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Lord Hanningfield: I thank the Minister for that very full and detailed reply. He referred to many areas covered by my series of amendments. However, he did not mention the cost at all. That needs to be assessed. He mentioned such matters as training for officers, but there will be some costs to local authorities. Local authorities will want to ascertain what the costs will be as that will be part of the bid in the revenue support grant for local authorities. We shall read the Minister's reply, and we may return to some areas later. However, perhaps the Minister could give his views on where the money will come from. The more we talk about it the more it looks as though it will cost money and that money has to come from somewhere.
Lord Rooker: I had not actually finished my reply. I gave way, but I had not yet reached Amendments Nos. 35 and 38. I was making a concession. I moved back from the Dispatch Box and the noble Lord must have thought that I had finished. I shall not be accused of missing out amendments, although I do not have the full answers to the money issue. It is a little early in the Committee stage for us to come forward with the
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money for this. I am not saying that I shall be able to do so tomorrow, but if I can give an indication of the figures tomorrow, and if it is appropriate, I shall do so. I shall be brief, as I understand that other noble Lords have not entered the Chamber to speak on the Housing Bill.
Amendment No. 35 would enable a local authority to seek the guidance of the appropriate national authority on any of the requirements of this clause. The appropriate national authority fully intends, using its powers in Clause 8, to give comprehensive guidance to local authorities on the exercise of their functions under Part 1. I suggest, therefore, that the amendment is unnecessary.
Amendment No. 38 would appear to be intended to require the appropriate national authority to give guidance specifically on whether an undertaking, such as I have described, has been breached. Guidance will cover the full range of local authority functions, so we believe that the amendment is unnecessary.
It is a massive, bold commitment on behalf of the Government. The Government are committed to meeting the local authority start-up costs. That is fairly significant. At the moment we are discussing with the Local Government Association and the Chartered Institute of Environmental Health what costs will be covered. Our estimate at present is some £5 million. That may not sound much, but we are changing the situation. Professional officers are already in place undertaking many of those functions. There is a new system and training will have to be undertaken for that new system, but our estimate is about £5 million. We are in discussion with the Local Government Association. There is a well defined procedure for new burdens on local authorities. I understand that the new burdens requirements are quite rigorously enforced so that local government is not short-changed. As I say, the present estimate is £5 million.
Lord Hanningfield: I thank the Minister for a very comprehensive reply to that long list of complicated questions. I am pleased that he acknowledged that the Government will meet the start-up costs of approximately £5 million. There will be ongoing revenue costs and no doubt we shall come to those later in considering the legislation. I shall analyse the Minister's replies. I believe that we shall require further discussions as the Bill proceeds. With that, I beg leave to withdraw the amendment.
I shall also be addressing the issues raised by the report of the Economic Affairs Committee on the Finance Bill 2004 and of course I shall respond to any points made on those issues in any concluding remarks.
Since 1997, Britain has sustained growth through two economic cycles. In addition, this period of sustained growth has been combined with low inflation, low interest rates and the lowest levels of unemployment for a generation. Over 1.8 million jobs have been created, while claimant count unemployment has fallen by more than 800,000, remaining consistently below 1 million since February 2001.
In his Budget speech in March the Chancellor of the Exchequer renewed the Government's commitment to monetary and fiscal discipline and economic stability. The Government remain on track to meet their fiscal rules over the next five years.
The Government are also making savings on debt interest and unemployment, helping us to meet our fiscal rules, keep taxes low and spend more on vital services. These strengths mean that the Government are in a position to invest morenot lessin public services that matter most to the people of this country. Those areas will enable the United Kingdom to grow and prosper in the global economy of the future. The Finance Bill builds on our successes, it strengthens and modernises the economy and helps to prepare the United Kingdom for the challenges of the future.
The Government are committed to delivering world-class public services, offering opportunity for all. We will drive forward with investment in essential public services, while continuing to strengthen the United Kingdom economy, to support a fairer society with stronger communities and to promote stability and prosperity around the world.
Last week the Chancellor of the Exchequer announced that current spending will rise by an average of 2.5 per cent in real terms across 200607 and 200708. In this spending round, three-quarters of spending will go to vital front-line services. So while overall spending rises by just 2.8 per cent, departmental spendingspending on vital serviceswill have a real terms rise of 4.2 per cent over the next three years. UK education spending will rise to 5.6 per cent of GDP by 200708 from 5.4 per cent in 200405. We will invest more in our children to build on our improvements to the United Kingdom's education system, including a new determination to make pre-school provision for the under-fives as well as childcare available to all.
