Fiscal Rules

Lord Forsyth of Drumlean Excerpts

Tuesday 29th October 2024 Lords Chamber

[Lord Livermore (Lab)]

I wholeheartedly agree with both points made by my noble friend. Our fiscal rules, as he says, were set out by the Chancellor in her Mais Lecture and set out again in our manifesto. Everything that we have said subsequently is consistent with what we said in our manifesto, and I think that the policy of the Opposition is the reason our country is in the state it is in. It is why growth has been held back and why our critical infrastructure is basically on its knees.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am a little confused. The Chancellor said before the election that she would not change the fiscal rules, because that would be fiddling the figures. Was she right then and wrong now? Can the Minister explain why we are having this Statement at all, ahead of the Budget? Why is it not part of the Budget consideration? Is it to distract attention from the fact that the Government are basically fiddling the figures and, in fiddling the figures, committing us to borrow more money to pay the interest on the money that has already been borrowed?

[Lord Livermore (Lab)]

The noble Lord knows that I have huge respect for him, so I hate to say when he is wrong, as I think he is in his first point. We were extremely clear that we would change the fiscal rules to the new ones that we set out, first, as my noble friend Lord Eatwell said, in the Mais Lecture and then in our manifesto, which said:

“This represents a clear break from the Conservatives who have created an incentive to cut investment; a short-term approach that ignores the importance of growing the economy”.


We were crystal clear that we would change the fiscal rules. On the second point, it is perfectly reasonable that, when the Chancellor is at the IMF, she sets out her policies in this regard.

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[Lord Livermore (Lab)]

I am grateful to the noble Lord for highlighting the guard-rails that will be set out tomorrow, when further details will be set out in the Budget.

[Lord Forsyth of Drumlean (Con)]

My Lords, the noble Lord corrected me and said I had made a mistake in saying that the Chancellor had said that she would not alter the fiscal rules, because that would be fiddling the figures. On 9 October 2023, in interviews around the Labour Party conference at that time, that is exactly what she said. She stressed that Labour would not alter the fiscal rules to fit its spending goals, as doing so, in her words, amounted to “fiddling the figures”. What happened between October 2023 and the Mais Lecture to change her mind about the unwisdom of fiddling the figures?

[Lord Livermore (Lab)]

Nothing changed. There is a slight misunderstanding here. We have always been very clear that we would change the previous Government’s fiscal rules. The Chancellor was referring to the fact that we would not change the fiscal rules we set out—and we have not. The fiscal rules that we are delivering absolutely fit our manifesto commitments, and I do not understand the lack of understanding on the Benches opposite. The

“stability rule will mean that day-to-day spending will be matched by revenues”,

exactly as we committed to in our manifesto—that is a direct quote. In addition, the investment rule will deliver on our manifesto commitment to get debt falling as a proportion of our economy. Both those things were set out in our manifesto, both were set out in the Mais Lecture and both will be delivered in tomorrow’s Budget.

Working From Home: Public Sector Productivity

Lord Forsyth of Drumlean Excerpts

Wednesday 23rd October 2024 Lords Chamber

[Lord Livermore (Lab)]

It is an interesting question, and the answer is yes, I would be very willing to look at those impacts. As we have been discussing, labour supply has impacts across the economy. In rural areas, where sometimes it is difficult to travel into work, being able to work from home and the ability to have fast-speed internet connections can make a massive difference, and I would be more than happy to look at those issues.

[Lord Forsyth of Drumlean (Con)]

Is the Minister confident that working from home is increasing productivity and does he think there is any correlation between the rise in the number of people watching daytime television and the rise in the number of people working from home?

[Lord Livermore (Lab)]

At no point in any of my answers did I say it raises productivity—just so I am very clear. I will read from the IMF’s report, for the noble Lord’s benefit:

“Classic firm and individual micro studies typically find that hybrid working … has a roughly flat impact on productivity. Working from home benefits workers by saving them from exhausting commutes and typically provides a quieter working environment. But by reducing time at the office, it can also reduce employees’ ability to learn, to innovate, and to communicate. These positive and negative effects roughly offset each other, generating no net productivity impact”.

Crown Estate Bill [HL]

Lord Forsyth of Drumlean Excerpts

Committee stage
Tuesday 22nd October 2024 Lords Chamber

Moved by

[Lord Forsyth of Drumlean]

37: After Clause 2, insert the following new Clause—
“Salmon farms on the Crown EstateAfter section 3 of the Crown Estate Act 1961, insert—“3A Salmon farms on the Crown Estate(1) In carrying out their functions under this Act, the Commissioners must assess the—(a) environmental impact, and(b) animal welfare standardsof salmon farms on the Crown Estate.(2) If the assessment under subsection (1) determines that a salmon farm—(a) is causing environmental damage, or(b) has significant animal welfare issues,then they must revoke the licence for the farm in question.(3) The Commissioners must assess the potential—(a) environmental impact, and(b) animal welfare standardsof applications for licences for salmon farms on the Crown Estate.(4) If the assessment under subsection (3) determines that an application for a licence for a salmon farm—(a) may cause environmental damage, or(b) raises significant animal welfare concerns,then they must refuse the application.””

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[Lord Forsyth of Drumlean (Con)]

My Lords, it is a pleasure to move this very modest and uncontroversial amendment, which would place a duty on the Crown Estate, in carrying out its functions under the Bill, to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate. If an assessment determines that a salmon farm is causing environmental damage or significant animal welfare issues, it must revoke the licence for the farm in question. If assessments of the potential environmental impact and animal welfare standards of applications for salmon farms on the Crown Estate determine that they may cause environmental damage or raise significant animal welfare issues of concern, the Crown Estate must refuse these applications. Who could be against that, except people running salmon farms that do not meet those conditions?

