The Lord Speaker (Baroness Hayman): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the Child Maintenance and Other Payments Act.
Lord Davies of Oldham: My Lords, the Government are committed to ensuring that the UK tax system is internationally competitive. We are reviewing the taxation of foreign profits closely with business in considering possible reform. UK businesses benefit from one of the largest double tax treaty networks in the world. The recent cut in the UKs corporation rate supports the UKs beneficial position. The Government recently established a forum for multinational business to discuss the long-term challenges facing the UK tax system.
Lord Roberts of Conwy: My Lords, I thank the Minister for that reassuring reply. Why have the Government embarked on this overhaul of multinational company taxation when they must have known that it might cause an exodus of companies to more tax-friendly countries? Is this another example of the Chancellors somewhat faulty judgment?
Lord Davies of Oldham: My Lords, the Government embarked on the process because business pressed them to review aspects of business taxation. We set out our consultation document last year and we will continue those discussions. We have not made up our minds about taxation of foreign profits at present. We are clear on making sure that our taxation remains competitive and the House will be all too well aware of the fact that our corporation tax rate is the lowest in the G7.
Baroness Noakes: My Lords, the Minister has again trotted out the comparison with G7 rates of tax, but we know, and I am sure he knows, that on all other comparisonsthe OECD, the EU and so onwe compare very badly. When will the Government accept
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Lord Davies of Oldham: My Lords, if the Opposition are dropping into the facile position of comparing the UK economy with, for example, Ireland, which has been much in the press recently, the Government and I can cite only the G7 countries, because those are the significant economies and Ireland is very different. It has a much, much lower corporation rate, but it has a different tax system and an entirely different economy from that of the United Kingdom, so it is not a fair comparator. What is clear is that our take is below the overall average OECD corporation tax rate, so the figures that I am quoting are relevant to a significant economy such as the United Kingdoms.
Lord Newby: My Lords, does the Minister agree that the remit of the forum to which he just referred, which was set up to look at long-term taxation for foreign earnings, has been changed to dig the Government out of the hole into which they have fallen by putting out a consultation document that could have serious implications for the headquartering of multinational companies based in the UK? Will he tell his colleagues in the Treasury that, before it issues consultation documents that imply government support, it should informally discuss the likely consequences with those who are most affected, rather than being forced into a public humiliating back-down, as has happened in this case and in the case of the non-doms, when the real consequences of what it proposed come into the public domain?
Lord Davies of Oldham: My Lords, as I have indicated, the Treasury produced its document in relationship to business pressure and indicated that it was a consultation document, as the noble Lord has fairly said, on the long term. A considerable range of issues will therefore be raised. The Government strengthened the position by bringing together the multinational business forum, of which, I might add, the director of the CBI is also a member, to consider these issues in the round. It is a consultation process; the Government are not committed to a particular position. I accept that we have said that we intend to ensure that any changes will be neutral in terms of revenue.
Lord Davies of Oldham: My Lords, private equity is a specific-dimension issue at this point and, in the case that my noble friend has identified, relates rather more to personal taxation, when the question and all the issues that we are discussing in consultation are about business taxation. He has, however, highlighted a point that caused great concern across the nation when it was revealed in the way it was last year.
Lord Trimble: My Lords, I fear that the Minister deceives himself when he draws the comparison that he did with Ireland. He leaves out of the account the fact that Ireland is so close to us that we share a land frontier with it. It also shares the same business and legal structures as ours. There is plenty of evidence that firms are attracted to other places, particularly when we bear in mind that financial firms can transfer easily to them. Ireland is not the only place in the world with corporation tax rates at or just above 10 per cent. The Government will have to look again at this very carefully before our economy suffers.
Lord Davies of Oldham: My Lords, the noble Lord is right that there are other countries, apart from Ireland. The average rate of those that have recently joined the European Community is considerably lower than the British rate, but we do not expect large numbers of multinationals to relocate to places such as Sofia or Bucharest because there are other factors. When one looks at where business locates, business taxation is only about the sixth consideration. There are many other reasons why headquarters are established in a particular country. That is why, as the noble Lord has indicated, Ireland has enjoyed a signal advantage in taxation over many years. There is no flood of companies eager to locate from London to Dublin.
