Tax Havens
Debate between Lord Young of Cookham and Baroness Kramer(7 years, 7 months ago)
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Lord Young of Cookham
The initiatives we are taking on tax evasion are independent of our membership of the EU, although we are pursuing some EU directives. As I said, this country is in the lead. I do not know whether my noble friend has seen page 9 of today’s Times, which says that:
“Oligarchs must disclose identity as home owners”,
with a register. That is a world first: the people behind anonymous companies that own billions of pounds-worth of property must reveal their identities under new anti-corruption rules. This shows that the country takes the matter very seriously.
Baroness Kramer (LD)
My Lords, in arguing that they will not use the powers they have to require the overseas territories to make registers of beneficial ownership public, the Government say that they expect the overseas territories to do so when that becomes the international standard. Will the Minister tell me the timeframe within which he expects public registers to become the international standard—and will it be within my lifetime?
Lord Young of Cookham
The noble Baroness looks younger every day, and so I will not go there.
Class 4 National Insurance Contributions
Debate between Lord Young of Cookham and Baroness Kramer(7 years, 8 months ago)
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Baroness Kramer (LD)
My Lords, what a climbdown. And what a spat between No. 10 and No. 11. The Chancellor has always had a tin ear, but did the Prime Minister not recognise that the NICs change was, in effect, a tax increase on the plumber, white van man, the entrepreneur and women working from home because of children—people who are typically “just about managing” and whose income fluctuates, is low and is often unreliable?
Yesterday, in the Budget debate, the noble Lord, Lord Willetts, spoke of the now discarded NICs change as a way to combat companies that, to benefit from tax arbitrage, push people out of employment into less certain self-employment. I suggest, as I did then, that if the NICs changes had been focused on those companies seeking that tax arbitrage, rather than on the self-employed—manifesto pledge or no manifesto pledge—the response would have been very different. Were the Tory Government following their usual pattern of protecting big companies and big business and hitting the little people?
It is crucial, as I think everyone in this House would agree, that the increase of £2 billion for social care remains, inadequate though it is, being spread over three years. How will the Government fill the gap in the public finances when the Chancellor is so constrained by expected blows from hard Brexit? Can the Minister give us today a guarantee that it will not be filled by more severe spending cuts parts of the public sector already under extraordinary pressure? Do the Government agree that the whole Victorian structure of business and employment taxes needs re-examining? The former BIS Secretary, Sir Vince Cable, is chairing such a review for the Liberal Democrats. Will this Government, among their many reviews, take on frankly a review of similar scope, because it is vital?
When spreadsheet Phil decides to shoot from the hip, we surely have a Government puffed up in hubris. I am afraid that this exactly reflects the arrogance that led the Government to hard Brexit. If they have a tin ear over their own self-employed, how bad is the tin ear that they will take into EU negotiations?
Lord Young of Cookham
My Lords, I say to the noble Lord, Lord Davies, that we are reluctant to take advice from the Labour Party on promoting harmony between No. 10 and next door. He will recall that Budget measures introduced by the Labour Government subsequently had to be revised. For the Liberal Democrats, the noble Baroness was cautious enough not to mention manifesto commitments—there are certain issues from her party that would be brought to mind.
We have made it absolutely clear that we will make good the fiscal impact of this decision in the Autumn Statement. We are not minded to borrow more, which has sometimes been suggested. However, in response to the serious issue raised by both the noble Lord and the noble Baroness, I can give a firm assurance that all the spending commitments made in the Budget will be honoured—on skills, on adult social care and on accident and emergency. We stand by those commitments.
The noble Lord asked about universal credit. There will be no change to the entitlement to universal credit by the self-employed. On the broader issues about the Taylor review, there is an issue here—and the Labour Party has recognised it as an issue; it has a commission looking at the issue. I do not think that it would be right to do what the noble Lord suggested, which is to ditch the Taylor review. It is important that we go ahead with it, but we have ruled out certain responses in how we take it forward. But there is an issue here—a threat to the tax base that we need to address.
