bank and only six ATMs at present? Those six are being reduced to two, and the two are so busy that they run out of cash. How is this system, which the Minister has just commended, working?

[Lord Young of Cookham]

I will certainly draw LINK’s attention to the problems the noble Lord has just outlined in Hebden Bridge. I hope that Hebden Bridge also has some post offices. We have invested £2 billion in post offices since 2010 in order that they can provide access to cash and other banking facilities. However, I will contact LINK to see whether we can ensure that those cash machines in Hebden Bridge are fully charged, in view of the pressing demands of the residents of that town for cash.

National Health Service: Pensions

Lord Davies of Oldham Excerpts

Monday 10th June 2019 Lords Chamber

[Lord Young of Cookham]

My Lords, in the interval between my noble friend tabling his Question and today, the Government made a significant announcement on 3 June aimed at addressing the very problem that he addresses in his Question, and no doubt he can claim some credit for that chain of events. On the point about the impact on patients, between 2018 and 2019 57% of GPs who retired took early retirement. Some consultants are unwilling to take on extra sessions because of the impact on their pensions, and that has an impact on the quality of service that we can provide. On his more detailed question, I understand the sense of injustice that he feels about the circumstances that he has described. I will see whether the consultation that begins at the end of the month can be stretched to include the broader review that he has just proposed.

[Lord Davies of Oldham (Lab)]

My Lords, are not the Government being more than a little tardy in response to this situation? After all, they introduced the pension arrangements in 2015 and it is clear that they made a right mess of them in some respects. In addition to the range of people whom the noble Lord, Lord Naseby, spoke about a moment ago, both ends of the medical profession—younger doctors and consultants—are greatly aggrieved at the provision of pensions under the 2015 legislation. I just wonder why the Minister can say with equanimity that we are getting round to a consultation.

[Lord Young of Cookham]

It is important that noble Lords understand the background to the changes. One of the most expensive tax reliefs is pension tax relief. It costs £50 billion per year—roughly half the budget of the NHS. Two-thirds of that goes to additional, or higher-rate, taxpayers. The reforms introduced over the last two Parliaments were aimed at targeting the relief more effectively and saving £6 billion that could be redirected towards other priorities. Less than 1% of taxpayers will be affected by the taper of £40,000 that was introduced, and more than 95% of those approaching pension age will not be affected by the lifetime allowance.

Banks: Fraud Prevention

Lord Davies of Oldham Excerpts

Monday 20th May 2019 Lords Chamber

[Lord Young of Cookham]

The voluntary code that comes into effect next week will in fact extend to all banks the facility to which the noble Baroness just referred, which has been undertaken by the TSB. As from next week, as long as you have done everything that you should and it was not your fault, you will get your money back. Vulnerable victims will get their money back even if they have not exercised due care. I welcome this not just because it gives added protection to customers, but because it means that the banks will have to pick up the bill, which will add to their incentive to reduce, so far as possible, incidents of fraud.

The noble Baroness then referred to confirmation of payee. She is quite right: at the moment, an electronic payment is processed on the basis of the sort code and the account number. As from later this year, banks will have confirmation of payee—in other words, they will check the name. That means that it will be difficult for fraudsters to intercept funds designed, for example, for solicitors on conveyancing, and misdirect them.

[Lord Davies of Oldham (Lab)]

My Lords, the country is well aware of the extent to which scams and frauds have been successful in recent years, and it is an acute problem. I accept that the Government and the banks have made some progress with the voluntary code, but will the Minister undertake that, if that does not provide satisfactory protection for our people, the Government will legislate to ensure that victims get repaid?

[Lord Young of Cookham]

It is exactly because the Government were not satisfied with the progress being made that the former Home Secretary asked HMRC to inspect the police response to fraud. It responded on 2 April with 16 recommendations that the Government, together with banks and the police, are in the process of implementing. There is a range of recommendations, including a more co-ordinated national response and more support for the customer. Action Fraud is also introducing a more responsive service so that, if you report a fraud, you will get feedback from the banks; that was not necessarily the case before. I am not sure whether we need more legislation; we need to see how the initiatives I referred to work through.

