Finance Bill

Viscount Chandos Excerpts

2nd reading & Committee negatived & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Friday 17th July 2020 Lords Chamber

[Viscount Chandos (Lab) [V]]

My Lords, never can economic conditions have changed so much in the time between the publication of a Finance Bill and its consideration by your Lordships’ House. As the Minister has outlined, the Chancellor has, quite rightly, announced a wide range of emergency measures in response to the Covid crisis—even if, in many cases, they fall short of what these Benches would wish to see.

In macroeconomic terms, it was indeed a Budget and hence a Finance Bill from a different era, as my noble friend Lord Livermore described it in his forensic remarks from the Front Bench. But the Chancellor, basking in the current personal popularity that must cause such anxiety to his neighbour—no wonder the Prime Minister’s senior adviser is an advocate of Andy Grove’s dictum “only the paranoid survive”—has shown himself reluctant to move on fully. Yesterday, the Institute for Fiscal Studies published an analysis of the Chancellor’s recent £30 billion package, suggesting that a third of this supposed new spending is actually recycled or reallocated spending already announced in the Budget or otherwise. This

“makes scrutiny of plans more difficult and is corrosive to trust”,

commented the IFS dryly. More importantly, it means that support for the economy and employment is falling even further short of what is needed.

“The Finance Bill is a series of tweaks and corrections”,—[Official Report, Commons, 2/7/20; col. 625.]


said my honourable friend the shadow Chief Financial Secretary in another place, rather than implementing the vision necessary to address this devastating economic shock. Even these “tweaks and corrections” are under- whelming. Although the proposed delay to IR35 reform is welcome, the powerful report by the Economic Affairs Finance Bill Sub-Committee highlights the extent to which the Government are as much at sea in micro as in macro waters.

The Office of Tax Simplification reported on inheritance tax in two stages, between November 2018 and July 2019, with 11 recommendations. Could the Minister say how many of these have been adopted in the Bill? The Chancellor has just announced a further inquiry by the OTS, into capital gains tax. This prompted speculation that CGT changes would be used to fund some of the necessary public spending measures, which the Treasury quickly denied. O that in fact they might be! The Chancellor

“must change a tax system that was designed before returns to capital (and especially property) greatly outstripped returns to labour”,

wrote not a Marxist economist but the FT columnist Janan Ganesh. Although he was writing in 2015 about George Osborne, of whom he was the biographer, his analysis is even more valid today than it was then.