I should begin by declaring an interest. I am a fisherman and my family own one week on the River Tay. I confess that I am absolutely bewitched by the glory of Atlantic salmon, which are now considered an endangered species alongside mountain gorillas and Siberian tigers. This is a really serious issue.

The Crown Estate commissioners on both sides of the border—I regret that the Bill does not cover the commissioners’ activities north of the border because of devolution, but I am sure that if England sets the standard then others will follow—have a responsibility to protect the seabed, which was owned by the Crown and has been vested in the Crown commissioners for centuries. The monarch is not involved, but the commissioners should have a clear duty to protect the environment and nurture the ocean’s wildlife, particularly given the commitment to those ideals of members of the Royal Family, in whose name they act.

I shall concentrate on the impact of farming Atlantic salmon, which has to be licensed by the Crown Estate. There are farming interests that have very high standards, but a wide variation of standards has been applied to salmon farming across the globe. All over the world, salmon farming has resulted in environmental damage to wild fish populations and threatened other species as a result of varying practices.

Salmon are often concentrated in large numbers in open-net cages and flushed with chemicals and antibiotics to combat disease and lice—lice that literally eat the fish alive if not treated. The death rate in the cages is appalling and would never be allowed for conventional farming. Some 20 to 40% of those salmon die and are dumped. Imagine what people would say if they were going past fields of cows or sheep and finding those sorts of casualty levels—there would be an outcry. But of course all this is unseen because it is below the surface of the water.

The list of various toxic chemicals that have been used to tackle lice includes organophosphates, which are highly dangerous, as we were often reminded by a former Member of this House. Other chemicals work by dissolving the bodies of the lice on the salmon, which are crustaceans. That results in the chemicals leaching into the sea and may very well explain why fishermen then start catching lobsters and crabs with half their shells dissolved. I urge anyone listening to this debate to look on YouTube at the horrific condition of salmon in some of these cages as a result of uncontrolled sea life predation. It is a horror movie that is widely available and very easily seen.

The feed that these salmon are given is fishmeal pellets, to which further chemicals are added, including in some cases dioxins and PCBs. These are all controlled, but to present this as a sustainable environmentally-friendly product stretches credibility. Other chemicals are included in the feed in order to change the colour of the flesh. If you are a supermarket, rather like when you want to paint your house, you can get a colour code and choose in which shade of orange or red you would like the fish on your shelves to appear—perhaps, as a result, misleading the customers as to what it is they are buying.

The importance of ensuring effective regulation and best practice hardly needs emphasising. The supply of pellets demands catching gargantuan quantities of small fish. Estimates vary, but those that I have seen are that between 3 and 5 kilograms of anchovies, sardines and other small pelagic fish are needed to produce just 1 kilogram of farmed salmon. That is a ratio, if you are being kind, of 3:1. To describe this as a sustainable business beggars belief. The scale is such that whole fishing communities have lost their livelihoods in west Africa, where the fish are taken by large vessels and turned into fishmeal, creating a lack of employment for local fishermen and a collapse in local economies.

There is also irreversible damage being done to the seabed as fish faeces, chemicals and uneaten food fall through the cages. All that lands on the seabed, creating a disgusting, vile brew on an industrial scale. There are vast numbers of fish. Even in a small tank there will be 20,000 salmon, with up to 90,000 in the larger cages.

Such high concentrations of salmon produce high concentrations of lice. These swarms of lice attach themselves to wild, migrating salmon, with fatal results. Escapees bring diseases to the wild population and whole rivers have been cleaned out of wild fish. Diseases include ISA—infectious salmon anaemia—and bacterial kidney disease. ISA is like AIDS for salmon but without any possible cure. There are many examples of how these viruses have been transmitted. In California, believe it or not, Atlantic salmon were being farmed using eggs transported from Norway. Those eggs contained the virus, which then took out the local population of Pacific salmon.

Some in the industry are in denial. The truth is that, when the salmon farms arrive, it seems that the wild population crashes. Examples include the loss of the sea trout runs on the Scottish west coast and the once-great salmon rivers in Norway. In British Columbia, on the Broughton archipelago, the wild pink salmon population was reduced by 80% by sea lice that came from fish farming. In Chile, ISA—that virus I have just spoken of—resulted in the collapse of the entire industry. Iceland saw huge protests, with about 1% of the population turning up to protest outside the Parliament about the possibility of fish farms being allowed to continue.

Wild fish interbreed, diluting the gene pool and reducing the ability of the progeny to make migratory journeys. This ability has been honed over hundreds of thousands of years by fish that are genetically unique to each river. They are breeding with the salmon from the farms. They are described as “Scottish salmon”. They are no more Scottish salmon than anything else. They are based on Norwegian salmon and are genetically modified to grow quickly. They are a million miles away in terms of their gene pool and structure from the fish that operate in the rivers of Scotland, each of which has a unique genetic identity and as a result is equipped to be able to run the river to spawn and to go out to sea and return after one or three years. If those fish interbreed with this alien species, the result is progeny incapable of making that journey and therefore the destruction of the population in the rivers concerned. And by the way, on the numbers escaping, in Loch Melfort in Scotland 48,000 fish escaped, dwarfing the wild population.

There is a growing realisation around the world of the environmental damage being caused. This is resulting in complete bans on fish farms. Alaska has had a ban since 1990. Argentina has introduced a ban. California has introduced a ban in state waters. In British Columbia, the plan is to phase out open-net farms by 2025 and move to closed systems.

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[The Earl of Leicester (Con)]

My Lords, I declare interests as a trustee of the Burnham Overy Harbour Trust and president of the Wells-next-the-Sea RNLI station—I say that only because they both go out to sea. I apologise that I was not here at Second Reading on 2 September; I was in the Netherlands on business also relating to the environment. Like my noble friend Lord Trenchard, I agree that the main purpose of the Bill is to allow the Crown Estate to borrow and leverage against its assets and manage them in a way becoming of the 21st century.

