Independent Adviser on Ministers’ Interests

Viscount Chandos Excerpts

Thursday 16th June 2022 Lords Chamber

[Lord True (Con)]

My Lords, I have already said that I am not going into speculative comments on what may or may not have been the subject of a commercially confidential matter under consideration.

[Viscount Chandos (Lab)]

Can the Minister name one other role, in public life or any other area, where the ultimate decision as to continuing in that role is left to the person in that position?

[Lord True (Con)]

My Lords, the decision on whether the Prime Minister continues in office will rest with the British people when the time comes.

Budget Statement

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Friday 12th March 2021 Lords Chamber

[Viscount Chandos (Lab) [V]]

My Lords, speaking as a non-Marxist member of the Labour Party, I think that this much leaked Budget is a case study for the long-established rule that the better the immediate reception, the worse it proves to be once more measured analysis has taken place. The noble Lord, Lord Macpherson, pointed out that all the pressures on future public spending are upwards and my noble friend Lord Eatwell returned powerfully to the need to increase resilience in every area of the economy and society.

The Government have responded reasonably well to the immediate economic shock from the pandemic, albeit with devastating exceptions, such as for many self-employed, and sometimes, we understand, in the teeth of opposition from the Chancellor. But the Budget starkly exposes—as that other non-Marxist, the noble Lord, Lord Forsyth, spelled out—the poverty of the Government’s longer-term plans, by unduly prioritising future fiscal consolidation over reversing the massive cuts of the past 11 years to so many unprotected areas of public services.

In this context, with a Government trying to justify deeply inadequate pay proposals for the NHS on grounds of affordability, the decision to delay the correct increase in corporation tax for two years is wrong, particularly when combined with the introduction of the super-deduction allowance for the same period. To the extent that the corporation tax rate affects investment decisions, multinationals and global investors will take the rate set for 2023-24 onwards as the relevant one in their considerations. The tax revenue forgone would be sufficient to cover desperately needed targeted increases in public spending. This is the worst of both worlds.

Economic Update

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Tuesday 12th January 2021 Lords Chamber

[Lord Agnew of Oulton (Con) [V]]

The first question, on the link between vaccination rate and economic confidence, is absolutely fundamental. I am not aware of specific research being done on that. If there is any, I will make the noble Lord aware of it. From my own interaction with businesses, there seems to be a strong sense that the two are intertwined, which is why we are putting so much emphasis on it.

I reassure my noble friend that the commitment to levelling up remains as strong as ever. We will be making a Statement in the next few days on our progress in moving civil servants out of London and into some of the areas that the noble Lord refers to. My right honourable friend the Chief Secretary has a large fund for levelling up, for which regions can bid, and that is moving forward as well.

[Viscount Chandos (Lab) [V]]

My Lords, the Economic Affairs Committee, of which I am a member, urged the Government in December to make the £20-a-week increase in basic universal credit permanent, as the noble Baroness, Lady Kramer, has done today. We may not be known for our footballing prowess, but the committee, chaired by the Minister’s noble friend Lord Forsyth, is hardly partisan. The Minister said that the Government were responsive to changing economic conditions, and these have only deteriorated since the committee’s report. Why does the Minister not commit now to this, thereby mitigating the deep anxiety of an inevitably increasing number of recipients, rather than prevaricate until only days before the scheduled expiry of the temporary increase?

[Lord Agnew of Oulton (Con) [V]]

As I said in my earlier comments to the noble Baroness, Lady Kramer, I am not able to give the commitment the noble Lord asks for. The Chancellor will give an economic update in his Budget on 3 March, and I am sure that this matter will be addressed then.

EU-UK Trade and Cooperation Agreement

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Friday 8th January 2021 Lords Chamber

[Viscount Chandos (Lab) [V]]

My Lords, even if my Christmas stocking did not contain a copy of the requested How to Overcome Confirmation Bias, my new year’s resolution was to approach consideration and implementation of this agreement in that spirit. In that context, I welcome the objective and forward-looking response of my right honourable friend the Leader of the Opposition on behalf of the Labour Party. I would commend this approach equally to the Minister; implying that the responsibility for the plight of touring musicians and other artists lies with the EU betrays a regrettable blame game. Just how hard did the negotiators fight for this economically and culturally important sector and its activities within the EU? I strongly support my noble friend Lord Lipsey and others in urging action to address this problem.