Lord Kilclooney: My Lords, is the Minister aware that, much as the Republic of Ireland has something in common with the United Kingdom, none the less it has a different currency and its economy now has great problems? Attractive as lower corporation tax is, Ireland now finds it very difficult to export to the United States and the United Kingdom. The euro is damaging its exports.
Lord Davies of Oldham: My Lords, the noble Lord is very knowledgeable about Irish matters. I raise the issue only because that has been the current illustration in the press; that is, the so-called potential flight of companies and their headquarters from the UK to Ireland. The noble Lord is right: the Irish economy is vastly different from the UKs economy. I mentioned the issue with regard to our treaties on taxation, which are of great importance to the security of business when it is dealing with other countries. Those bilateral agreements are as extensive in the United Kingdom as in any country in the world.
What information they are providing to private and social landlords about their obligation to provide an energy performance certificate for rental properties on change of tenancy; and how assessments of energy performance will be made in buildings with communal services.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My Lords, guidance for landlords will be issued imminently and has been discussed in detail with a stakeholder forum. A national print and advertising campaign will commence this month. Energy performance certificates for buildings with communal services will be carried out by an accredited assessor.
Baroness Gardner of Parkes: My Lords, I thank the Minister for that reply and I declare an interest as a landlord of long standing. What will be the benefit of these new certificates to landlords and tenants and what form will they take? Will they show a percentage of efficiency or will they be like the efficiency labels that come when you buy a fridge or a washing machine? How easy will they be to understand? Will they simply tell you that your windows should be double-glazed?
Baroness Andrews: My Lords, the benefits to landlords and tenants will be warmer properties and lower bills. The properties will be easier to market and tenants will know what they are renting in terms of the costs to run the home. There is a real benefit. The certificate will have an A to G rating to indicate the efficiency of a home. It will also tell you what you should do to improve the ratingfor example, install loft insulation. There is a landlords energy savings allowance to help landlords who pay income tax to offset some of the costs of improving energy efficiency.
Baroness Trumpington: My Lords, are listed buildings at a disadvantage? Will the flat or apartment at the top of a listed building or any large block of flats be disadvantaged because of heat loss through the roof?
Baroness Andrews: My Lords, I am fairly certain that listed buildings will not be made an exception, although I concede that sometimes it is quite difficult to make energy efficiency recommendations for them, simply because, for example, one has to be careful about not putting in plastic window frames and so on. The top floor of communal blocks of flats would be subject to the leasehold or the freehold and there would need to be agreement between tenants on insulation. So there are issues to be addressed.
Baroness Hamwee: My Lords, the noble Baronesss Question refers to buildings with communal services. On a positive note, what pressure can leasehold owners of flats in, for example, mansion blocks put on landlords and property owners to make improvements in energy performance? What incentives will be given to the owners of properties to achieve an improvement in performance, rather than simply having a piece of paper?
Baroness Andrews: My Lords, I think that they will be subject to the same market incentives that I described earlier. The landlord has to face the possibility that, after 1 October this year, the first new tenant will have to have an EPC. There will be a penalty charge if that is not provided. Obviously, trading standards officers
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Lord Elton: My Lords, the noble Baroness will recall that there have been a number of instances where listed building regulations have been in conflict with natural environment regulations, on one occasion stultifying changes until the building actually fell down. Can the Government assure us that there will be a proper relationship between the listed building regulations and the regulations on heat loss and so on, so that the same thing does not happen in this field?
Baroness Andrews: My Lords, there is always a tension between what we want to achieve for listed buildings and in conservation areas and what we want to achieve on carbon efficiency or disabled access, for example. I would prefer to write to the noble Lord to explain how we are going to manage those situations and put a copy of that letter in the Library.
Baroness Andrews: My Lords, it is important to be clear about this. An EPC will be needed only when a rented property is marketed to a new tenant after 1 October 2008. The EPC will last for 10 years, so there will be no need to renew the certificate every time there is a change of tenant and no need to do so even if the lease is renewed and there is no change of tenant. I hope that noble Lords are clear about that.