I am astounded that the Crown Estate is not required to undertake the same level of environmental impact assessment that we do on the mainland. Amendment 37F is incredibly straightforward. It seeks to install in law a requirement for the Crown Estate to undertake an EIA, just like any other business on the mainland planning to undertake large-scale engineering works.

In preparation for this amendment, I spoke to a number of people in my local community on the coast of North Norfolk: Andy Frary of the Wells & District Inshore Fishermen’s Association; Bob Smith, the Wells-next-the-Sea harbourmaster; Leo Hambro, founder of Tidal Transit; and Professor Jenny Gill of the School of Biological Sciences at UEA—she is not really in my community any more, because she has just moved to Fife.

As the harbourmaster and I discussed, obviously the Crown Estate wants the rent, but this EIA needs to be rather more rigorous. If we insist that the Crown Estate will be required to undertake detailed environmental impact assessments, who will monitor that? Will it be the MMO? Bob Smith’s view is that the MMO is vastly removed from the coalfaces; it gives out the licences but has inexperienced staff and does not really understand local communities.

The fishermen I spoke to, the harbourmaster and I are very much for wind farms out to sea. We have marine protected areas and, ironically, once a wind farm is established, it becomes a sort of natural marine protected area. Rock armour is placed around the base of the wind turbines to protect them from big tides and scarring, et cetera. It then quickly attracts crustaceans—lobsters and crabs—and fish and there is a 50-metre “no fishing” rule for fishermen, who cannot get close to them. It is almost a sanctuary for all these crustacea. As they develop and thrive, they move out and the fishermen can then catch them.

There was also concern that giving licences to different companies for different wind farms was rather disjointed; they should be liaising on where their cables can come together out to sea so that they hit the land in one place. That has happened to an extent in North Norfolk, where they come ashore at Weybourne.

Professor Jenny Gill looks at this from an environmental point of view. The location of these wind farms is the most important thing. We need to avoid putting them where birds are—they are easier to monitor than fish and sea mammals. The concern is bird strike out to sea. Organisations such as the BTO and the RSPB have done a lot of work on flight heights of migratory birds and sea birds in relation to rotor speed and on whether bird strike is a big threat. Bob Smith surveys boats going out from Wells-next-the-Sea; maybe they are lucky and the wind farm they have been surveying is in the right place, but they come back and say, “We saw four birds today”. That damage is not happening.

In seeking this EIA, I am encouraging the Government to involve nature conservation organisations at an early stage so that they can be part of the planning process. Professor Gill mentioned that this is getting quite complicated. Beth Scott, professor in marine ecology at Aberdeen University, has worked on how tides work in open sea and form around tidal nodes and on whether putting static turbines on the ground changes the way tides work and the spatial way in which they move.

The big thing is making the planning process more transparent and getting conservation organisations at the table. They do not want to be adversarial; they are all at the green end of the scale and want to see a lot more of this renewable energy.

I had a very interesting conversation with Leo Hambro, of Tidal Transit. He operates crew transfer boats. I talked to him about the construction phase of these wind farms. He said that there have been improvements of late, in the last few years, including air bubble rings that are placed around the piling system which let out bubbles to reduce the sonic boom—which of course carries a long way underwater—therefore, we hope, mitigating damage to mammals. However, that has happened only recently.

When trenching, that is done either through some sort of underground machine that pulls a plough through the sand or, more often, through a large ship pulling a plough which turns over a trench a metre deep, into which the big cable is placed and then sand is placed back over it. If necessary, a few more rocks are placed on top of it. However, there really ought to be an EIA to decide which route these cables take. I suspect they probably take the shortest and cheapest route, but do they avoid mussel lays? They must avoid sunken ships, but off the coast of north Norfolk, in Cromer, we have a very important chalk reef, and it is important that that is protected.

To go back to crew transfer boats, Leo Hambro has seven of them. In fact, there are 200 around the UK and 700 around the world. Some 80% of them are in the UK and Europe because of the large-scale wind farms we have out to sea. To explain, these boats go out every day and take engineers to maintain and man the wind farms. The average stat for the industry is to use 1,500 litres of red diesel a day. In reality, he said they could use 2,500 to 4,000 litres a day, particularly if they are servicing a wind farm which is 45 miles away. He has to service East Anglia ONE from Lowestoft. These boats are going at 20 knots, so they are burning a lot of diesel.

It is not the case that when they get out there they switch their engines off. They have to spend up to two hours pushing against the turbine to make a safe platform for workers, transferring kit on and off the boat, et cetera. When they are then waiting for another three hours or so for the engineers to do their work, they have to stand off, but they do not drop an anchor and switch off; they have to run their engines to maintain generators and such on-board.

Leo Hambro is operating boats out of Wick, Grimsby, Great Yarmouth and Lowestoft. An interesting point to which I hope the Minister pays attention is that one of his boats is being converted to run on pure electric. That is being done in Great Yarmouth and should be ready for May 2025, thanks to DfT UK SHORE funding. It also includes offshore and onshore charging infrastructure, which I will come to in a second. The reason I mention these boats is that, for 200 boats using 2,500 litres of red diesel a day on average, five days a week, 50 days a year, that is 125 million litres of diesel.

That takes me to exhausts. AdBlue is added to the exhaust to reduce toxins, including nitrous oxide and sulphur oxide, and diesel particulates. AdBlue is made of synthetic ammonia—

[Lord Forsyth of Drumlean (Con)]

Watch the time.

[The Earl of Leicester (Con)]

Am I not allowed 15 minutes?

[Lord Forsyth of Drumlean (Con)]

No.

