Economy Update

Debate between Baroness Kramer and Lord Collins of Highbury

Thursday 26th May 2022 Lords Chamber

[Lord Collins of Highbury (Lab)]

My Lords, I am grateful to the noble Baroness for giving us the opportunity to respond to the Statement. These are incredibly difficult times for people across our nation. That much has been clear for several months, so the obvious question is: why is action being taken only now? Many will see this as an attempt to spare the Prime Minister’s blushes after the publication of the Gray report, which we debated last night, rather than a sign that this Government are on their side.

Inflation is running at a 40-year high and is yet to peak. According to recent analysis, the inflation gap between the richest and poorest is growing, meaning that low-income households are bearing the brunt of the cost of living crisis. As the Chancellor acknowledged in his Statement, we expect the energy price cap to rise by a further £800 in October, and this will take energy bills to their highest level since records began. This crisis is hurting everybody, but it will hit those at the bottom of the income distribution the hardest. The Institute for Fiscal Studies predicts that by October the poorest 10% of households will experience an inflation rate of 14%. By contrast, it will be 8% for the richest 10%. That situation is neither fair nor sustainable.

The various initiatives announced in the Statement are welcome—but of course we would say that as we have been calling for an energy windfall tax for nearly five months. Energy bosses themselves have admitted that they do not know what to do with the unexpected surge in their profits. They have been clear that a windfall tax would not be a disincentive to invest in their operations, and they are already ramping up their investment plans and have money to spare. They can comfortably do both. Despite growing cross-party consensus and the sector’s invitation to act, the Government whipped against a Commons vote on a windfall tax just nine days ago. Of course, the announcement of this temporary targeted energy profit levy is better late than never, but each day of dither and delay has caused unnecessary stress for households and their finances.

We welcome the targeted support for millions of the most vulnerable households across the UK; a significant weight will be lifted when these cost of living payments arrive over the coming months. But this too could have been announced long ago, providing quicker help with April’s cost-cap increase. In the light of Ofgem’s recent announcement, we are also glad that the Government have gone further on universal support. Crucially, the Chancellor has finally dropped the ill-conceived loan element of that scheme. It was wrong to adopt that option and the public immediately saw through his spin. The reduction will no longer be recouped through other increases to bills over the next few years—another Labour policy in action.

One decision ducked by Mr Sunak was on cutting VAT on energy bills. This could have been delivered overnight had the VAT cut been adopted when Labour proposed it last October. It is not the case that many would have had a more comfortable winter? We know that there is growing support for that policy on the Conservative Back Benches, in another place at least. It was even previously touted by the Prime Minister—but I suppose we should not be surprised that he did not keep his word. So can the Minister tell us whether the Treasury will at least be keeping the VAT card up its sleeve should the economic conditions driving increased bills not improve? Can she also confirm whether the Treasury will publish details of how this package is being funded beyond the new windfall tax? Finally, can she give an indication of when enabling legislation for the windfall tax will be brought forward?

In conclusion, we welcome the Government’s U-turns, but there is much more work to be done if people are to be protected from similar price shocks in the future. Given the Government’s willingness to listen to Labour’s ideas, I hope we will soon see aspects of our wider energy plan—for example, rapid action on home insulation and the doubling of onshore wind capacity—put into action.

[Baroness Kramer (LD)]

My Lords, I honestly do not think anybody in this House is seriously fooled. The announcements by the Chancellor today, including the U-turns on a windfall tax and increasing benefits, are basically covering fire for Boris Johnson and his disgraceful role in partygate. The timing gives it away. People have been suffering from a cost of living crunch through much of this winter, making an appalling personal decision on eating or heating. They have needed that help.

The Chancellor says today that he did not know until yesterday that the energy cap would go up by £800 in October. He must be the most out-of-touch person in the country. He could have talked to anybody, on any street, and they would have told him not only that the cap would go up but the amount.

I do welcome today’s package. Anything is needed when a crisis is this urgent and desperate, but one of my concerns is that it covers only the increase in energy costs. The Chancellor’s own speech explains that the average increase in people’s energy bills this year will be just under £1,200. He goes on to say that this is

“the same amount as our policies will provide for the most vulnerable people this year.”

There are other serious pressures, notably the increase in food prices, which are falling most on people on the lowest incomes. I wonder whether the Minister will tell us what experience ordinary people will have and how much more per week it will cost them to deal with those higher food bills. That problem is desperately acute.

There is nothing in here for businesses. I took a quick look at the response from the response from the British Chambers of Commerce, which is usually a very modest group that is always likely to welcome—and does welcome—the actions of the Government. It states:

“For business, the toxic mix of inflation, raw material costs and supply chain disruption”,


largely from Brexit,

“is the flip-side of the coin to the problems facing consumers. Unless steps are also taken to ease business costs, they will likely feed into the inflationary pressure on the economy and quickly eat into the financial support announced today.”