The five-year settlement announced in the 2002 Budget for health and the increased resources announced in the spending review this year mean that overall health spending will grow to £92 billion in 200708, compared
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with £33 billion in 199697. We will also continue our long-term investment in our infrastructure, particularly in transport and housing. The housing budget in England will rise from £5.9 billion this year to £7.2 billion by 200708, a 4.1 per cent annual real terms rise. That will fund a major programme of investment in affordable and social housing in order to tackle the long-term under-investment and neglect of housing. That is vital to economic prosperity and our quality of life.
Spending on transport will grow on average by 4.5 per cent in real terms over the three-year period from 200506 to 200708. This is an ambitious programme of investment and reform that will deliver greater opportunities, expand choice and help reverse the legacy of under-investment in public services.
The Government's spending plans will help to equip Britain to meet the global challenges of the future. Productivity is the key to delivering sustained and balanced growth across the United Kingdom. In order to raise productivity levels, the Government will continue to promote competition within the economy, to support business and entrepreneurship and to raise the United Kingdom levels of skills and training.
Alongside the spending review the Government also published a 10-year investment framework for science and innovation, with the aim of making Britain the best location for science and innovation in the world. So we will not cut the science budget but increase it in average annual real terms by 5.8 per cent, a doubling of cash spending on science since 1997. We have set ourselves the ambitious target to raise overall research and development spending in both the private and public sectors from 1.9 per cent of national income to 2.5 per cent by 2014.
The Finance Bill builds on our successes in supporting economic stability and sustained economic growth. It introduces a number of new measures to support entrepreneurship and businesses. Clauses 38 to 46 will continue the Government's reform of corporation tax, extending corporation tax relief for the expenses of managing investments to companies with investment business, providing greater certainty for companies in relation to their expenditure.
Clauses 93 and 94 introduce further improvements to the enterprise investment scheme and the venture capital trust scheme. Clause 141 will strengthen the research and development tax credit, widening the definition of "qualifying costs" to include costs of computer software, water, fuel and power directly employed in research and development. Clause 142 will encourage investment by small businesses by increasing the rate for first-year capital allowances for small businesses' spending on plant and machinery from 40 per cent to 50 per cent for one year.
An important part of creating a fair society is to have a fair taxation system. The Government are determined to close down the opportunities for tax evasion and to ensure that everyone pays his fair share. The Finance Bill includes a number of measures to deliver that objective. Clauses 306 to 319 provide new disclosure obligations on promoters who market certain tax schemes, ensuring greater transparency in
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the tax system and reducing the number of contrived tax schemes used to avoid tax. Clause 19 introduces a parallel disclosure measure to help counter the avoidance of indirect taxes.
In order to discourage the self-employed from incorporating solely for tax advantages, Clause 28 introduces the non-corporate distribution rate of corporation tax, ensuring that when profits are distributed to non-company shareholders, some or all of the company's profits are charged at a minimum rate of 19 per cent, thereby protecting low rates of tax for those companies that are investing in growth.
As a part of an enhanced strategy to combat spirits fraud, in Clause 4 the Government introduce duty stamps for spirits from 2006. Clause 84 introduces an income tax charge on previously owned assets in order to reduce unfair tax avoidance through the use of trusts.
There has been some criticism of the length of this year's Finance Bill. Yet the Government's pension simplification proposals, which make up some 170 pages of the Bill, actually remove over 350 pages of complex legislation and sweep away nearly 1,000 pages of guidance. Clauses 149 to 284 constitute a radical simplification to one of the most complex areas of the tax system. They introduce a single set of rules for all tax privilege pension schemes; they streamline the registration process for new pension schemes; and they allow for greater flexibility for around 15 million pension savers.
This is a modern and progressive Finance Bill. It is realistic about the challenges this country faces in competing with the world economy. The measures to create fairness in the tax system and in the wider economy will ensure that more people will be able to benefit from our economic strengths. The Bill maintains the principles of stability and economic growth which underpin an enterprise economy that supports fairness and opportunity for all to enjoy increasing prosperity. I commend the Bill to the House.
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