[The Earl of Leicester (Con)]

My apologies—this is it. AdBlue is not made from green ammonia. All these marine exhausts omit their fumes below the water to keep the exhausts cool. AdBlue is depositing heavy metal poisoning into the sea. I will stop there.

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[Viscount Thurso (LD)]

My Lords, I will speak to this group of amendments. I was not sure which one most suited the comments I wished to make, but I think it is probably Amendment 37F in the name of the noble Earl, Lord Leicester.

At the heart of all three amendments is a question about the relationship between, on the one hand, the economic activity that we wish to undertake, quite properly, and, on the other, the environmental and natural consequences that may take place. It is about the right balance between what we seek to do economically and what we seek to protect environmentally. I will speak to that general point.

Taking my lead from the noble Lord, Lord Forsyth, I should declare my interests. I too am an angler, although I do not get to spend nearly enough time on the river, and I also happen to own the river, which is rather nice. I am chairman of the Caithness District Salmon Fishery Board, which is currently very involved with Crown Estate Scotland on various issues. I may also be—I hope—the beneficiary of a number of renewable projects. I have every sort of interest that you could possibly have; I think that they are broadly covered by my register, but I thought that I had better spell them out.

As I said, the heart of the three amendments is about seeking to ensure that, when we set out to undertake an economic activity of any kind—and this is absolutely what happens on land—we make a proper and full assessment of what the impact is likely to be on the environment that we are putting that economic activity into. That includes the flora, fauna, fungi and everything else that you might find there.

I want to give one quick example; it is in Scotland but I think it is relevant. We on the north coast have four rivers which are all in very good health. On the Thurso we electrofish every year and for some years now we have known that you cannot get any more juveniles into the river, it is in that good order. So, at a time when most of Scotland has salmon stocks that are endangered, as the noble Lord pointed out in introducing his amendment, we have the one bit of Scotland that actually is in good order and producing good salmon—and long may that last.

The west of Shetland wind farm, which is going to go ahead in the not-too-distant future, and which I support as a piece of offshore energy, may have a problem for us in the fishing world, and that is that we do not know where our smolts go. When the salmon grow in the river, they come to a point where they smoltify and they take to the sea and off they go. They are then called “smolts” or “post-smolts” and we do not actually know where they go. There has been smolt tagging and tracking in the Moray Firth which discovered that the fish that come out of various rivers in the deep south around Inverness and places like that have a tendency not to do what you would expect, which is to scoot up the coast and head past Orkney. For reasons known only to them, they leg it across to Aberdeenshire, which I always thought showed a bit of a lack of taste. The point about that is they do not go through the Beatrice wind farm and that piece of knowledge is vital in being able to look at what you may need to do to mitigate.

Similar studies on the west coast show that Irish and west coast fish tend to go due north, as you would expect, and straight off to Iceland. We just do not know where our smolts are going, so we made contact with Crown Estate Scotland, which I have to say has been incredibly helpful on this, and the chairman put me in touch with various people. As a result, I believe that there will be a smolt-tracking project which will allow us to know where our smolts are going and we will therefore know whether we have a problem, so we can look at what can be done to mitigate it if we have.

That comes back to the point I was making that, without information, you cannot make a decision on the appropriate thing to do. Crown Estate Scotland on this occasion has been extremely helpful, as I said. It wishes to make sure that it does the least harm, which is wonderful, but it seems to me correct that, in forming any legislation, it is appropriate, as we do with the nuclear industry and a whole range of other things, to state what it is that people have to provide by way of information in terms of an economic impact assessment and what they will do to mitigate the inevitable downsides that occur when you have developments of these kinds.

So I am not sure whether I am supporting anybody in particular—noble Lords will have to make up their own minds on that—but I am supporting the principle that we need knowledge and information about what may happen so that we can then make an informed choice on what mitigation is required and how much damage we are prepared to accept for the value brought by the economic activity.

[Lord Forsyth of Drumlean (Con)]

I am most grateful to the noble Viscount for giving way and I am much heartened to hear that his rivers and fish are doing very well. I just wonder what his reaction would be if someone decided they wanted to put a fish farm in the track of his migrating smolts when he knows where they are.

[Viscount Thurso (LD)]

I suspect I would be pretty horrified, given all the information that I know about it, but I have long tried to stick to a principle in your Lordships’ House to speak about what I really know about and avoid the things I do not know too much about, so I hope the noble Lord will forgive me if I do not go down that road.

To come back to my central point on the need to get information, it is about the right duty that we should ask the Crown Estate to have and then the process it should follow to deliver it. So my request to the Minister would be to look at the obvious strength of feeling on all of these points and perhaps the Government should look at what their view would be as to the right process and the right way to put it into the Bill and come back with an amendment that would achieve that and would suit the Government.

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[Lord Livermore (Lab)]

I am afraid that is not something I know about, but I am happy to write to the noble Earl.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am grateful to the Minister for that reply, which was clearly written by Treasury officials who do not get out very much. The Minister has been kind enough to say that we should indicate whether we think the existing legislative requirements and regulations are working. We have just had an excellent debate, which has made it absolutely clear that wild salmon are being destroyed, not just in this country, but elsewhere, so the answer is: it is hurting, and it is not working. A very modest requirement on the landlords, the owners of the seabed to—

[Lord Livermore (Lab)]

Just to be clear, I wanted clarification as to whether the existing legislation could work, or, in itself, could not work.

[Lord Forsyth of Drumlean (Con)]

I would be very happy for the Minister to come back with an amendment that would indicate how it could be made to work, because it is not working. It seems to me a very modest measure that would say to the Crown Estate that it has given a licence to these people, so it is therefore under a duty to make sure that they act in accordance with all regulations and in a way which protects the environment for which they have responsibility. I cannot imagine why the Minister would reject that.