We must not forget that individuals are also facing significant increases in taxes. National insurance contributions are going up 1.25% and, because thresholds have been frozen, many people will find that their income tax bill is shockingly higher than they ever anticipated.

I would like to understand more about why the Chancellor has chosen not to go further. He is going to see £7 billion coming in today from the tax on oil and gas. I agree with others that the oil and gas companies can very much afford to do that. I note that they still plan share buybacks and saw nothing in the market to suggest that that has changed. BP is not cancelling its planned £8 billion in share buybacks this year, nor Shell its £6 billion in announced plans. The Chancellor also now has £8.6 billion in extra VAT due to inflation this year, rising to £40 billion by the end of the Parliament. With that kind of windfall coming into the Treasury itself, there is scope to do a great deal more.

I join others in my party who have called for a cut in VAT, because that would stimulate business, particularly small businesses; take pressure off companies that thought they were going into clear waters coming out of Covid but are now wondering if they are going to survive; and help those on the lowest incomes deal with this severe increase in food prices. Essentially, it is largely paid for by the extra revenues that flow into the Treasury thanks to inflation. Can the Minister explain why that has not happened and why, under those circumstances, the Government are absolutely determined to go ahead with their increase in national insurance contributions, which is going to diminish the pay packet of virtually every working person in the country?

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Baroness Kramer and Lord Collins of Highbury

3rd reading (Hansard): House of Lords
Wednesday 24th January 2018 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I will speak exceedingly briefly because so much has been said. In fact, it has all been said, but it has not been said by me—and I refer of course to the thanks. I thank in particular the Minister, who took the view from the beginning that, if we worked together, we could improve the Bill. I appreciate so much that approach to this piece of legislation. It has been reflected in his Bill team, which, I may say, is made up of people of exceptional quality. They understood the issues we raised and recognised that we were not being either party political or pernickety but, rather, that our points touched on fundamental issues. They also understood that changes could be made to the Bill that would meet the requirements not only of the Government but also of those of us who thought that the way the Bill had been drafted achieved a transfer of power from Parliament to the Executive that was not appropriate—and I suspect in this case was probably not intended. Members of the Bill team also responded with very creative language rather than casually accepting our wording. They did not take what we provided and simply print it; they went back and looked closely at the issues, and came forward with very satisfactory language.

Like others in the House, I thank the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, for leading the charge on removing the powers for Ministers to create criminal offences—something that is so fundamental to our underlying constitution. I hope that the Minister has taken on board that there seems to have been a slip, so that consequentials have remained in the Bill when they should have slipped out. I hope that it will not be necessary for this House to have to deal with them. When the whole issue of criminal offences is considered in the Commons, I hope that it will be dealt with in the appropriate way and in the spirit in which the Bill has moved forward.

I have one last set of particular thanks. Obviously my noble friend Lady Northover will make formal thanks to everyone later, but a key player in all of this has been my great friend and colleague, my noble friend Lady Bowles. The attention that she has paid to the detail of the Bill, and her assiduity, have unlocked everyone’s thinking by demonstrating that you could use reasonable language and sensible approaches to shape the Bill into something better. It has been an exceptional example of the work that this House does in an extraordinary way. I know that my noble friend is relatively new to the House—although she is not new to politics or to Parliament—and I am grateful to her and I really appreciate the fact that the Minister has recognised the contribution that she has made.

[Lord Collins of Highbury (Lab)]

My Lords, I will save my thanks for later, when we consider the Motion that the Bill do pass. Before then, I want to echo the comments about how this Bill has proceeded in terms of the concerns of noble Lords which, of course, have turned on how we as a Parliament can constrain the Executive when they are seeking powers. Of course, this is the first Brexit Bill that the House has considered, and we heard earlier that we have another Bill on its way here. It is my intention to speak in the debate on Second Reading of that Bill to raise again our concerns about an Executive power grab, in particular when it concerns the important issue that the noble and learned Lord, Lord Judge, raised about powers to create criminal offences.

In one of those debates, the noble and learned Lord—of course, the noble Lord, Lord Pannick, also raised these issues—gave us a history lesson about Henry VIII. What struck me was when he said that not even Henry VIII had the nerve to take these powers. Not only have this Government had the nerve, but even when the House spoke overwhelmingly on this subject, we still have errors creeping into the Bill as it has been presented to us today. I hope that this is an error and that, when the Bill goes to the other place, we will not see an attempt to grab power back and that we will get this sorted out in accordance with the wishes of this House.

