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Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for the question. I understand that South Kensington station has been the subject of protracted disputation over several years. My current understanding is that London Underground Ltd wishes and needs to upgrade the station and therefore an improvements programme is being prepared, which is scheduled to start towards the end of 2009. The programme is likely to comprise the partial enlargement of the ticket hall; the provision of step-free access, such as lifts for those with a mobility impairment; the

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construction of an elevated walkway above the District and Circle lines, linking the ticket hall; the refurbishment of existing elevators; and a general redecoration of the station. I also understand that it is consulting on wider redevelopment outside and above ground, involving part of the station building, which is grade 2 listed. That consultation is being undertaken in conjunction with the local Royal Borough of Kensington and Chelsea.

Lord Berkeley: My Lords, one of the ODA’s original policies was to have a green Olympics, with as much passenger transport not by car as possible, including cycling and walking. There was originally a major plan of new cycle routes and walkways to the Stratford Olympics. Is that still there and will it be retained?

Lord Bassam of Brighton: My Lords, as I understand it, the green transportation plan is very much in place. We are happy with how the transport plan is progressing. My understanding is that in 2012 there will be 10 railway lines, with one train every 15 seconds serving the Olympic Park. That is 240 trains an hour, making Stratford one of the best-connected locations in the world. That gives a flavour of how people will travel to the Olympic Games.

Viscount Montgomery of Alamein: My Lords, the London Underground has an extremely efficient executive, but the biggest constraint on it developing its extensive underground plans is finance. Can the Government do anything to increase the finance coming to the London Underground executive, via Transport for London, to ensure that the plans outlined are executed and, indeed, increased?

Lord Bassam of Brighton: My Lords, I recently answered a Question on that point and indicated clearly that finance is in place and that there is an agreed programme. Great progress is being made by Tube lines and Metronet, which has now been taken into Transport for London, towards completing the refurbishment programme for all Tube lines and railway stations.

Baroness Thomas of Walliswood: My Lords, perhaps the Minister has not been in South Kensington Tube station in recent years. I can tell him that it is chaos on wheels. Platforms are extremely crowded, partly because there are large scaffolding constructions all the way down them, taking up a great deal of room. If we are going to sort it out in time for it to be feasibly used for the Olympics, we have to get cracking much faster than the Minister is suggesting.

Lord Bassam of Brighton: My Lords, I have visited the Tube station in recent years, on my way to one of the museums, which I greatly enjoy. I understand that each year some 30 million people pass through the station, about one-third of them going to the museums. Of course we want Transport for London to carry out upgrades. As I outlined, it has a plan in place to start carrying out refurbishments by the end of next year.

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Earl Attlee: My Lords, which London Tube lines are already running over capacity during the morning peak?

Lord Bassam of Brighton: My Lords, the brief I was given addressed the issue on the Order Paper. I apologise for not having infinite wisdom on this matter. Clearly the noble Earl’s question fully deserves an answer; he will be provided with one in writing.

Lord Broers: My Lords, will these transport plans be completed in time for full-scale rehearsals to take place. Also, will the scheme of using public volunteers to guide people to transport be utilised? Both those schemes were behind the success of the transport system at the Sydney Olympics.

Lord Bassam of Brighton: My Lords, I am sure that is part of the plan. As I understand it, in its recent assessment, the International Olympic Committee was satisfied that the ODA was well on track not only to securing a good transportation plan, but to putting all the other parts of that scheme in place. Sydney was a good role model both in how the Games worked and how people travelled to watch them.

Lord Forsyth of Drumlean: My Lords, perhaps I misheard, but I think the Minister indicated that there would be a train every 15 seconds. Could he explain how people will be able to get on and off in that time?

Lord Bassam of Brighton: My Lords, I suppose the short answer is “quickly”. Perhaps if the noble Lord had listened a little more closely he would have heard me also say that this involved 10 different railway lines.

Afghanistan: Helicopters

3.23 pm

Lord Astor of Hever asked Her Majesty’s Government:

The Parliamentary Under-Secretary of State, Ministry of Defence (Baroness Taylor of Bolton): My Lords, I am sure that the whole House will join me in offering sincere condolences to the families and friends of Warrant Officer Dan Shirley and Lance-Corporal James Johnson, who were killed on operations in Afghanistan this past weekend.

In March 2007, the Prime Minister and the Secretary of State for Defence announced that we would be investing in additional support helicopters, purchasing six Merlins from Denmark and modifying eight Chinook HC3 helicopters to a support role. This work continues to progress as planned. On 20 May this year, a Written Statement was made to update the House on helicopters on operations.

Lord Astor of Hever: My Lords, on these Benches we also send our condolences to the families and friends of the two soldiers whom the noble Baroness mentioned. On a happier note, I am sure that I speak for the whole House when I wish her a very happy birthday.