The principal other point I should like to raise relates to the Government’s intentions over the admittedly conditional freedoms in the state aid and subsidy regime arising from this agreement. It is now four years since the May Government published the Green Paper on industrial strategy. It is not clear to what extent this Government regard it as a framework for their actions. Did the demonstrably high-risk investment in the OneWeb satellite business, for instance, fit in with it, or reflect only the amateur enthusiasm of the Minister or the adviser? Can the Minister therefore say what the Government’s industrial strategy is, and how they propose to implement new regulatory regimes that balance the important objective of improving productivity and growth—which, as the noble Lord, Lord King of Lothbury, has just emphasised, is so important—with the vital protection of consumer interests?

Finance Bill

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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.

Covid-19: Economy

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Thursday 4th June 2020 Lords Chamber

[Viscount Chandos (Lab)]

I draw the attention of your Lordships to my entries in the register of interests. I am from the Zhou Enlai school of analysis in thinking that it is too early to make a considered judgment of the economic lessons to be learned from the Covid-19 pandemic. However, it is not too early to suggest a few likely strands.

First, multilateralism is better than going it alone, and the Government have shown in their approach to vaccine and drug development that they are capable of acting multilaterally. That lesson should guide our economic strategy too. Secondly, “Keynes rules OK”, as a 1970s graffiti artist might have written—perhaps it was the noble Lord, Lord Russell. The Chancellor’s constructive response to the crisis demonstrates how misguided the previous coalition and Conservative Governments were in pursuing the policy of wholesale public expenditure cuts—another lesson that must not be ignored in the years to come, or the recovery will be elusive.

Thirdly, just-in-time supply chain and inventory management is totally unsuitable for the NHS, whether or not it is an acceptable risk for commercial manufacturing. The economy needs greater redundancy in the engineering sense in order to lessen redundancies in the employment sense.

Finally, the catastrophe in the social care system and the broader exacerbation of inequality resulting from the pandemic point to the urgent need to improve the position of those on lower incomes. Wages and salaries have fallen from 70% of GDP in the 1970s to under 60% now. In an era of unprecedentedly low, risk-free interest rates, the providers of capital can afford to see a rebalancing of the returns, to be divided between themselves and the providers of labour. Employers, trade unions and government, through regulation, all have a role to play in achieving this.

Budget: Economic and Fiscal Outlook

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Tuesday 5th May 2020 Lords Chamber

[Viscount Chandos (Lab)]

My Lords, the Government’s assessment, the Minister and many other noble Lords who have spoken this afternoon acknowledge the certainty of a very high—possibly record—level of deficit this year, of over £200 billion. As the noble Baroness, Lady Northover, has argued, it is very uncertain that the recovery will be as swift as many people hope, and possibly not as swift as the OBR is assuming. Against this background, the Government must not fetishise the level of deficit, based on economic illiteracy, unlike the devastating period since 2010, as my noble friend Lord Hain has highlighted. There should be a gradual glide path of reducing deficits, but with a prioritisation of essential public expenditure.

We must of course look for increases in tax. Does the Minister agree that there is overwhelming evidence that those increases in taxation should come on capital and, in particular, that the natural time for that is when capital is transferred between generations, both in life and on death?

The single most important factor in economic recovery is the earliest possible introduction of a vaccine, as has been so cogently argued by Sir Jeremy Farrar, the director of the Wellcome Trust. I welcome the UK Government’s commitment, as part of the global effort, to the funding of accelerated research and the production and distribution of vaccines, as well as of therapeutics and diagnostics. The Wellcome Trust’s COVID-Zero initiative is encouraging global business and philanthropic contributions, and it is to be welcomed.

I have one question for the Minister in this respect. Although equality of access to vaccines is vital to our national interest, can he confirm that the funding that we are committing does not come from DfID’s ODA budget and will not be taken as part of our 0.7% commitment to international aid under the international development Act of 2015?