Spending Review: Intergenerational Fairness and Well-being

Lord Davies of Oldham Excerpts

Monday 20th May 2019 Lords Chamber

[Lord Young of Cookham]

Steps were taken last year to raise the threshold at which debt starts to be repaid. However, as I said in my original reply, one of the report’s recommendations is to take this issue into account in the spending review. However, we have seen a huge reduction in unemployment among young people, with the rate among 16 to 24 year-olds having halved since 2010, which is a good record.

[Lord Davies of Oldham (Lab)]

My Lords, the Minister is being somewhat complacent in his answers to the third Question of the day. He must be aware that a large number of young people feel outrage because the scales are tilted against them not just on university fees but on the kind of jobs that he has just identified, which are often in the gig economy, where young people are exploited rather than rewarded. Does he appreciate that a great deal of the anger in our communities is being generated by this Government having presided over an economy in which, in the past decade, ordinary wage earners have had absolutely minuscule increases while the bosses of the FTSE industries have been coining fortunes?

[Lord Young of Cookham]

I am not sure that that is an intergenerational issue; rather, it is about income levels between different groups in the population. Perhaps I may put this into context. This Government have legislated to raise the retirement age, which has begun to tilt the terms of trade between the older and younger generations. Over the past 10 years, interest rates have been at a record low, which has tended to disadvantage those who have retired and may have savings, while tending to help younger people with mortgages. That is not wholly reflected in the report before us. As regards exploiting young people, in December we introduced the Good Work Plan to protect agency workers and give more rights to people on short-term contracts. Moreover, I have just received some in-flight refuelling: university fees—30 years to pay off and a new threshold of £25,000.

Making Tax Digital for VAT (Economic Affairs Committee Report)

Lord Davies of Oldham Excerpts

Monday 29th April 2019 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I welcome the noble Lord, Lord Young. He has a somewhat challenging baptism in replying to this first debate in his new position. We all know his competence and that he always wins considerable support from the House for how he presents his arguments. However, I can scarcely recall another debate in which every contributor has identified issues that the Government have palpably failed to respond to. Nor are these minor pettifogging details; they are fundamental questions about how a government department should operate, and how a response to a committee report should be presented. The noble Lord has a great challenge before him.

I do not need to stress again the points made in this debate because we all have, strongly at the front of our minds, key issues on which we expect the Minister to make a response. The only figure I would like to bring to your Lordships’ attention—I do not know whether the Minister will bring this in as part of his defence—is that HMRC has 15,000 fewer civil servants than in 2010. Of course, we can all see ways in which government departments can work more efficiently and we all know the advantages of new technologies and so on, but a large part of that loss of people was a straight reflection of a determination to create a smaller state, with lower costs for the Government. These circumstances are part of the price that we are paying.

If there is one thing which stands out in this whole sorry saga, it is that HMRC persisted with conduct which was already causing enormous consternation not to people who were adept at tax evasion or those who employed professionals to look after their tax affairs, but to ordinary citizens applying for jobs. The report makes that clear. Their employers, or the agents working for those employers, took them on board and indicated a loan would be advantageous form of payment for their employment. That is why we have so many people who deserve the sympathy of every one of us in this House and all of us concerned with government. Ordinary people now find themselves facing charges which are not the kind of thing that might be easily disposed of by the better-off in society, but multiples of their actual earning power each year; these are now demanded as owed tax. This is a parlous position. What has been identified in this debate is just how dismissive the Government have been thus far on the issue.

[Lord Forsyth of Drumlean]

Of course, the noble Lord is quite right about the substantial cuts in the resources available to HMRC. That has undoubtedly been a factor in its ability to deal with inquiries and to deal with people sensitively. However, it is not to blame for implementing the loan charge, which was passed by Parliament—by the House of Commons. Dealing with this requires a change in the law. Do the Opposition support that?