In view of the very inadequate response, I am very tempted to test the opinion of the Committee, but I will not because I hope that, perhaps in further discussions with the Minister, we can get an amendment which will actually offer some degree of protection to the hundreds of thousands of fishermen who are concerned about this, to the communities who are concerned about this and to the many, many people on a cross-party basis. I cite the example of the noble Baroness, Lady Jones, and I who are united; we are linked at the hip in our determination to make this happen.

However, I would like to thank everyone who has spoken in the debate in support of not just my amendment but that of my noble friend Lord Douglas-Miller, who made a very fine speech explaining precisely why things are not working. I am grateful to my noble friends Lord Trenchard, Lord Strathclyde, Lord Moynihan and Lord Caithness, the noble Baroness, Lady Jones, of course, and the noble Earl, Lord Kinnoull—it is quite a gathering. The Minister ought to go back and think about this again, and we will table a further amendment on Report.

I am most grateful to my colleague my noble friend Lord Roborough for the support that he gave to this amendment and his careful consideration. I have to say that I am not sure the Minister’s officials have shown the same diligence in looking at what is a major problem which, if not tackled with immediacy, will see the extinction of the wild salmon in this country. That is not something that any Government would want on their record. Given the response, I beg leave to withdraw my amendment.

Amendment 37 withdrawn.

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[Lord Livermore (Lab)]

I am happy to write to the noble Earl on that point. In the meantime, I hope he will feel able to withdraw his amendment.

[Lord Forsyth of Drumlean (Con)]

The Minister has not really addressed the fundamental point made by the noble Earl, Lord Kinnoull: fish and birds do not know where the border is between Scotland and the rest of the United Kingdom, and there are common interests. All he has done is read out a list of regulations and statutes that apply to the two commissions. I think the noble Earl was asking what provisions can be made, so that the two sets of commissioners are able to operate in the interests of the United Kingdom as a whole. As a unionist, he will surely appreciate the importance of that.

[Lord Livermore (Lab)]

What I read out was a response to the amendment tabled, which asked for exactly that; that is why I read it out. The noble Lord raises profound constitutional questions which I may not be the right person to address them to.

HMRC Self-assessment Helpline

Lord Forsyth of Drumlean Excerpts

Tuesday 26th March 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I do not fully recognise the picture that the noble Baroness paints. Over the course of this Parliament, the amount of funding provided to HMRC has increased from £4.3 billion in 2019-20 to £5.2 billion in 2024-25, and the overall customer satisfaction across phone, web chat and online is 79.2% versus a target of 80%. However, I recognise that there are certain elements within the HMRC offer where taxpayers need to get a better service. That includes answering correspondence for some of the more complex and hard-to-reach people: the vulnerable and the digitally excluded. That is exactly why, quite frankly, we need to move resources from taxpayers who can and should use online and ensure that those resources can be targeted at those areas where customer service is not as good as it should be. That is what we intend to do.

[Lord Forsyth of Drumlean (Con)]

My Lords, does my noble friend accept that the large reduction in the number of people in this country who are self-employed is a direct consequence of the Government’s introduction of IR35 legislation, which has led to huge confusion among the self-employed? Many people are giving up—just ask any taxi driver in London. Does she really think that the Inland Revenue, or HMRC as it is now, can provide a proper service with so many of its people working from home?

[Baroness Vere of Norbiton (Con)]

Obviously, it is up to the individual to ensure that they pay the right tax at the right time. HMRC intends to make that as easy as possible, but for some more complex situations it is right that individuals get tax advice. People working for HMRC can work from home two days a week. They use the same systems as they do in the office, and they are held to the same standard that they would experience when they are in the office.

Self-employment: A1 Forms

Lord Forsyth of Drumlean Excerpts

Monday 12th February 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

The Beatles split up the year I was born so I do not have as long a memory as the noble Lord. However, the Government are very focused on developing our emerging artists and ensuring that they can get to new international markets, whether that be in the EU or beyond. The music export growth scheme has been tripled and will now spend £3.2 million over the next two years to support these emerging artists. When it comes to music, we are talking about not just the EU but the entire world.

[Lord Forsyth of Drumlean (Con)]

My Lords, does my noble friend the Minister agree that this is not a problem of Brexit but a problem of EU members not being co-operative?

[Noble Lords]

No!

HMRC: Tax Returns

Lord Forsyth of Drumlean Excerpts

Wednesday 10th January 2024 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, further to my noble friend’s first Answer, has she actually tried ringing the HMRC herself, and what was the outcome?

[Baroness Vere of Norbiton (Con)]

My noble friend will be very pleased to know that I phoned HMRC on Monday and eventually managed to speak to a person. I did not tell them who I was, and I do not have very complex tax affairs. It was something very simple, but it could be done only by a real person.

Financial Stability: Private Equity Firms

Lord Forsyth of Drumlean Excerpts

Wednesday 13th December 2023 Lords Chamber

[Baroness Vere of Norbiton (Con)]

The noble Lord mentions a situation I am not aware of, but I will say that all owners of UK companies must abide by the Companies Act and their obligations therein.

[Lord Forsyth of Drumlean (Con)]

My Lords, has my noble friend been following the speeches and articles written by the noble Lord, Lord King, the former Governor of the Bank of England, in which he suggests that it is so important for the Bank to concentrate on inflation and the price mechanism that it does not make sense to add to those responsibilities a green agenda, which will distract it and draw it into political activity?

[Baroness Vere of Norbiton (Con)]

I have not been following those interventions from the former governor, the noble Lord, Lord King, but I shall certainly look at them.

King’s Speech

Lord Forsyth of Drumlean Excerpts

Monday 13th November 2023 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, it is a pleasure to follow the right reverend Prelate the Bishop of Durham. We all share his aspiration to ensure that children and families are supported, but in order to do so we need to create the wealth to achieve that. Governments do not create wealth, businesses do, and I am sorry that his speech had very little about that aspect.

