Sibling Couples

Debate between Lord Bates and Lord Bishop of Chester

Thursday 21st March 2019 Lords Chamber

[Lord Bates]

I am grateful for the noble Lord’s support on this.

[The Lord Bishop of Chester]

My Lords, over the years, speakers from these Benches have completely supported the thrust behind the Question from the noble Lord, Lord Lexden. It is not only a matter for the Treasury and tax, but a matter of justice. If another party gets into power, perhaps the inheritance tax thresholds might even come down in due course—who knows? This does not seem a strong argument for denying an obvious need for justice in these cases.

[Lord Bates]

On the point of justice, that was tested, rightly, in the courts. The Burden sisters took their case to the European Court of Human Rights in 2008, and it did not find that there was discrimination against them in contrast to married couples when it came to inheritance tax. That was a clear decision. It is open to anybody else to challenge it through the courts, but our position is clear.

Spring Statement

Debate between Lord Bates and Lord Bishop of Chester

Wednesday 20th March 2019 Lords Chamber

[Lord Bates]

Yes, we should thank the noble Lord, Lord Foulkes, in his absence, for making that plea, which the business managers were able to accommodate. I also wish to associate myself with my noble friend Lord Wakeham’s generous tribute to my good friend, colleague and mentor on the Front Bench, my noble friend Lord Young. I had not realised they were celebrating 45 years. I associate myself with my noble friend Lord Wakeham’s generous remarks to my noble friend about his service in both Houses.

I shall try to provide some taxonomy of the contributions, which ranged very widely but more or less settled down in the following areas. The first was, unsurprisingly, Brexit. I began repeating the Spring Statement by referring to what the Chancellor said about Brexit: it is dominating thinking not only in this place but in business. The noble Lords, Lord Tunnicliffe, Lord Davies of Stamford, Lord Davies of Oldham and Lord Bilimoria, the noble Viscount, Lord Chandos, my noble friends Lord Gadhia and Lord Northbrook, and the noble Baroness, Lady Kramer, made points about that headwind. The only area of difference between us is that we say that the opposition parties hold it within their gift to dispel that cloud of uncertainty by backing the deal before us, but matters are unfolding. If there is any news to report I hope that a Box note will make its way along to me.

There was—I shall not overegg it—support for and recognition of the progress which has been made, notwithstanding the uncertainty. We enjoyed the noble Lord, Lord Macpherson, describing Treasury civil servants having to deal with disappointment, and I am sure that was enjoyed within my earshot. The reality is that this Statement was able to unfold some positive news about levels of debt, employment and the general fiscal situation. The noble Lords, Lord Macpherson, Lord Wakeham and Lord Northbrook, referred to the positivity. Even the right reverend Prelate the Bishop of Chester—

[The Lord Bishop of Chester]

Even?

[Lord Bates]

I am sorry—delete “even” from the record. The right reverend Prelate the Bishop of Chester, whose point about housing I will come back to in a minute, referred to it. The noble Lords, Lord Leigh, Lord Gadhia, Lord Bilimoria and Lord Suri, recognised that progress had been made despite the headwinds. It is absolutely right that we recognise that that progress has been made because British business and enterprise up and down the country—and around the world—is making a Herculean effort, creating jobs, wealth and buoyant tax revenues. These revenues are coming into the Exchequer, giving us the opportunity to look at them.

Across most of the contributions, there was a focus on public services and public spending. As I mentioned, the spending review will be in the summer and conclude in time for the Budget for the autumn, which will rely on it. Contributions effectively broke down into four areas. The noble Lords, Lord Macpherson and Lord Hain, and the noble Earl, Lord Listowel, referred to social care. The noble Lords, Lord Tunnicliffe and Lord Bilimoria, referred to policing, and the noble Lord, Lord Scriven, alluded to the tragic knife crime situation in Sheffield. The right reverend Prelate the Bishop of Chester, the noble Lord, Lord Wakeham, and the noble Baroness, Lady Thornhill, referred to housing. The noble Lord, Lord Shipley, and the noble Earl, Lord Lytton, addressed local government finance.

Two other areas, which were grouped together, were the challenges of the changing nature of tax revenue and collection. The attraction of statutory land tax, which the noble Lord, Lord Wakeham, referred to, is that it is very easy to collect. The changing nature of tax is making collecting tax more challenging. The noble Lord, Lord Wakeham, the noble Earl, Lord Lytton, my noble friend Lord Leigh and the noble Viscount, Lord Chandos, referred to that challenge and ways to address it. Coupled with that is business confidence, which the noble Lords, Lord Gadhia, Lord Suri, Lord Northbrook and Lord Davies, referred to.

I will use the bulk of my time to address the questions raised as a result of those contributions. Several noble Lords asked how the Brexit dividend might be funded. The OBR’s Spring Statement forecast that business investment is weak. The noble Baroness, Lady Kramer, referred to that, and we acknowledge that in the near term. However, as uncertainty wanes, it picks up to 2.3% in 2020 and grows stronger at this pace from 2021 onwards. GDP growth is forecast to be 1.2% in 2019 before picking up to 1.4% in 2020 and 1.6% from 2021 onwards.

The noble Lords, Lord Tunnicliffe and Lord Hain, as well as several others, referred to infrastructure. We have increased the National Productivity Investment Fund to £37 billion to support key infrastructure up and down the country. Public investment is at its highest sustained level in 40 years.

The noble Lord, Lord Bilimoria, and the noble Earl, Lord Lytton, referred to Making Tax Digital—indeed, the noble Lord, Lord Wakeham, focused on that and the noble Lord, Lord Hain, touched on it. Research now shows the high level of awareness among business and tax professionals: eight out of 10 businesses were aware at the end of last year and over 80% of those had already started preparing. Of VAT returns, 98% are already done online.

The disguised remuneration loan charge was raised quite extensively, by my noble friend Lord Northbrook; by the noble Lord, Lord Wakeham, on behalf of the noble Lord, Lord Forsyth; and by the noble Baroness, Lady Kramer, with her work on the all-party parliamentary group. Disguised remuneration schemes are and always were contrived tax avoidance. It is not normal or reasonable to be paid loans that are not repaid in practice; my noble friend Lord Wakeham was right in his sage advice on that, as in so much other advice he has given over the years. It is the individual’s responsibility to ensure the accuracy of his or her tax return. HMRC is pursuing the promoters of disguised remuneration schemes and has been investigating over 100 promoters. In the last year, HMRC has taken litigation action against 10 scheme promoters.

I turn to universal credit and welfare, which the right reverend Prelate the Bishop of Chester referred to and the noble Lord, Lord Shipley—