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23 Oct 2008 : Column 1232

Earl Ferrers: My Lords, in her answer to my noble friend Lord Cope the noble Baroness said that she could not respond because it was a matter for the Treasury. Is she aware that she answers for the whole Government?

Baroness Vadera: My Lords, I am perfectly aware that I answer for the whole Government. Nevertheless, matters on tax are for the Treasury. It makes these issues public in a certain process and procedure that we must all respect.

Lord Roberts of Conwy: My Lords, while many small businesses would welcome a reduction in interest rates, I am sure that the noble Baroness is well aware that the pound is falling in value against the dollar and other currencies, and that there is a relationship between interest rates and the value of the pound. What protective measures are available to the Government in the event of a run on the pound?

Baroness Vadera: My Lords, I do not believe that we are currently anticipating a run on the pound, but I am sure that the tripartite authorities have made provisions for all circumstances, and have done for years.

Lord McIntosh of Haringey: My Lords, we have now had six or seven questions in a row from the Conservative Benches. Will the Minister acknowledge that on this side of the House we believe that she has answered all of them not only effectively but quickly, and we are grateful to her?

Noble Lords: Hear, hear!

Lord Lang of Monkton: My Lords, if the noble Baroness’s answer to that question is one of silence, perhaps I may ask her quickly and effectively to answer this question. To what extent have the individual components of the recently announced bank rescue package now been implemented, so that the banks may be expected to respond accordingly?

Baroness Vadera: My Lords, liquidity is already available and is being utilised. The first issuance under the medium-term guarantee scheme, a central part of the package, has already been undertaken by Barclays and had a positive impact on the market. Recapitalisation will obviously be subject to shareholder votes and to the marketing of the shares, which will be taking place over the next two or three months for closure towards the end of the year.

Income Inequality

11.28 am

Lord Haskel asked Her Majesty’s Government:



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Lord Davies of Oldham: My Lords, the Government welcome the report. Government reforms to promote employment opportunity for all, to make work pay, and to support vulnerable groups have helped all sections of society to share in rising national prosperity in the last 10 years. Since 1997, living standards have risen strongly across the income distribution. The previously sharp rise in income inequality has been arrested, and relative poverty has fallen significantly among children and pensioners.

Lord Haskel: My Lords, I thank my noble friend for that reply. Is he aware that what he has described has been achieved not by squeezing the rich, but by helping the less well off, and that this help has been a crusade for the Labour Party for many years? Can he confirm that the Government will continue with it?

Lord Davies of Oldham: My Lords, the Government’s broad objectives of creating a competitive and successful economy and a fairer society will continue.

Lord O'Neill of Clackmannan: My Lords, can my noble friend tell the House whether the OECD report takes account of the fact that the national minimum wage, tax credits, family benefits and pension credits were all introduced by the Government and opposed by those opposite? If the Opposition had been successful, would we have been able to enjoy the statistics produced by the OECD?

Lord Davies of Oldham: My Lords, the OECD report identified that income inequality was increasing markedly during the 1980s and early 1990s and that this process has been arrested. This is as a result of government policies—of which the most important is the employment policy—and the increase in the number of jobs available in our society, together with the other points which my noble friend has identified.

Baroness Noakes: My Lords, the Minister referred to the children and pensioners in poverty numbers decreasing since 1997. However, he will know that since 2005 those numbers have been increasing, and the OECD report only ran to 2005. Do the Government have any policies to turn that negative trend around, especially in the light of the current economic circumstances?

Lord Davies of Oldham: My Lords, we all recognise that the current economic circumstances are difficult indeed and that there is a difficult year ahead. That is why my noble friend, in response to an earlier Question, indicated that the Treasury and the Chancellor will be making clear their strategy in the Pre-Budget Report, which we expect shortly. The answer to the noble Baroness’s question is clear: in these difficult circumstances we will seek to protect those most disadvantaged in our society.

Lord Tebbit: My Lords, does not the Minister agree that it is bad enough for most of us in this House to pay a marginal rate of tax of 40 per cent, but that what is far worse is that at the bottom of the stack people

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are paying rates of more than 80 per cent when you take into account both tax and loss of benefits? Is it not a scandal that the effective tax rate for people on very low earnings is so much higher than for those on high earnings?

Lord Davies of Oldham: My Lords, the noble Lord has highlighted an important point. I am not sure that it was addressed more than a decade ago but he is right to address it to a Government who feel keenly about this issue. I emphasise that through tax credits more families are getting resources greater than the tax they pay, but certainly the Government need to address the issue identified by the noble Lord.

Lord Lyell of Markyate: My Lords, does the Minister recognise that over the past 10 years the Government have presided over a sharp rise in the price of houses and home ownership, despite the recent fallback? Do the Government regard that as a benefit to the citizens of this country?

