Economy: Public Finances

Debate between Lord Newby and Lord Lea of Crondall

Tuesday 24th March 2015 Lords Chamber

[Lord Lea of Crondall (Lab)]

My Lords, the noble Lord, Lord Vinson, mentioned exports as if they were doing rather well. I do not think that they were mentioned in the Budget but does the Minister agree that our trade balance is a disaster, as is our productivity, which has not grown at all since 2010? Would not the Government be better served by looking at these fundamental factors in the real economy?

[Lord Newby]

My Lords, last month’s trade figures were the best for 15 years. No doubt the noble Lord would say that that is not good enough. However, we have spent more money more effectively through UKTI in building up our trade with less traditional countries such as China. Further support was given to that in the Budget.

Small Businesses: Finance

Debate between Lord Newby and Lord Lea of Crondall

Wednesday 25th February 2015 Lords Chamber

[Lord Newby]

My Lords, I think that the track record of government departments on paying bills is significantly better than that of the private sector, but we are always keen to improve performance.

[Lord Lea of Crondall (Lab)]

What steps have the Government taken since the Insurance Bill Special Public Bill Committee to make sure that the insurance industry signs up to its own scheme to deal with the late payment of bills? This is a cause of great concern to many of the people who otherwise would use the British insurance industry.

[Lord Newby]

My Lords, as the noble Lord knows, the insurance industry has a payment code and we are encouraging all firms in the industry to abide by it.

Economy

Debate between Lord Newby and Lord Lea of Crondall

Tuesday 28th January 2014 Lords Chamber

[Lord Newby]

My Lords, the Government are very appreciative of the work that the British Chambers of Commerce has done. Of course, the Heseltine review, No Stone Unturned in Pursuit of Growth, made the point that a strengthened British Chambers of Commerce was much to be welcomed. However, the tradition in Germany of chambers of commerce, of which membership is virtually compulsory for organisations, is very different from here. While the Government are encouraging the chambers of commerce to strengthen, it would be misleading to think that one could have a simple write-across from the German example in the foreseeable future.

[Lord Lea of Crondall (Lab)]

My Lords, we all welcome increases in output, but we notice that people are not conscious of a growth in their living standards. Can the Minister remind us how far output as a percentage is still below the peak?

[Lord Newby]

My Lords, the important thing about output is that it is rapidly approaching the previous peak. With every passing set of statistics, we find that output is growing more quickly than we thought. It is interesting to note that the figure today of 1.9% growth in output for the past year is significantly higher than the figure that the ONS thought even in December, when it suggested 1.4%. The message from today's figures is that growth is accelerating quicker than most forecasters thought, and all forward indicators suggest that that trend will continue.

Taxation: Fuel Duty

Debate between Lord Newby and Lord Lea of Crondall

Wednesday 15th January 2014 Lords Chamber

[Lord Newby]

My Lords, it is true that the effect of the VAT increase ate into the benefit but the price is still 10p less than it would have been, even taking the VAT increase into account. I am not sure whether the noble Lord supports that policy but that is a very considerable net increase. As far as domestic energy prices are concerned, the noble Lord knows that his party’s proposed policy is nothing more than a gimmick.

[Lord Lea of Crondall (Lab)]

Arising from the question asked by the noble Lord, Lord Marlesford, about what economists call consumer surplus, is the Minister in agreement with the official data of the ONS that hydrocarbon taxes are the most regressive taxes in the country? In other words, they show that the lowest-paid pay—I think—four times more on petrol, as a percentage of their income, than the top decile. There is therefore a distinct impact on poverty, as was implicit in the original Question.

[Lord Newby]

My Lords, the noble Lord has made a powerful argument for the Government’s policy.

Banking: Lending

Debate between Lord Newby and Lord Lea of Crondall

Tuesday 12th November 2013 Lords Chamber

[Lord Newby]

My Lords, that was clearly a major contributory factor. However, I refer noble Lords to the review undertaken by Sir Andrew Large for RBS, which found that the bank had failed to meet its own lending standards, had risk-averse staff and took longer to process applications than other banks, and that its treatment of customers in financial distress had led to major negative perceptions of the bank. The bank is now, at long last, moving to tackle many of those issues, but the failures in the way that RBS ran its business were a major contributory factor to its failure in recent years to lend to SMEs the amounts it set itself in its target.

[Lord Lea of Crondall (Lab)]

My Lords, does the Minister not accept that his characterisation is grossly inaccurate, and that in the past few years the huge fall in output in the western capitalist economies—I use that term advisedly—was due to the way in which Lehman Brothers and others at that time were able to cause that financial bubble and cause output to fall 10% below trend right across the western world? Simply to say that it was the fault of the Labour Government is ludicrous.

[Lord Newby]

My Lords, I may be mistaken but I do not think that I said it was the fault of the Labour Government.

Sterling: Exchange Rate

Debate between Lord Newby and Lord Lea of Crondall

Tuesday 25th June 2013 Lords Chamber

[Lord Newby]

My Lords, it is a tool of limited use but that does not mean it is of no use at all. Obviously, you cannot have over a prolonged period all countries devaluing or competitive devaluation becomes a race to the bottom. The Governor of the Bank of England and the MPC would argue and have argued that without that devaluation our trade position would have been worse than it has been.

[Lord Lea of Crondall]

My Lords, is not the truth that the price devaluation of sterling can hardly be zero and that saying that price does not matter in export markets would make a nonsense of the whole argument about competitiveness? Would it not be more true to say—here I echo my noble friend Lord Peston—that when it comes to our manufacturing in particular exports, where the ratio of visible trade is 2:5 against us, we must have a policy on both sides? We must be competitive in price, which might require the pound to go down further, on that argument, but we must also give a massive shift of economic priority towards manufacturing as against the financial services industry.

[Lord Newby]

My Lords, the Government have been clear from the start that we want a shift away from financial services towards manufacturing. To a certain extent, that is happening. For example, we had an export surplus in cars last year for the first time in nearly 40 years.

EU: Eurozone Financial Transaction Tax

Debate between Lord Newby and Lord Lea of Crondall

Tuesday 5th March 2013 Lords Chamber

[Lord Newby]

My Lords, the noble Baroness will recall that in 2011 the French Government proposed such a tax at a global level in G20 and there was widespread opposition to it from, among others, the US, China, Australia and Canada. Sadly, there is nowhere near a global consensus on whether such a tax is a good idea, and, equally, there is no consensus, even within the EU, about where the money should go. The French were, and are, keen that at least part of the proceeds should go to development aid, but the Germans, for example, propose that any receipts from the FTT should simply go into the central tax pot.

[Lord Lea of Crondall]

Given the behavioural crisis in many of the financial institutions in recent years, would the Government not be well advised to discuss the merits of such taxation around Europe, rather than reacting like Pavlov’s dog to anything just because it comes from Brussels?

[Lord Newby]

My Lords, we are engaged in discussions on this tax as it could have significant impacts not just on the City but across the EU. While the Government are not opposed in principle to a global FTT, with the lack of consensus on such a thing and faced with a proposal which we think could be damaging not just to the UK but to Europe as a whole, we are rather sceptical about it.