Lord Redesdale: My Lords, the problem with a lot of private tenancies is that tenants who rent at the lowest end will have the highest fuel bills because those private landlords will have done little to make their houses fuel efficient; it is a nasty circular argument. What are the Government doing to make sure that the information from the EPC is passed on to the tenants so that they realise that their bills are higher if the insulation is poor? The present situation, where the EPC is not passed on by estate agents to people buying properties, is a major flaw in the system.
Baroness Andrews: My Lords, the noble Lord raises an important point. We are working with tenants organisations to ensure that information goes out to tenants as well as to landlords. I should add that, at a time of rising prices, which we are all concerned about, we have an efficient and comprehensive fuel poverty schemein fact, it is the only one of its kind in the worldunder which there is assistance for tenants.
Lord Lawson of Blaby: My Lords, what is the total cost to private citizenry, buyers and sellers, of this absurd nanny-state intervention? Does the Minister
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Baroness Andrews: My Lords, the cost of climate change is higher by any standards in comparison with what the noble Lord has said. We estimate that the cost of an energy performance certificate, which of course is market-driven, will be between £40 and £100. I do not think that that is a high cost when the savings that can be achieved are estimated to be about £300 a year. The certificate will pay for itself.
Baroness Thornton: My Lords, health professionals have a duty to ensure that they work within safeguarding law as well as professional codes. For women who have undergone female genital mutilation, it is normally expected that information is shared with others, with the womans consent. When FGM comes to the attention of any professional, consideration needs to be given to any child protection implications, for example younger siblings and members of the extended family, and a referral made to social services or the police if appropriate. Indeed, under the Children Act 1989, everyone with information that a child is potentially or actually at risk of significant harm must inform social services or the police.
Baroness Rendell of Babergh: My Lords, I thank my noble friend for that Answer. Is she aware that estimates of the number of women involved and their geographic location made by agencies all over the country are necessarily based on estimates, so the figure of just under 270,000 may be very wide of the mark? Can she ask if the Government would fund a confidential inquiry, possibly done by a university, to establish the number of cases of FGM and other significant data such as the geography of its occurrence? Does she agree that this would be of great benefit to health professionals, so that difficulties in gynaecological examination, notably the use of the speculum, could be anticipated and a womans fears allayed? The data might also be of benefit to the police in bringing forward prosecutions; there have been no prosecutions under the 2003 Act, which is now five years old.
Baroness Thornton: My Lords, I commend my noble friends record on this issue and record the debt of gratitude that we owe to her persistence in pursuing it with other Members of the House who have been active in this regard over many years. The Department of Health has commissioned research on
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Lord Walton of Detchant: My Lords, does the Minister accept that there were for some years unsubstantiated rumours to the effect that certain doctors serving immigrant communities were prepared to carry out so-called female circumcision? I am sure she is aware that the Police and Criminal Evidence Act 1984 makes it quite clear that it is appropriate for a doctor to breach medical confidentiality to aid the police in the investigation of a grave or serious crime. Does not she therefore agree that this illegal act of genital mutilation is a serious crime and that any doctor thereby disclosing this information to the police, without consent, would not be in breach of the law?
Baroness Thornton: My Lords, the noble Lord is right: doctors are bound to release such information to the policeof course they are. As well as pursuing a legal framework around domestic violence and child protection it is very important that we work with the communities where FGM may occur. That is why initiatives such as the Metropolitan Polices Project Azure and financial support for the FORWARD organisation, which is campaigning on this issue, are also very important.
Baroness Tonge: My Lords, I was a member of the all-party group in the other place that investigated female genital mutilation way back in 1998. Despite its very comprehensive report and the renewal of the original 1985 Act of Parliament in 2003, there have still not been any prosecutions for female genital mutilation practised either in this country or on our citizens who go abroad for this horrendous operation. I appreciate that it is a desperately sensitive and difficult issue, but does not the Minister agree that until we have a well publicised prosecution of someone who has committed this act we shall not get any real progress?
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