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A large majority of the recent deaths in Afghanistan have been from roadside bombs. The families of these casualties are entitled to ask whether lives are being lost because of a chronic shortage of helicopters, leading to the use of high-risk vehicles on the ground. Does the Minister not recognise that the Government’s decision in 2004 to cut the helicopter budget by £1.4 billion was absolutely inexcusable? These young men and women who engage on our behalf in a vicious war in Afghanistan deserve maximum support. What are the Government’s plans to provide them urgently with more airframes, more pilots and more local ground support?

Baroness Taylor of Bolton: My Lords, I thank the noble Lord for his first comment. He is right that there have been a significant number of deaths recently. That is regretted by the whole House. He is not right to suggest that there is a link between the ground vehicles that we have and the helicopters, in terms of what will be transporting people in these circumstances. We have to have a range of transport available and commanders on the ground have to judge, in difficult circumstances, what is the most appropriate vehicle and whether it is appropriate for people to be moved in helicopters. Helicopters cannot be used for all types of movement. They would not be the appropriate means of transport for people engaged in patrols or dealing with local communities. Such decisions have to be taken on the ground. We are supplying more helicopter flying hours than ever before; there has been a 30 per cent increase in them since March 2007.

Lord Lee of Trafford: My Lords, these Benches wish to be associated with the earlier tribute. Why has it taken the Government so long to recognise the vital need to increase the size of the Army and the importance of helicopters, perhaps at the expense of expenditure on heavy armour and artillery?

Baroness Taylor of Bolton: My Lords, it is clear that we need to strike a balance and to spend on a variety of fronts. We have put a lot of money into personal and vehicle protection, and, as I have just mentioned, we have increased helicopter flying hours in Afghanistan by over 33 per cent. We are investing £6 billion in helicopters over the next 10 years, which is £1 billion more than was anticipated when we last looked at the figures in 2006. The problem we have is making sure that we develop across the board, with the best technology available, to provide our troops on the ground with the protection and the vehicles they require.

Viscount Brookeborough: My Lords, the Minister addressed support helicopters in her Answer. However, those helicopters are not generally used for lifting patrols, nor are they ideal. What increase is envisaged in helicopters of the size needed for patrolling and therefore the size needed to reduce the number of operations by soldiers in Snatch vehicles?

Baroness Taylor of Bolton: My Lords, as I said, it is not always a simple choice of whether to put people in a helicopter or a Snatch vehicle. The vehicles used are decided by the commanders on the ground in view of the nature of the operation. If we are winning the hearts and minds of people in Afghanistan, as well

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as conducting a military operation, we cannot always use heavily armoured vehicles as that could be counterproductive. We are confident that we can increase helicopter flying hours further, and we have taken good measures to make sure that we are improving support. It is by improving support and ensuring that we have the trained crews that we have been able to increase the flying hours.

Lord Soley: My Lords, does my noble friend recall that, when the IRA started using roadside bombs in Northern Ireland, we who were then in opposition did not call for the use of helicopters—although it was suggested in some quarters—precisely because we knew that it was a battle for hearts and minds. That is why it is so important that operational commanders can decide the nature of transport vehicles, and why we put such an enormous burden on our troops in the field who must make the decision of whether to use helicopters, thin-skinned vehicles or heavily armoured ones. We are engaged in a battle with people trying to outmanoeuvre us. Will the Minister kindly remind the House that we must win that battle throughout?

Baroness Taylor of Bolton: My Lords, my noble friend is quite right to point out that our Armed Forces must operate on the ground to build constructive relationships with the local population. We must leave it to commanders on the ground to decide what is appropriate in different circumstances.

Housing and Regeneration Bill

3.30 pm

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the amendments for the Report stage be marshalled and considered in the following order:

Clause 1 Schedule 1 Clauses 2 to 9Schedule 2Clauses 10 and 11Schedule 3Clause 12Schedule 4Clauses 13 to 52Schedule 5Clause 53Schedules 6 and 7Clauses 54 to 58Schedule 8Clauses 59 to 275Schedule 9Clauses 276 to 283Schedule 10Clauses 284 to 297Schedule 11Clauses 298 to 301Schedule 12Clauses 302 and 303Schedule 13Clauses 304 to 309

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Schedule 14Clauses 310 to 312Schedule 15Clauses 313 to 319Schedule 16Clauses 320 to 324.—(Baroness Andrews.)

On Question, Motion agreed to.

National Insurance Contributions Bill

Report received.

Clause 1 [Amount to be specified as upper earnings limit: Great Britain]:

Baroness Noakes moved Amendment No. 1:

The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 2 to 4. The first two amendments deal with Great Britain and the second two are identical in substance for Northern Ireland.

The Government introduced the Bill under the guise of simplification of the tax and national insurance thresholds. The document issued on the day of the last Queen’s Speech said that the Bill,

In fact, the Bill gives the Government an unlimited power to increase the income on which ordinary national insurance contributions are payable with only the minimal constraint of an affirmative resolution. My amendments are designed to ensure that the Bill sticks to its original stated purpose: the simplification of the thresholds.