[Lord Davies of Oldham]

The answer is categorically yes. In fact, I was going to develop that argument briefly but I do not need to now: in his opening speech, the noble Lord made the main charge against the Government and their response to the report thus far quite clear. I utterly endorse that position. I am very grateful for the speech he made today and the way in which he obviously led the committee to produce these high-quality reports.

One of the things which stands out in the reports is that the Government found a whole series of the recommendations quite unacceptable. Of the recommendations in the digital taxation for VAT report, eight were accepted, seven were accepted in part and only six were rejected outright. However, the majority of the recommendations in the other report were rejected. The Government ought to have a pretty strong case when responding on this matter to a significant body such as a House of Lords committee led by the noble Lord, Lord Forsyth, but it seems fairly obvious that the Minister has somehow been shielded behind the perspective that only the House of Commons has any authority with regard to the economy. We all know the law—we all know why the House of Commons produces its Finance Act and we in the House of Lords defer to it as presented—but that is a little different from a committee examining the conduct of a government department. From what I can see, on the whole, Ministers have not been prepared to attend the committee and have been rather dismissive of many of its hugely significant recommendations.

Expressions have been made during the debate with which I have the greatest sympathy. I am not talking about the speeches from the noble Lord, Lord Kerr, and the noble and learned Lord, Lord Judge, who were both quite definitive in what they had to say—I of course agreed with the judgments they reached—but there were other comments that strengthened my support for the committee. The noble Lord, Lord Tugendhat, indicated the difference between how this part of taxation is dealt with and how welfare support is often dealt with. This is a tragedy that has gone on for a number of years, but so has welfare legislation and the great problems with universal credit, in which people who are devoid of resources are being asked to wait for weeks to get the money to which they are entitled. I was very grateful to him for bringing our attention to that.

The noble Baroness, Lady Noakes, criticised the use of the word “customer”. I too found it difficult when the railway companies started to refer to us as customers—they were not very confident that we would become “passengers” and go anywhere, but we were “customers” because we had paid for the ticket. There is a lot that we ought to seek to correct, through gentle persuasion, about the terms in which big organisations and businesses address us.

Two issues about the Government’s estimation come out strongly in the report. We can see that the Revenue and the Government are motivated by the fact that there could be considerable increases in resources through Making Tax Digital. The Opposition understand the argument for Making Tax Digital and endorse it, but it has to be introduced and developed in a better way, as the reports have identified. Those in this unfortunate position with the loan charge have earned salaries and tax is payable on them. There obviously has to be care about how people are challenged to make these payments, because many have limited resources, but there is no doubt that HMRC’s objective was to ensure that tax was legitimately paid on payments allocated to workers. The 2017 court case made this absolutely clear. Therefore we are not in any way, shape or form castigating HMRC for pursuing the issue in principle; we are concerned about the practice.

It has been quite clear from this debate that the committee has identified the department’s position with great force and accuracy. We expect Ministers to take note. We all have faith. I greatly regret the loss of the noble Lord, Lord Bates, the immediate predecessor to the noble Lord, Lord Young. Although I clashed with the noble Lord, Lord Bates, on very many occasions, I never had the slightest doubt about his genuine attempt to present his case accurately, effectively and with the greatest concern for the rights of the House. I am not so sure that Financial Secretaries in the other place have shown much respect for this body, but I am sure that the noble Lord, Lord Young, will seek to answer the very real questions asked in this debate, and treat the committee and its excellent reports with the respect due to it.

Taxation: Digital Publications

Lord Davies of Oldham Excerpts

Thursday 6th December 2018 Lords Chamber

[Lord Young of Cookham]

The Chancellor always welcomes suggestions for raising money in tax, rather than the representations which he normally gets to spend more. It is indeed the case that we plan to introduce the digital services tax in April 2020. It is designed to bring in £1.5 billion over the next four years and is targeted on the multinational companies operating in the digital sphere, to ensure that they pay appropriate tax on the value they derive from UK business. It is seen as an interim solution until we move to a global solution, and the UK is taking the lead in the OECD and G20 to secure that. I certainly note my noble friend’s suggestion that we should move ahead with it before 2020, and if we did that, there might be the resources to pay the sum of money that we might lose from zero-rating e-publications.