I shall talk about how the contents of the gracious Speech are going to be delivered and about the accountability of the Executive to Parliament. In the last Session there were 30 Ministers and Whips in this House, and 14 of them were unpaid. I thought we ended the practice of having to have private means in order to be able to serve in government in 1911. In this Parliament, one extremely effective and senior Minister of State was forced to take demotion in order to receive a reduced salary. Another able Front-Bencher gave up altogether as he could not continue unpaid. All Ministers of State in this House are now expected to work for nothing. This includes senior Defence and Foreign Office Ministers, whose duties involve travel away, and therefore they are not even able to claim the daily £300-odd allowance that is meant to cover accommodation and other necessary costs.

Unsurprisingly, the result has been that Peers are unwilling to take up ministerial office as many simply cannot afford it, while others are resentful at being asked to do so. The less than satisfactory remedy has been to appoint new but inexperienced Peers with deeper pockets, some of whom disappear after a short time in office to the Cross Benches—no names, no pack-drill.

Having served in government in the Commons for more than a decade, I am acutely aware of how much more demanding it is to be at the Dispatch Box in the House of Lords. Although politer, the questions are penetrating—even from your own side—and well-informed, and Ministers are expected to answer for the Government as a whole. Great rafts of legislation, bristling with Henry VIII clauses that have not even been discussed in the other place, surge up the Corridor for detailed consideration long after the other place has gone to bed. The House of Lords sits for longer hours than the elected House. In the last Session, 7,937 amendments to Bills were tabled and, unlike in the other place, each one is considered, with any of us free to speak with no restrictions on time—something that the Liberal Benches take full advantage of. Of those, 2,680 were government amendments accepted by the House, together with 277 opposition amendments. In contrast, as most Bills in the other place are timetabled, few if any amendments are considered and debated at all. The truth is that the other place is no longer doing its job of scrutinising legislation effectively and holding the Executive to account. There is much talk of reform of the House of Lords, but the Lords is working, working hard and doing a good job; it is the other place that is in need of reform.

Ministers in the Lords cannot be paid a ministerial salary because the Government have increased the numbers of Ministers in the Commons to 95, the maximum number allowed. I would like to think this profusion of Ministers had nothing to do with extending patronage and reducing parliamentary accountability. However, there is certainly little evidence that it leads to better government.

There has clearly been blatant ministerial inflation. I am indebted to my noble friend Lord Young of Cookham for pointing out that Baroness Thatcher’s first Administration had two Ministers in the Department of Transport in 1979—a formidable pair, in my noble friends Lord Fowler and Lord Clarke. This morning—or at least earlier this morning—there were five Ministers, even though much of what they were responsible for in 1979 has been privatised. The DHSS had five Ministers and is now replaced by two departments with a total of 12 Ministers, six in the DWP and six in the DHSC.

The Ministerial and other Salaries Act 1975 imposes a limit on the number of Ministers of 109, while the House of Commons Disqualification Act provides that there can be no more than 95 holders of ministerial office in the Commons entitled to vote. There is agreement on all sides of the House that the current position is outrageous and that the Prime Minister should either reduce the number of Ministers in the Commons today—he has an opportunity to do so—or introduce a Bill to increase the statutory limit to 123. Successive Cabinet Office Ministers have agreed that the position is unacceptable but then move on, having done nothing to change it. Rishi Sunak, our Prime Minister, has promised to take difficult decisions to ensure good government and the long-term interests of the country.

Personal wealth cannot be a qualification for ministerial office. I welcome the appointment of David Cameron as Foreign Secretary in this House, but it would be rather awkward if he was paid and his Minister of State was not.

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[Baroness Penn (Con)]

I will be happy to write to the noble Baroness.

We have launched a nuclear revival. The Government invested to become a shareholder in Sizewell C in November 2022 and launched a capital raise process in September this year to bring in new project finance. We have launched Great British Nuclear to drive the delivery of new nuclear technologies beyond Sizewell and to develop the latest small modular reactor technologies, and last month we announced the shortlist of companies to build the new generation of small modular reactors. Beyond the initial focus on delivery, Great British Nuclear will be available to support further nuclear ambitions. It has the statutory backing and resources behind it to deliver against its long-term operational mandate.

Through the nuclear fuel fund we will invest over £35 million, match funded by industry, to develop new domestic fuel production capabilities and to supply gigawatt reactors, SMRs and AMRs. On siting, we are developing a nuclear national policy statement that will cover the policy framework for deploying new nuclear power stations beyond 2025. As an initial step, we plan to consult on our proposed approach for determining new nuclear sites by the end of this year, with our aim to finalise a consultation on the NPS next year and complete parliamentary scrutiny to enable its designation in 2025. We will launch our consultation on alternative routes to market next month and, following our review of responses, deliver a report in 2024. I hope that responds to the questions from both the noble Lord, Lord Ravensdale, and my noble friend Lady Bloomfield, who are both great advocates for the nuclear industry. Perhaps I can write to the noble Lord, Lord Jones, to respond to his specific questions about the two sites that he focused on in his contribution.

However, we also need to recognise that data published by the Climate Change Committee shows that the UK will continue to rely on oil and gas to meet its energy needs even after the UK reaches net zero in 2050. That will include the use of gas for power generation and carbon capture usage and storage. That is why we are investing in the range of domestic energy supplies that we have available, including taking steps to slow the decline in the domestic production of oil and gas, which will reduce our reliance on hostile states and back a thriving industry in the UK that supports 200,000 jobs. It is important to recognise that the UK is a rapidly declining producer of oil and gas, and new oil and gas licences will reduce the fall in UK supply to ensure vital energy security, rather than increasing it above current levels, so that the UK remains on track to meet its net-zero 2050 commitments.

