Economy: The Growth Plan 2022
Debate between Lord Tunnicliffe and Lord Callanan(2 years ago)
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Lord Callanan (Con)
This goes back to the point I made to the noble Lord, Lord Vaux, earlier: we will indeed be debating these matters further when the legislation arrives. It is a complicated subject. There are two types of renewables certificate. The earlier renewables obligations were given before 2015, and it can be said that some of those operators are indeed making considerable profits. They are perhaps the ones that the noble Lord is talking about. Then there are those that have been on the contracts for difference scheme since 2015, which are now, I am pleased to say, paying back into the system, such is the success of the CfD regime. But, as I said, we will be debating that when the legislation comes to this House.
Lord Tunnicliffe (Lab)
The Minister has admitted that this is an extremely complex subject. I wonder whether he would consider acceding to the request from the noble Lord, Lord Vaux, and arranging more of a seminar-type event before Second Reading so that we can probe into the understanding—that is, not to make political points but to understand the technicalities we face.
Lord Callanan (Con)
I will certainly look at doing that but, as I said, we are preparing for the legislation. There is furious drafting going on at the moment. It will be in the House shortly. I think noble Lords will find that it addresses some of the points they are raising, but I would be happy to look at holding a seminar as well if they would find that helpful.
Once again I can only agree, as I normally do, with my noble friend Lord Forsyth’s words; what a great Budget Statement it was. He rightly noted, for instance, that investment comes from retained profits after tax. The noble Lord, Lord Bilimoria, for his part, agreed that it is absolutely right to target growth. My noble friend Lord Lamont said that going for growth is a laudable objective. My noble friend Lord Lilley said simply that growth is crucial. All were correct. I cannot agree with everything that the noble Baroness, Lady Wheatcroft, said—I do not normally agree with her very much—but she was right to say that, on growth, the problem has been about delivering.
My noble friend Lord Frost observed that the Government’s opponents think that the right way forward is more of the same, while our belief is that we have to do things differently. The measures in the growth plan represent an ambitious first step towards getting to the 2.5% target through removing barriers to the flow of private capital, supporting skilled employment, accelerating infrastructure construction, getting the housing market moving and cutting red tape for businesses. Historical experience suggests that 2.5% GDP growth is ambitious but achievable given the growth that the UK has observed in the past.
Independent economic forecasters have estimated that the energy package could reduce the headline rate of inflation by around 5% by freezing energy bills. As always, the Chancellor is of course working closely with the Governor of the Bank of England to tackle inflation and closely co-ordinate support for the economy. While more government borrowing is required in the short term to tackle high energy prices, the Chancellor is committed to seeing government debt fall over the medium term. The independence of the Bank of England is sacrosanct and the Government have reconfirmed their commitment to the monetary policy remit. The Government have full confidence in the Bank of England to take action to get inflation back to target.
The right reverend Prelate the Bishop of Durham and the noble Baroness, Lady Brinton, used the phrase “trickle-down economics” as if it is somehow official government policy. I am afraid that, as my noble friend Lord Hannan said, this phrase is a fantasy of extremely fertile left-wing imagination. We have no such policy, as my noble friend Lord Bethell said. No Minister has ever used that phrase. I cannot be clearer: it is fantasy.
The noble Baronesses, Lady Smith of Basildon, Lady Bowles of Berkhamsted and Lady Fox of Buckley, discussed the perceived market reaction to the Government’s decisions. Of course I cannot get into commenting on specific financial market movements. They are determined by a wide range of international and domestic factors. We recognise that there has been some market volatility, which is to be expected as financial markets adjust to policy decisions. The Government do not have a preferred price or yield for assets in financial markets; the price is set by that market. I note, however, my noble friend Lord Lilley’s astute observation that sterling has recovered against the US dollar.
On corporation tax—again, this was mentioned by the noble Baroness, Lady Smith of Basildon—the Government have prioritised cancelling the corporation tax rise and announcing the permanent level of the annual investment allowance to support businesses and increase the productive capacity of the economy. Importantly, the decision on corporation tax is not a cut: it is not proceeding with a previously announced increase.