Under the Social Security Contributions and Benefits Act 1992, the Government can set the upper earnings threshold—the point at which employees stop paying ordinary national insurance contributions—at an amount between six and a half and seven and a half times the primary threshold, which is the point at which ordinary national insurance contributions begin.

The Government’s policy, as set out by the Prime Minister in his last Budget as Chancellor in April 2007, is to continue to align the primary threshold with the personal allowance for tax purposes and to align the upper earnings limit with the point at which higher rate tax is paid. This would create a neat symmetry between income tax and national insurance and should be easier for tax and national insurance payers to understand. We do not object to the policy, even though it means that the Government are able to hike the upper earnings limit way above inflation and, in so doing, raise a large amount—around £1.5 billion a year—from middle-income earners.

Noble Lords will recall that the April 2007 Budget had a package of changes to income tax and national insurance tax, including the abolition of the 10p rate of tax. The further changes, which the Chancellor announced in late April in the face of the Crewe

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by-election defeat and a Back-Bench revolt in another place, mess about with the convergence of the income tax and national insurance thresholds. The personal allowance is now £600 above the primary threshold, so that national insurance contributions are paid on that amount even through no income tax is paid. The higher rate threshold has been moved down by £600, although that means that the higher rate threshold is now closer to the upper earnings limit.

The Chancellor has said that these changes to the income tax thresholds are for this year only. We on these Benches simply do not understand how that can happen, since more than 13 million families would be affected, mostly adversely, by the reversal of this year’s changes. However, we are told to wait for this year’s Pre-Budget Report to find out how the Government will achieve this.

The Government have been even less clear about what that means for harmonisation with national insurance thresholds, but they have restated their commitment to harmonisation. The amendments allow the Government to achieve harmonisation next year at whatever levels the Chancellor sets in the PBR. That is what they said that they wanted when the Bill was introduced.

The Government said that they needed the Bill to remove the limit on the upper earnings limit by reference to a multiple of the primary threshold, so that they could achieve the harmonisation of the upper earnings limit with the higher rate threshold for tax purposes. Recent history shows that in the face of political difficulties the Government will abandon harmonisation whenever it suits them. There is a legitimate question about whether the Government have the will to achieve harmonisation. The amendments give the Government the benefit of the doubt; but in so doing we do not believe that it is appropriate or reasonable for a constraint at the top end of the national insurance thresholds to be removed for all time, subject only to the affirmative resolution procedure.

That leaves workers open to the ultimate stealth tax of national insurance contributions being raised at 11 per cent on all earned income. I remind the House that this is not fanciful; it was mainstream Labour Party policy until the mid-1990s. Let me put it in context. The noble Baroness, Lady Hollis, received a Written Answer on 21 May to a Question about the revenues that would be generated by the removal of the upper earnings limit. The Answer can be found at col. WA204of Hansard of that day. Noble Lords might like to take a deep breath before hearing that the Bill would allow the Government to raise £8.5 billion in extra class 1 national insurance contributions. That is the equivalent of nearly 3p on the basic rate of tax, or raising all the personal allowances and the basic rate limit by about 15 per cent.

My amendments do not stop the Government dispensing with the 6.5 to 7.5 times formula for next year. They can complete the convergence that they have planned. But from 2010-11, we have taken the Government at their word in wanting to harmonise the thresholds and then keep them in step. The amendments would mean that the upper earnings limit after 2009-10 would keep pace with the higher rate threshold for tax purposes. That threshold is

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uprated each year by RPI, by what is known as the Rooker-Wise process, named after an amendment moved successfully by the noble Lord, Lord Rooker, when he was in another place. An uprating order in conformity with Amendment No. 2 would do exactly the same thing for the upper earnings limit.

If the Government wanted to raise the amount by even more than RPI, which they may want to do from time to time, for example, because they want to raise the overall limits and thresholds in income tax and wish to harmonise at a higher level, they would have to bring forward a one-clause or two-clause Bill prior to the start of the tax year. As I explained in Committee, there would be plenty of time for that after the Pre-Budget Report, which each autumn announces all the rates and thresholds for the following tax year. However, such a procedure would clearly be the exception rather than the rule, since the higher rate threshold would generally follow the Rooker-Wise uprating path.

I moved a beta version of the amendments in Grand Committee. The Minister pointed out that it would be overegging the pudding to have had a largely automatic uprating process as well as the affirmative procedure and, as I promised him in Grand Committee, I have removed the latter. The Minister also helpfully pointed out that my Committee amendment would have meant rather too many one-clause Bills because of the mismatch between the weekly basis of national insurance contributions and annual tax allowances. So I have added a step 3 to the calculation, which is set out in Amendment No. 2.

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