I say to the noble Baroness, Lady Blake of Leeds, that we recognise the unprecedented profits made by oil and gas producers after Russia’s invasion of Ukraine. These profits represent not a return on investment but a windfall as a result of unprovoked war. It is therefore right that we introduced the energy profits levy on those windfall profits, bringing the tax rate on the profits of North Sea oil and gas producers to 75%. By 2027 the levy is expected to raise almost £26 billion, having already generated around £5.9 billion, helping us—as I said earlier—to pay half the typical household’s energy bill between October and June.

We also want to take a fair approach to decarbonising how we heat our homes, which is why we are giving people more time to make the necessary transition to heat pumps. We have increased the boiler upgrade scheme cash grants by 50%, to £7,500, to support consumers who want to make the transition now. It is one of the most generous grants in Europe.

I reassure noble Lords that, in taking into account the changes to the boiler and electric vehicles mandate and the ongoing licensing of domestic oil and gas reserves, we are confident that we can deliver our carbon budgets and capitalise on the opportunities for green growth. So I say to the many noble Lords who raised concerns in this area that we remain completely committed to our existing targets and to meeting net zero by 2050, compatible with the Paris Agreement ambition to limit global warming to 1.5 degrees.

We will continue to listen to and engage with the expertise in this House on climate and nature. I say to my noble friend Lord Lilley that our approach will be informed by evidence, pragmatism and rational debate. Our package of proposals and policies will continue to evolve to adapt to changing circumstances, to utilise technological developments and to address emerging challenges.

But we are in no doubt about the real and present threat that climate change and biodiversity loss represent to our economy and society, and there is no change in our commitment to tackling this challenge. The UK overachieved against its first and second carbon budgets, and the latest projections show that we are on track to meet the third. We are able to quantify the vast majority of carbon savings in the late 2030s, more than a decade away.

Environment and nature are the other side of the coin when it comes to tackling climate change. I reassure the right reverend Prelate the Bishop of Norwich, who spoke so eloquently of his own work on ecology, that not only have this Government done more than any other on the environment and nature—including through the landmark Environment Act—but we remain committed to going further, through our commitment to end the net loss of biodiversity in the UK by 2030. I agree with the noble Baroness, Lady Hoey, that we need to put people and rural communities at the heart of this approach. We will not achieve this transition without the support and action of farmers and land managers.

My noble friend Lady McIntosh asked about the live animal export Bill and whether there is a means to restrict live animal imports from the EU. I say to her that there has never been a significant import trade for slaughter or fattening. For example, since 2019, only 91 cattle, 14 sheep and 20 pigs have been imported for slaughter from mainland Europe—so we do not see a pressing case to take action in this area. On my noble friend’s question about border control points, I reassure her that our new border control point at Sevington, covering the short straits, opens in April. Other border control points will open around the UK, securing our biosecurity with our new border targeting operating model.

A number of noble Lords, including the right reverend Prelate the Bishop of St Edmundsbury and Ipswich, raised concerns about the impact of recent flooding on farmers. The flood recovery framework provides funding for households and businesses affected by severe flooding, and it includes several grants and business rates relief.

I say to the noble Baroness, Lady Ritchie of Downpatrick, that I know that my noble friend Lord Caine spent several hours with her in communities affected by the recent floods. In the absence of the Executive, who could have acted swiftly, the UK Government are making money available to support those affected by floods, through the reallocation of existing funding.

I say to the noble Lord, Lord Whitty, and the noble Duke, the Duke of Wellington, who, among others, raised the reform of water regulation, that we are driving the largest infrastructure investment in water company history—an estimated £60 billion of water company capital investment by 2050—to meet storm overflow discharge reduction plan targets, which were recently expanded to cover all storm overflows in England, including those discharging to coastal and estuarine waters. But I will of course pass on to Defra the proposal from the noble Duke for the future of regulation in this area.

This brings us on to the theme of what is not in the King’s Speech, and to speak to the concerns raised by the noble Baronesses, Lady Sheehan and Lady Bakewell, around the ending of peat in horticulture. It remains our policy that we intend to legislate to restrict and ultimately ban the sale of peat and peat-containing products. We appreciate that there is good support for this from the public and from within Parliament.

I turn to the noble Baroness, Lady Sheehan, and the right reverend Prelate the Bishop of St Albans, who raised the subject of disposable vapes. The Government launched a consultation on smoking and the use of vaping earlier this month. As part of it, the UK Government and the devolved Administrations are considering restrictions on the sale and supply of disposable vapes, including prohibiting the sale of these products due to the environmental impacts that they have.

The noble Lords, Lord Whitty and Lord Livermore, and many others raised the question of employment rights. I say to noble Lords that, over the past year, we have proven our commitment to supporting workers by introducing a number of new employment rights via government hand-out Bills, including a new day one right to request flexible working; a new legal right to request predictable working patterns; additional protections for pregnant women against redundancy; a right to paid leave for employees whose child is receiving neonatal care; and a right for unpaid carers to one week of additional unpaid leave. Action is being taken in that area.

Perhaps related is the question of unpaid Ministers in this House, as raised by my noble friend Lord Forsyth. I and my noble friend the Lord Privy Seal have heard my noble friend Lord Forsyth’s plea and impressed the point at the highest levels. However, as he is well aware, the number of Ministers who are paid is set out in legislation, and to improve the lot of our Ministers who are unpaid we would need to legislate. Unfortunately, there is not currently the appetite to do that.

I turn to the remarks by the noble Lord, Lord Snape, who questioned the inclusion of the Pedicabs (London) Bill in the King’s Speech—

[Lord Forsyth of Drumlean (Con)]

I am most grateful to my noble friend. I appreciate her courtesy in referring to what I said. As David Cameron is joining the House on a salary of £106,000, can we take it that his Minister of State will be paid?