The Autumn Budget will make good the deficit, in the normal way, so the hole will be filled, and the Chancellor remains committed to sound finance, reducing the deficit and investing in infrastructure and key public services. Those commitments remain as before.
Royal Bank of Scotland: Small Businesses
Debate between Lord Young of Cookham and Baroness Kramer
Lord Young of Cookham
The report to which the noble Viscount refers is indeed a worrying one for RBS. While the review did not find evidence to support the most serious allegations made against the bank, it is critical of some of its actions—for example, the failure to support SMEs in a manner consistent with good turnaround practice and, to pick up on a point made by the noble Viscount, the failure to handle conflicts of interest inherent in the West Register model and operation.
As for the compensation scheme, small businesses that came within the global restructuring group between 2008 and 2013 are eligible for compensation under the scheme. Complex fees will be repaid automatically and then, if people make complaints and are not happy with RBS’s response, they can appeal to the independent third party announced yesterday.
The FCA has a responsibility towards customers and businesses. It has been involved in the construction of the complaints system and has taken into account representations made on behalf of customers. However, it is continuing to consider whether further action is needed, and I know that it will take on board the points that the noble Viscount has just made.
Baroness Kramer (LD)
My Lords, surely the Government could join with others in this House, including the noble Viscount, Lord Hanworth, in saying that those who were abused by this scheme should be fully compensated and that there should be a repayment not just of fees but for the damage done in businesses lost and far beyond that. That is a much bigger figure, which the FCA does not seem to have recognised in its report at this stage.
Would the Minister also back the whistleblowers? A number of RBS staff blew the whistle on the practices taking place. Virtually every one of them has found that their careers have ended; they have suffered extensively as individuals but, as far as I can tell from looking at the FCA report, not a word is said. We need whistleblowers and we need to treasure them.
Lord Young of Cookham
I endorse what the noble Baroness has just said about whistleblowers who put their careers at risk in order to bring malpractice into the public domain. It is not just the fees that are going to be compensated; direct losses will also be eligible for compensation, as will consequential losses where these are directly attributable to the actions of RBS. Established legal principles will be used to determine whether a consequential loss is factually and legally attributable to it. So it is not just the fees; it is direct losses as a result.
Brexit: Economic Impact
Debate between Lord Young of Cookham and Baroness Kramer
Lord Young of Cookham
I had hoped to get through this exchange without saying the Government do not provide a running commentary on negotiations. However, the noble Lord has not just asked for a running commentary but asked me to predict the result. The answer is no, I cannot give any of those commitments, apart from the one he asked about at the end. We will of course use our best endeavours to secure access for goods and services from the UK into the European Union.
Baroness Kramer (LD)
My Lords, in the 2015 Budget, the Government froze in cash terms most working-age tax credits and benefits. With the rise in inflation that has occurred so far, as reported today, and the very significant rise that is anticipated thanks to the collapse in sterling, will the Government be unfreezing them, so that benefits can increase on the basis of inflation, or are the low-paid to be the first victims of the Brexit decision?
Lord Young of Cookham
I understand the concern that the noble Baroness has expressed about the impact of inflation of those on low incomes, but she would not expect me to say anything that might anticipate what is in the Autumn Statement.
High-Cost Credit and Debt Management
Debate between Lord Young of Cookham and Baroness Kramer
Lord Young of Cookham
I pay tribute to the initiative taken by the most reverend Primate in his setting up of LifeSavers, a joint project by the Church and credit unions which the Government helped to finance. That is helping children develop good financial habits at a young age by setting up saving clubs in primary schools, in partnership with credit unions. I also welcome the initiative of the Church of England in establishing the Just Finance Foundation to develop and implement the most reverend Primate’s vision of creating a fairer and more just financial system. Of course I will take on board the suggestions he made in his question.
Baroness Kramer (LD)
My Lords, do the Government agree that part of the problem is that we have so many different regulators involved with different products—whether it is the Information Commissioner, trading standards or the FCA—that there is complete chaos and no one quite knows where they are protected with which product or who to contact when there is a problem? Is the Minister indicating that in the legislation the Government will bring forward, there will be one responsible individual across the board to co-ordinate that, or is the role he proposes for the Information Commissioner a very narrow one?