[Lord Davies of Oldham (Lab)]

My Lords, we expected a rather more positive response from the Government. My party made clear two years ago that it was not prepared to see VAT in any shape or form increased on cultural goods. This should be recognised as a very important dimension, particularly for the special groups of people referred to already. Could he move with some degree of urgency as far as the Chancellor is concerned? The position is now quite clear in Europe and it would look remiss if Britain were to stand out in this respect.

[Lord Young of Cookham]

I detect a certain degree of unanimity in the representations made so far. As I said, I have some sympathy with the argument that we should now equalise the tax on e-publications and conventional publications. We have had that freedom for only two days, so I hope the noble Lord will understand that we have not acted so far. However, meetings are under way with interested parties to develop the case. As I said earlier, if the Chancellor is convinced that a substantial case has been made, I am sure he will respond favourably.

Economy: Personal Savings

Lord Davies of Oldham Excerpts

Thursday 12th July 2018 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, first, I extend my congratulations to the noble Lord, Lord Lilley, on his maiden speech. The noble Baroness, Lady Altmann, reflected on the fact that we will benefit from his contributions in the years to come. However, with the present level of national debate on Brexit, I imagine that we will be hearing from the noble Lord in our debates in the slightly shorter term.

Secondly, I congratulate the noble Lord, Lord Leigh, on introducing this debate—not only because the topic is of such significance but because of the extensive way in which he covered some very real issues relating to savings that need to be faced by the Government. He is slightly more bullish on the economy than I will be when I make my general comments, but I agree with him entirely that people’s propensity to save relates very much to their earning power and their level of security with regard to the economy. Therefore, the Government’s first task is to do better than they have in recent years.

The noble Lord emphasised that there were some advantages from the development of workplace pensions. We all recognise that and welcome it on this side of the House. However, our anxiety, which has been clearly expressed in the debate—the noble Baroness, Lady Altmann, referred to it—is that workplace pensions might detract from people’s approach to saving in other respects, yet that depends on two things. One is the nature of employers’ schemes. Those vary a great deal and it would be a mistake if we attributed to the pension schemes that are evolving the features of the best examples of those provided in the past, often by companies with extensive resources which could and did afford to look after their workers’ pensions, having been much more generous than is likely to be the case at present.

The second is the number of people in employment. We all know that the Government constantly boast that employment is at a high level, and it is true that a high level of people have a full-time or part-time job that provides resources for them. However, many who are in the gig economy are employed and therefore come up on the bright side of the Government’s employment ledger but, when it comes to the employer’s contribution or even the worker’s ability to save, the earnings level that they are operating at in many instances—we have seen how even substantial employers treat people in the gig economy and those in part-time work, easily reducing their hours at will—means that a substantial section of our population cannot be expected to benefit from the new proposals for the development of pensions.

We welcome the substantial increase in the number of those who have taken up these schemes, as they will play an important part in the future, but the anxiety is that they might direct resources away from other schemes with greater advantages. The noble Lord, Lord Palmer, indicated that an awful lot of the saving that currently goes on in our society is negative saving—that is, the returns are lower than the rate of inflation—and that encouraging people to save is encouraging them to reduce their overall assets. Therefore, we must be very concerned about the rate of inflation but we also need to recognise that people are currently extremely wary of saving because of the persistence of low interest rates, which means that they do not expect to get significant returns from many of the offers to save. Of course, we in the Opposition support the measures that enable people to save for the future and the genuine incentives to encourage saving, but we need to ensure that people pay due regard to the fact that there will come a time in life when the costs are high and earnings are very low, and that it will be necessary to have adequate resources.