[Baroness Penn (Con)]

My Lords, I could not possibly comment on that, but I join my noble friend in welcoming David Cameron to his new post. I think we will be very pleased to have someone of such talent and experience join your Lordships’ House.

To return to pedicabs, they are the only form of unregulated public transport on London’s roads. If we could deal with it through by-laws, that would be fantastic, but in fact it takes primary legislation to deal with that issue.

Many noble Lords, including the noble Lords, Lord Birt, Lord Grocott, and others, regretted the cancellation of High Speed 2 beyond Birmingham. We absolutely recognise the need better to support critical links between and within our cities and towns, but the reality is that High Speed 2 is crowding out investment to further these priorities elsewhere across the country. We have made the difficult decision not to extend High Speed 2 and, instead, to deliver the £36 billion of savings that we have allocated to Network North, an ambitious pipeline of alternative projects. The new plan will provide direct benefits to more people and more places and will do so more quickly than the previous plan for High Speed 2.

The noble Lord, Lord Birt, raised the need to upgrade the trans-Pennine rail route, which is absolutely a priority for this Government. The upgrade programme is expected to provide an extra two trains per hour and aims to reduce journey times between Manchester Victoria and Leeds from 55 to 41 minutes. The Government have committed £3 billion to date, and an announcement on future funding will be made later this year.

To the noble Lord, Lord Jones, I say that we are delivering a £1 billion upgrade to the north Wales main line, including electrification and improving journey times to better connect Wales with London and the north-west. We will now proceed with the steps necessary to implement this, including reflecting on the existing package of legislation before Parliament, necessary consultative steps, business case development, and our parliamentary and legal and fiscal duties.

Finally, the noble Baroness, Lady Bennett of Manor Castle, asked whether I stand behind the briefing that the first models of self-drive vehicles could be offered to market by 2026 if they are proved safe. The short answer, which at this time of the night will be appreciated by noble Lords, is yes.

So, this Government have a comprehensive plan to deliver a strong economy, secure energy supplies, a state-of-the-art transport sector and a safeguarded environment. From bringing down inflation and the national debt to growing the economy and tackling climate change, we are committed to making long-term decisions for the benefit of everyone across this United Kingdom. That is what the first King’s Speech in many a generation delivers, and I commend it to the House.

Bank Accounts

Lord Forsyth of Drumlean Excerpts

Wednesday 19th July 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, it is important to distinguish between any action that may have been taken on freedom of speech grounds, or on the grounds of people’s political views, and the PEP regulations, which are to do with people’s status as politically exposed persons. However, the noble Lord is right, and we have discussed this issue in the House many times: the banks have not always applied those regulations and guidance as they should. That is why we had two amendments to the Financial Services and Markets Act to take action in this area, both to amend the regulations and for the FCA to review its guidance and the banks’ adherence to it. My right honourable friend the Economic Secretary has written to the FCA again recently to reiterate the importance of that review and to say that, if any action can be taken during the conduct of that review, we will expect that to happen also.

[Lord Forsyth of Drumlean (Con)]

My Lords, I declare an interest as the chairman of a bank. I also have an account with Coutts Bank—although, by the way, I have nothing like the wealth that has been mentioned. I point out to my noble friend that Coutts Bank is owned by NatWest, and the largest shareholder in NatWest by a long way is the Government. Should the Government, as a shareholder, not say to NatWest that this kind of conduct is unacceptable? Also, what is the FCA doing? On the basis of what we read in the newspapers, Coutts Bank has been in breach of rule 4, which requires it to treat customers fairly.

[Baroness Penn (Con)]

My Lords, as my noble friend has noted, the Government have a shareholding in NatWest Group, but it is managed at arm’s length and on a commercial basis by UK Government Investments and I do think that is the right approach. My noble friend also noted the role of the FCA. He is right that it is for the FCA and other relevant independent bodies to determine whether any breach of regulatory requirements has taken place—so I will not comment on that, but I would expect them to do so.

Bank of England: Interest Rate Policy

Lord Forsyth of Drumlean Excerpts

Wednesday 12th July 2023 Lords Chamber

Asked by

[Lord Forsyth of Drumlean]

To ask His Majesty’s Treasury what assessment they have made of the impact of the Bank of England’s interest rate policy.

[Lord Forsyth of Drumlean (Con)]

My Lords, I declare my interest, as in the register, as chairman of a bank.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

My Lords, we constantly monitor the UK economy’s performance and outlook, and we acknowledge the pain that rising interest rates are causing for many households. However, setting interest rates is the responsibility of the independent Monetary Policy Committee of the Bank of England. The Government do not comment on the conduct or effectiveness of monetary policy. We will continue to support the MPC as it takes action and focuses on making the tough decisions necessary to tackle inflation.

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[Lord Forsyth of Drumlean (Con)]

My Lords, I fully understand the need to respect the independence of the Bank of England, but that it is not the same as denying it being subject to proper accountability. The Bank of England was responsible for a huge increase in the money supply through quantitative easing—which resulted in part in the inflation that we are now experiencing—despite warnings from Andy Haldane, its chief economist at that time, that that would result in inflation. Andy Haldane is now suggesting that there may be an overreaction and overcorrection in putting interest rates up to the extent that they are being. This will cause misery to millions of people. The Bank of England should surely be accountable for this.

[Baroness Penn (Con)]

My Lords, I agree with my noble friend that the Bank of England should be and, indeed, is accountable for the decisions that it makes, but it is not for government to comment on the conduct or effectiveness of monetary policy. He is right that high levels of inflation and, therefore, high interest rates, are causing pain. That is why the Government are taking action to support people at this difficult time, including the mortgage charter, agreed by my right honourable friend the Chancellor, that covers around 90% of the market and gives people options when they are facing higher mortgage rates to make sure that their payments continue to be affordable.