Lord Young of Cookham
Of course, the Information Commissioner covers a wide variety of cold callers, whereas this Question is about high-cost credit and debt management solutions. The FCA is currently going through a process of authorising debt management firms and high-cost credit companies, and if they do not meet the high standards of the FCA, they simply will not be allowed to go on carrying out their business. It is not a complete shambles, which I think was what the noble Baroness said. We transferred responsibility from the OFT to the FCA simply because it has a more robust regime for dealing with any misuse of cold calling.
Tax Credits: Concentrix
Debate between Lord Young of Cookham and Baroness Kramer(8 years, 2 months ago)
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Lord Young of Cookham
I am grateful to the noble Lord for his comments. I begin by apologising to all those who have been distressed by an unacceptable level of service, to which the noble Lord referred. I know from my experience in another place how distressing it can be if families who are, by definition, on low incomes, suddenly find that a flow of income is stopped. Referring to the action now being taken, a priority is to deal with those cases where payments have been stopped. As I said, HMRC has now seconded another 150 staff to tackle the backlog of cases, to see whether we can get them up to date. As for the future, the contract will not be retendered. At the moment, the bulk of the work is being done by HMRC and, as from next May, it will do all the work. Looking ahead, over the next six or seven years, those on tax credits will move over to universal credit, and that system will incorporate the lessons we have learned running the procedures under tax credits.
Baroness Kramer (LD)
My Lords, I listened to the discussion of this Urgent Question in the other place and it is evident that, month after month, Members from across the House have been bringing their complaints not just to Concentrix but to HMRC and Ministers and have essentially been ignored until the BBC got involved in the process. Does the Minister agree that this is a good indication that for tax credits and other complex issues, we need a review of whether outsourcing is appropriate? I refer him to the comments of the right honourable Member for Chingford and Wood Green, who has asked Questions about this. Also, where contracts are outsourced, not only must there be proper training and resourcing for HMRC or the department supposedly managing it, it must understand that active, not passive management is necessary.
Lord Young of Cookham
I am grateful to the noble Baroness for her comment. As I said, this contract was outsourced in 2014, when there was a coalition, and I would not rule out all outsourcing by government departments as a matter of principle. As for this particular case, as I have just made clear, it will not be outsourced in future; the work will be taken in-house. As we develop the new process of migrating from tax credits to universal credit, we will learn the lessons that have become clear in this case.
Bank of England and Financial Services Bill [HL]
Debate between Lord Young of Cookham and Baroness Kramer(8 years, 11 months ago)
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Lord Young of Cookham (Con)
My Lords, I also welcome the progress that my noble friend has made since we discussed this matter on 9 November, when concern was expressed that we had not got the interface between these two independent institutions in the right place. I was delighted to hear that peace has broken out between these two institutions. My noble friend said that the memorandum of understanding would be published in due course. My noble friend Lord Higgins pressed him a little further. Will it be available during the passage of the Bill, which started in this House and will go to another place, because I am sure that it would be of interest? Finally, does one really need proposed new paragraph (d) in Amendment 9 in the memorandum of understanding? If under proposed new paragraph (c) a procedure has been established,
“for resolving in a timely fashion any dispute”,
why does one need paragraph (d), which asks for a procedure where the dispute has not been resolved?
Baroness Kramer
My Lords, I will not detain the House very long. The National Audit Office and the Bank of England are crucial institutions. It is absolutely necessary that both are not only independent but perceived to be independent. In earlier stages of this Bill, we asked that those two organisations should be brought together to come to a common understanding and agreement of how we could go forward. That has been achieved and, with that, we are pleased that “peace has broken out”—to quote what has just been said. It was essential that that should be done and I congratulate the Minister on the role that he played in this.