On the anti-money laundering provisions, as I said, this House, across the board, has done an excellent job of scrutiny, and I think the Minister has done an excellent job of listening to our concerns.

--- Later in debate ---

[Baroness Kramer]

My Lords, I want to make a short intervention on this issue. Your Lordships will remember that the amendment, moved with great energy and skill by the noble Baroness, Lady Stern, to extend public registers to overseas territories—by order, if necessary—was defeated in this House by a narrow margin. It was notable in the speeches of those who stood up to support the government position that we should focus on central registers and that public registers would not be part of that agenda. Speaker after speaker—the majority—spoke against public registers of every kind. I noticed a lot of nodding on some Benches because the arguments were around the importance of privacy, non-intrusion and the protection of identity. Anyone listening to that debate would have assumed that this House was taking a stand against public registers. It is crucial that we see urgent action by the Government on this public register, which the noble Lords, Lord Faulks and Lord Hodgson, have so eloquently described as necessary to expose and, presumably, drive out the abuse of property and government contracts in the UK by those who see them as excellent mechanisms for laundering money obtained through corruption or other nefarious activity.

I hope the Government will understand that they need to defend public registers—I was somewhat stunned that the Minister did not do so in his response—and demonstrate to all of us that this is the mechanism that can deal with this problem. I hope that other locations will understand that and will take up the baton, but one of the best ways to make sure that happens is to demonstrate the change it can deliver for us in the UK.

[Lord Collins of Highbury]

I will be very brief. I congratulate the noble Lord, Lord Faulks, on pushing this issue. I do not think he owes anyone an apology for doing so because it is vital that we tackle this. This amendment is about the commitment that was made but has been delayed for a long time. My concern, and that of the noble Lord, Lord Hodgson, is that the wording of the amendment potentially takes us to 2022 before we see something. I think all noble Lords will be behind the noble Lord, Lord Faulks, in putting pressure on the Government to ensure that they properly meet their commitment.

Still on public registers, I agree with the noble Baroness, Lady Kramer. I am glad to see that the noble Baroness, Lady Stern, is in her place. She made a powerful case for public registers in overseas territories. The front page of today’s Guardian has an article about Appleby and FBME Bank, which was banned from the US financial system. Appleby is a Cayman Islands-registered holding company. Anyone who reads that article will know that this issue will not go away and we will have to come back to it.

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Baroness Kramer and Lord Collins of Highbury

Committee: 3rd sitting (Hansard): House of Lords
Wednesday 6th December 2017 Lords Chamber

[Baroness Kramer]

My Lords, everything that can be said has been said brilliantly. I hope that we will get an update from the Government which convinces us that this issue is back on track.

[Lord Collins of Highbury (Lab)]

My Lords, I note that the Minister was about to stand up but I cannot allow him to jump in so soon.

I congratulate the noble Lord, Lord Hodgson, on moving this amendment. I was disappointed that the noble Lord, Lord Faulks, was not present but he has done a grand job and a very persuasive one. Like my noble friend, I congratulate the former Prime Minister, David Cameron, on initiating consideration of this issue. We are talking not just about government policy but about a government commitment. The noble Lord, Lord Hodgson, is absolutely right—there is no better place than this Bill for this commitment to be delivered. That is why we wholeheartedly support this amendment.

I am glad that the noble Lord, Lord Bates, will respond to the amendment because he knows only too well the cost arising from this money flooding into London. We talk about the impact on London property prices and about corruption but we know that the poorest countries lose an estimated trillion pounds a year through tax evasion and corruption. The poorest in our world suffer as a result. That is why we must see the Government deliver on this solid commitment. My noble friend gave clear examples of what is happening and we have received briefs from Transparency International, but you have only to look down the river from the Terrace here to see St George Tower, a fantastic round tower. Two-thirds of it is in foreign ownership and a quarter is held through offshore companies based in tax havens. We only have to look there to see what is going on. This was a commitment of the former Prime Minister and it is an appropriate Bill. The commitment was that it would be introduced by April 2018.

We have heard how long it is since the consultation was concluded. The sad fact that the consultation has not been published is a bit of an indication about the timetable for any proposed legislation. We have an opportunity here and I hope the noble Lord, Lord Bates, will take it up. In previous Committee sittings we heard from the noble Lord, Lord Ahmad, about how he has been in listening mode and will take the opportunity to take this away. This is a perfect example of how we can deliver on a clear commitment made by the former Prime Minister.

Regarding commitments, at the Anti-Corruption Summit there was also a commitment to update the anti-corruption strategy by the end of 2016. That strategy is now long overdue. I hope the Minister will take the opportunity to say how the Government are committing to this general, overall strategy, because all these things are linked. I look forward with interest to hearing from the Minister how this commitment will be met.