Meanwhile, the income tax rate cut is being brought forward to April 2023 instead of 2024. This is the first cut to the basic rate in 15 years, supporting over 30 million taxpayers to keep more of their own income. Taxpayers in England, Wales and Northern Ireland will all gain around £170 on average.
The noble Baroness, Lady Walmsley, made the point that freezing the personal allowance is bad for low-income households.
European Union (Withdrawal Agreement) Bill
Debate between Lord Tunnicliffe and Lord CallananWednesday 15th January 2020
(4 years, 9 months ago)
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Lord Tunnicliffe (Lab)
My Lords, Clauses 27(2)(c) and 27(6) of the Bill amend Section 8 of the European Union (Withdrawal) Act 2018 to expand the definition of deficiencies in retained EU law and to include deficiencies arising from the end of the implementation period. In its interim report on the first version of the WAB, your Lordships’ House’s Constitution Committee expressed concern that the power to expand the definition of deficiency was “vague” and could insert “potentially important new categories” without any real justification.
During the passage of the 2018 Act, we were repeatedly assured that there was nothing to worry about in relation to these powers, as they would cease to operate on exit day. However, we are now told that the power needs to be extended to address deficiencies arising from the implementation period. Given that we had an estimate of the total number of SIs to be made under the 2018 Act, can the Minister provide an estimate of how many would arise as a result of extending this power?
The Hansard Society and others very helpfully tracked the Government’s use of Section 8 powers during the withdrawal negotiations and the results were not promising, with many SIs tabled late in the process and some even having to be withdrawn and retabled as they contained their very own deficiencies. In the light of the Government’s record, is the proposed extension of the Section 8 powers simply a case of Ministers trying to buy more time for work that should have been done already? What guarantee is there that extending the Section 8 powers will not occur every other year?
The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)
My Lords, I thank the noble Baronesses, Lady Ludford and Lady Hayter, for their amendments and the noble Lord for his contribution to the debate. I also express my thanks to the Constitution Committee for providing what was an extremely thorough analysis of this Bill. I hope my response will provide reassurance to noble Lords about the purpose of these clauses; if the House will forgive me, I will go into quite a bit of detail on this.
As noble Lords will know, the European Union (Withdrawal) Act 2018 was drafted without prejudice to the outcome of our negotiations with the EU. However, now that we have agreed a withdrawal agreement together with the implementation period, as the noble Baroness, Lady Ludford, observed, it is necessary to update that Act to ensure that it can still fulfil its intended purpose in light of the new circumstances.
The subsections to which the noble Baronesses have tabled their amendments are there to ensure that the power can continue to meet the broader goal, which was much discussed during our debates on the 2018 Act, if noble Lords remember, and on which there is a widespread measure of agreement across the House. It is simply to ensure that the law continues to operate correctly, as it was passed at the time. To provide the noble Baroness, Lady Ludford, with a specific example of the kind of thing to which we are referring, we will need to replace the previous deficiencies in the statutory instrument on telecoms, which will no longer work because EU-derived domestic legislation will have been amended during the implementation period to implement the new EU regulatory framework for electronic communications. That will be changed during the implementation period and we may well have to go back to the previous fix in order to update it and provide a functioning statute book at the end of the implementation period. That is why we need to extend that power.
Moving on to the specifics of Amendment 24, EU law will of course generally continue to apply in the UK during the implementation period. This Bill takes the approach of providing what are known as glosses for EU-derived domestic legislation, to clarify the way in which EU-related terms should be read so that our laws will continue to work during this period. Obviously, as a non-lawyer, the only “gloss” that I am familiar with is gloss paint, but for the benefit of the House, glossing is a technical device used to direct readers of the law to interpret specific phrases without textually amending the original provisions. Apparently, it is a fairly standard legal clause. When retained EU law is created at the end of the implementation period, the EU-derived domestic legislation will be the glossed version of that law. Subsection 2(c) ensures that the powers in Section 8 of the European Union (Withdrawal) Act 2018 can be used to fix ambiguities which may arise as a result of the approach that we have taken to the saving and exceptions of retained EU law, such as the application of the glosses set out in Clause 2 of the Bill. In our view, it is right and appropriate that the Section 8 power is made available for this particular purpose.
Lord Tunnicliffe
Could the Minister answer my question and assure us that there will be no further extension of the powers in Section 8?