Bank of England and Financial Services Bill [HL]
Debate between Lord Young of Cookham and Baroness Kramer(9 years ago)
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Lord Young of Cookham (Con)
My Lords, I will make a brief intervention in this debate as a former Treasury Minister and ex officio member of the PAC. As we have heard, Clause 11 sets up a new interface between two public institutions, both of which are independent: on the one hand the Bank of England, independent since 1997, and on the other the Comptroller and Auditor-General, who has been independent for a lot longer. In establishing this new interface, clearly one has to get the balance right.
From the exchange before the Treasury Select Committee last month, it is quite clear that the original drafting caused difficulties for the Bank of England and was amended. If one looks at Mr Roxburgh’s answer to a question posed by Helen Goodman, it is clear that there was an agreement that there had been a change in the drafting because of the reservations of the Bank of England. However, it is quite clear that the clause as now drafted causes difficulties for the other partner, namely the Comptroller and Auditor-General. The briefing note says that it “greatly limits” the Comptroller and Auditor-General’s freedom of action and that it does not provide him with,
“the independence that is essential to accountability”.
If one looks back at the C&AG, there is no history of him looking at policy issues in his investigations. There is of course concern that if the Bank of England is given an exemption of this nature, other institutions subject to audit by the C&AG might seek a similar exemption—the BBC is a possible example. At Second Reading my noble friend who wound up the debate said that the concerns that were ventilated then were,
“well argued and should be taken very seriously”.—[Official Report, 26/10/15; col. 1082.]
Obviously, it is important to avoid a public spat between two important independent institutions. The sensible way forward is for the Minister to promote bilateral discussions between the NAO and the Bank of England to see if they can come up with a memorandum of understanding, which, if necessary, might then be incorporated into the Bill if an amendment is necessary. However, there should be some discussions before Report so that there can be an agreement on the appropriate terms of trade between these two public bodies.
Baroness Kramer
My Lords, I will briefly join in the debate. We have two very highly regarded independent organisations—the Bank of England and the NAO. I say to the Government that it is unfortunate that legislation has come forward without resolving the relationship between the two of them. This House should not be in this position today, and neither should either of those two institutions. I very much hope that the Government will take the advice proffered and bring these various parties together to get a resolution here. Both are key institutions that need to have their independence appropriately protected.
In answer to the question asked by the noble Lord, Lord Higgins, the two lines about which he was concerned a moment ago, which are taken out and replaced by what he read as almost two identical lines, almost get to the crux of this matter. The amendment strengthens that assurance that the NAO and the Comptroller and Auditor-General do not in any way seek to question the merits of policy objectives. It is trying to make that absolutely clear by putting in a stronger statement to that extent. The problem the NAO has, as the noble Lord, Lord McFall, said, is that due to the way in which the language is now drafted, the Bank effectively now has a veto over which studies are undertaken. Frankly, that is, I think, unacceptable to every party.
We in Parliament depend very much on the NAO and the reports it provides to us. It is very important for us to be able to receive that information, knowing that it is impartial and independent, for us to be able to perform the role we play. All the discussions today have talked of the importance of oversight. While we very much respect the Bank of England, we are all incredibly conscious that it has made very serious mistakes in the past which have cost us dear, and that we all need to play a role in interacting and making sure that we understand and are appropriately taking on our responsibilities toward that institution. Frankly, it is very hard to see how we in this House or in the other place can do that without effective reporting from the NAO.
I hope that the Government will take this matter away for reconsideration because these are significant concerns. I take great heart in hearing from the noble Lord, Lord McFall, that the Federal Reserve board in the United States is one of the bodies on this globe that most asserts its independence and integrity. The Federal Reserve accepts a similar kind of oversight from the US Government Accountability Office, and it seems to me that we have a template there. If it works for the Federal Reserve, surely it can work for the Bank of England.
I hope that these amendments will be taken exceedingly seriously. While the noble Lord, Lord Bichard, is not in a position to speak himself, there are many in this House, including the noble Lord, Lord Higgins, and the noble Baroness, Lady Noakes, who will be able to appreciate the importance of the points that he would have made had he had the opportunity.