Income Equality and Sustainability

Lord Balfe Excerpts

Wednesday 6th May 2020 Lords Chamber

[Lord Balfe (Con)]

My Lords, I also congratulate the most reverend Primate the Archbishop of York on securing this debate. I draw attention to my interests in the register.

I must start by mentioning that a basic income, an idea which has come up from time to time, has been trialled in Finland, where the trial was abandoned. It would be good to look at why that was before we go too far.

I want to talk about what I see as the real scandal: the perception that those right at the top end of the economy do not need to pay much in the way of tax. I read in today’s Times, for instance, that Deloitte has 669 partners in Britain, who earned an average of £882,000 each last year. In another, quite separate story, I read that the boss of Ocado was paid £59 million last year, and that the finance chief and the chief operating officer, somewhat more humbly, got only £14 million each—of course, the business recorded a loss of £214.5 million. When people read these mind-boggling figures they wonder where, at the bottom end, they are going to exist.

I am pleased that, when I was chair of the finance committee of the Reform Club, I managed to bring in the London living wage. It is still paid there. However, we need to look at how we can benefit people at the bottom of the scale and how we can get fair tax out of the people in the middle. When people see Sir Philip Green flying in from Monaco, or Richard Branson on his island in the West Indies, they are rightly very cynical. My message is that we need to get together with people, and internationally, to tackle the tax havens and the many ways in which it is possible to hide or move income. It is not tax evasion; it is tax avoidance, by transferring money to the most beneficial regime. In the same way, some companies transfer their rights to Luxembourg, and thereby reduce the amount of tax that they have to pay in the UK.

I therefore ask the Government to look at ways of co-ordinating international action with the OECD, the European Union and others, to close the tax havens in the Channel Islands, Monaco, Panama, the Virgin Islands and the like. We really must start to tackle these abuses, which I believe underscore the way in which people see unfairness in society. If we are to have a fair division of income, we have to start tackling those people who believe that they are above income tax law.