Finance Bill

Lord Shipley Excerpts

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

[Lord Shipley (LD) [V]]

My Lords, I will speak about stamp duty and the temporary change in policy being introduced. It is estimated that there could be 100,000 extra house sales in the next nine months. I accept the importance of that in reviving the housing market. When people move homes, they generate sales of fittings and materials for those new homes, which is an additional benefit. But I hope the scheme will not be extended in its current form after 31 March next year and that the opportunity is taken to learn from the experience of the next few months. There are two reasons for saying this.

First, it will not solve the housing crisis, which is primarily about a lack of supply, particularly of low-cost housing for those on lower incomes. There is a real risk that this change will just lead to more competitive bidding and sale prices higher than they would have been. I ask the Minister specifically why the Government have included second homes in this policy change. It seems a very strange subsidy, albeit a temporary one, even though the 3% additional homes levy still applies. Why have the Government included second homes, when buying a second home reduces opportunities for local first-time buyers?

This new policy will not help those who cannot afford to buy a house in the first place, nor will it help many first-time buyers get a mortgage, since banks and building societies want a 15% deposit. There is an additional danger that buy-to-let landlords will outbid first-time buyers and push up prices. There are 9 million people on furlough, who could find it hard to move anyway. What assessment have the Government made of the fact that many households will not be able to take advantage of the reduction in stamp duty anyway? The supply of low-cost homes for sale and rent to low-income earners really matters, and I see nothing in this proposal that will address that.

Might the Government look again at two related issues? The first is the question of who benefits from increasing land values, which can result from planning permission, and how that financial gain could be used differently for the support of more low-cost housing. Secondly, will they look again at why 70% of new housing supply lies with 10 developers, and what might be done to broaden the number of builders and thereby increase supply?

Covid-19: Economy

Lord Shipley Excerpts

Thursday 4th June 2020 Lords Chamber

[Lord Shipley (LD)]

My Lords, it was reported yesterday that the US economy will take 10 years to recover from the pandemic—that is according to US government analysts. We know that something similar is likely for the UK. Our economy is in a state of shock, and it is estimated that Covid-19 could reduce GDP by well over 10%. To make matters worse, the Government seem intent on risking a no-deal Brexit, which could result in a further 5% long-term reduction in the UK’s GDP.

We are suffering from an acute lack of leadership as the Government pretend that they can solve both problems at the same time. They cannot. It is dangerous to expect British companies trying to save and restore their businesses in the wake of the pandemic, which is not over, to cope with the additional complexities of a new trade agreement—or no agreement at all—which would need to be implemented at very short notice. The Government should request an extension to the 31 December transition period deadline.

On the impact of no deal, the Government should heed the warnings of Nissan, which is keen to continue car production in Sunderland. Its global chief operating officer said yesterday morning that if the company is

“not getting the current tariffs, the business will not be sustainable.”

That is what everybody has to understand. Can the Minister say whether the Government understand that?

We have learned a lot from the impact of the pandemic, not least that we are too reliant on global supply chains and need to be more self-sufficient. I am thinking of more local food production to reduce dependency on imports; the supply of energy, where major investment in renewables would boost the economy; and more local manufacturing in areas that have been traditionally been manufacturing centres. Achieving all this needs the Government to think in terms of places and how they can be helped to produce more.

Income Equality and Sustainability

Lord Shipley Excerpts

Wednesday 6th May 2020 Lords Chamber

[Lord Shipley (LD)]

My Lords, I congratulate the right reverend Prelate the Bishop of Derby on her excellent maiden speech, and thank the most reverend Primate for all his work in support of this House, but particularly for his tireless campaigning on issues of financial inequality, debt, poverty and homelessness over many years.

Recent data from the Office for National Statistics has shown that people living in more deprived areas have experienced Covid-19 mortality rates of more than double those for people living in less deprived areas. A postcode lottery of morbidity is unacceptable, and the Government simply must tackle the fundamental inequalities that have put some people at greater risk.

A briefing I received from Citizens Advice in Newcastle earlier this week made several proposals that I hope the Government will adopt to assist households as temporary financial interventions are reduced. It suggests that there should be no sudden cut off to the job retention scheme or the income support scheme, and that there should be long-term increases in the safety net provided by universal credit because many people will find it hard to get back to work when lockdown ends. There should also be a recognition that further extensions may be needed for existing mortgage and debt holidays, and it proposes a coronavirus financial hardship fund, which would be different from universal credit in that it would help people facing sudden essential costs, through a grant or a loan. These proposals seem wise. We should remember that furloughed workers on low pay have had a 20% cut to their incomes.

I was a signatory to the recent call to prevent disadvantaged children falling behind in their learning by means of extra tuition through a catch-up premium for their schools. I hope the Government will understand the vital importance of this, to reduce educational inequalities.

Budget: Economic and Fiscal Outlook

Lord Shipley Excerpts

Tuesday 5th May 2020 Lords Chamber

[Lord Shipley (LD)]

My Lords, eight weeks ago, several important announcements were made in the Budget about infrastructure investment. There was to be a significant rise in borrowing to fund this, to be paid for by future growth. That Budget was said to represent an end to austerity.

Just eight weeks later, the Government are paying the wages of 6 million people, with one in four employees in furlough. The Chancellor has said there is “no limit” to the funds available in the face of the OBR forecast that the economy could shrink by 35% in the second quarter and by 12.8% for 2020 as a whole. We now know that the Government might borrow £273 billion this year—the largest annual deficit since 1945. How do they plan to pay for this underpinning of our economy in the face of declining tax revenues? Will it be simply through anticipated growth?

I would like to ask the Minister three further questions. First, he referred to the Prime Minister’s promise of a levelling-up agenda for the whole country. I would like to suggest that this should mean investment in our domestic manufacturing base in the face of a likely decline in global supply chains, as well as the need for greater security of supply. Will the Government confirm that they will still rewrite the Green Book rules to help those places where growth and productivity are lower?

Secondly, we seem to be witnessing the closest working between the private and the public sectors since 1945. Does the Minister accept that government support must carry on after lockdown ends? Enabling the economy to recover will inevitably be a gradual process and, crucially, the Government must protect the job retention scheme beyond the end of June, otherwise it will become in effect become a scheme that just delays redundancies.

Thirdly, I should like to ask about Britain’s future debt levels, which will shortly stand at 95% of GDP. Coronavirus could well cause a reduction of 10% in our GDP and there is evidence that a no-deal Brexit could add an extra long-term loss of a further 5%. How will the Minister respond to this and does he accept that a no-deal Brexit is not in this country’s economic interests.

In conclusion, I have two further points. Will the Minister undertake to look at the merits of municipal bonds, which could help in the current situation, and might the Government consider allowing the state to take a bigger share of land value uplift when planning permission for housing is granted? If they did, I think that would help the public finances.