I have much appreciated the contributions from noble Lords, particularly the extent to which the right reverend Prelate, the noble Lord, Lord Lilley, and others emphasised that we need to prioritise financial education and understanding. Far too many people in our society are still largely ignorant of the financial situation they face. People get into debt because they pursue potentially the worst route for borrowing. That happens through ignorance and through the desperation of approaching debt, but it is also due to a lack of knowledge of how adequately to resolve that debt. I appreciated the number of speakers who emphasised that.

I also recognised what the right reverend Prelate said when he referred to the fact that an obvious form of saving is buying a property, and he spoke about the development of home ownership through mortgages. We all accept that in the past such assets were more easily achieved, but these days a substantial number of our younger population have no chance at all of reaching the level of savings necessary to undertake a mortgage against the house prices they are confronted with. We have a rent generation and we need to think about the support that that generation will need when they do not have the obvious support that comes with buying a house with a mortgage, as the right reverend Prelate emphasised.

The Chancellor has sought to emphasise that he wants to increase the level of saving. However, we are worried about the extent to which certain initiatives, particularly the lifetime ISA, which has been referred to by several noble Lords, will be a deterrent to individuals pursuing better strategies in the long term. ISAs have an element of glamour about them but that glamour can be appreciated only by people who are already reasonably resourceful and in a position to take them up. We recognise, however, the incentives that support them.

The lifetime ISA and the Help to Save scheme have shown that the Government are concerned about the long-term position of people in our society, but I am not so sure we are all convinced that there is a level of fairness attached to these provisions. We see a lack of government measures to address the problems faced by those on much lower incomes than those to whom ISAs are addressed. We understand that the Government have recognised that people have great difficulty saving when they are getting help from universal credit. Given the enormous difficulties the Government have had in rolling out their universal credit proposals, it is not surprising that people’s confidence has been shaken, along with their ability and proclivity to save.

Quite a significant percentage of our population are in work and yet still have recourse to use foodbanks. I note that the Government purported to recognise that with regard to the health service, when they were shocked to discover that nurses had such low pay that they were going to foodbanks. But it is more extensive than nurses, and it is an indication that this debate is about not just the improvement of savings but fairness. We need to be fair to those who have the greatest need in our society and who have to manage budgets in such extreme circumstances that they have very little excess to address to savings.

We in the Labour Party are particularly concerned about levels of credit and credit cards. It has now reached proportions where the Government ought to act and, if they do not, the next Labour Government certainly will. We think there should be a cap on the charges that credit cards attract, because we are all too well aware that many people can get into real difficulty using them. It seems obvious that it is necessary for some limitations on this. The Government have seen the extensive growth of credit card usage and know the significant number of people who have regular debts that they are just not, at any time, paying off, and therefore that debt is increasing. The Government need to act in these areas.

Part of the problem for people trying to save is that they face great difficulties in this economy. There is an indication that, this year and next, there may be some improvement in wage growth. It follows seven years of Governments, led by the Conservative Party, under whom wages have not risen at all. That is a phenomenon that we have not seen for very many years. I have in the past suggested that it goes back to Napoleonic times—it certainly goes a long way back. We must recognise that people’s confidence is bound to be shaken in circumstances where their incomes do not improve.

It would be churlish if we did not recognise the extent to which the Chancellor is seeking to address savings overall, and we give credit to the attempts to put forward initiatives. However, we share with many others reservations about the strategies being pursued, as have been identified in this debate. In fact, I tore up a third of my speech after the noble Baroness, Lady Altmann, made such detailed challenges to the Minister. In replying to the debate, he will have to spend all his time dealing with the points that she alone made. Other points have been made by other noble Lords, however, and I know the Minister will address them.

This has been an interesting and constructive debate. It is an indication of a fundamental problem in our society. We are talking about the long-term necessity of savings against a background in which the present position of the economy, and the predictions of where we will be in the next five years, are such that it will be a very difficult case for the Government to convince people that the future is sufficiently secure for them to take steps towards significant savings.