Lord Davies of Oldham: My Lords, the extension of home ownership is certainly a benefit, as is the security that people derive from what has been invested in their homes. However, a significant percentage of the population need homes, are not in a position to purchase and need social housing. That is why the Government have emphasised that we intend to develop social housing as soon as we are able to do so.

Lord Newby: My Lords, does the Minister agree with the OECD that the single biggest reason that income inequality has fallen is that unemployment has fallen significantly? Does he further agree that if there were a reduction in GDP next year of only half a per cent, unemployment is likely to rise by 1 million? Will he therefore consider ending tax perks for the rich so that taxes can be reduced for those at the bottom end of the scale, to benefit those families and communities that are likely to be most affected by the rapidly rising levels of unemployment that we now expect?

Lord Davies of Oldham: My Lords, the noble Lord will know that I agree with his first point because I said earlier that employment policies are by far the most effective way of effecting income redistribution. On the more general point, of course we need to address what will be some increases in unemployment. We can see that taking place at present and it is bound to occur over the coming year. As I have indicated, the Government will outline our plans to cope with that issue in the Pre-Budget Report in the near future.

Baroness Amos: My Lords, how can the Government continue to support flexibility in the workplace, which has been particularly important in increasing women’s participation, given the current economic circumstances?

Lord Davies of Oldham: My Lords, we take pride in the increased flexibility in our economy, and that is a reflection of flexibility at the place of work. It is of particular significance to women, who frequently require flexible hours. We all recognise that over the past

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decade or so that has been one of the more significant developments in the workplace, and we will seek to sustain that development.

The Earl of Listowel: My Lords, does the Minister recognise the importance to this improvement of the Government’s investment in childcare? Will he pay tribute to the work of childminders and early-years workers in achieving this improved employment rate?

Lord Davies of Oldham: My Lords, I am grateful to the noble Earl, who takes a keen interest in these matters and therefore speaks with authority when he indicates how crucial the issue of childcare is, particularly the role of childminders, relating both to the question I was asked earlier about flexibility with regard to women at work and to the benefit of children.

Baroness Thomas of Walliswood: My Lords, the Government have been keen to improve the status of women in terms of their employment and salaries. In the current circumstances, what is happening to the equality, or lack of it, of wages between men and women?

Lord Davies of Oldham: My Lords, we all know what a challenge that represents, and of the disparities throughout our economic history between the earning power of women and that of men. We are concerned that there should be fair pay for all according to the work that they do and the noble Baroness will recognise the extent to which we have been able to do that in certain areas, overwhelmingly in the public sector. It is more difficult in the private sector, as she will appreciate.

Police Appeals Tribunals Rules 2008

Police (Performance) Regulations 2008

Police (Conduct) Regulations 2008

Immigration and Nationality (Fees) (Amendment No. 3) Regulations 2008

International Criminal Court (Remand Time) Order 2008

Wool Textile Industry (Export Promotion Levy) (Revocation) Order 2008

Rail Vehicle Accessibility Exemption Orders (Parliamentary Procedures) Regulations 2008



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Rail Vehicle Accessibility (London Underground Victoria Line 09TS Vehicles) Exemption Order 2008

Air Navigation (Environmental Standards for Non-EASA Aircraft) Order 2008

11.37 am

The Lord President of the Council (Baroness Royall of Blaisdon): My Lords, I beg to move the nine Motions standing in my name on the Order Paper.

Moved, That the draft rules, regulations and orders be referred to a Grand Committee.—(Baroness Royall of Blaisdon.)

On Question, Motions agreed to.

Legislative Reform (Local Authority Consent Requirements) (England and Wales) Order 2008

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. In moving the Motion, I should say that the first-stage legislative reform order was debated in Grand Committee on 13 December and that the revised draft order reflects the comments made by your Lordships’ Regulatory Reform Committee.

Moved, That the draft legislative reform order laid before the House on 26 June be approved. 1st and 12th Reports from the Regulatory Reform Committee, First-stage draft order considered in Grand Committee on 13 December 2007.—(Baroness Andrews.)

On Question, Motion agreed to.

Planning Bill

11.38 am

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.

House in Committee accordingly.

[The LORD SPEAKER in the Chair.]

Clause 198 [The levy]:

The Earl of Caithness moved Amendment No. 435A:

435A: Clause 198, page 122, line 36, leave out “with the consent of the Treasury”

The noble Earl said: In moving Amendment No. 435A I shall speak also to Amendments Nos. 435C, 435D, 435E, 435F, 435G, 435J, 435K and 436. This is the first of a lot of large groups. I hope that we are able to discuss all the amendments. I dislike the groupings

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and I have said so, but I have been overruled in what I wanted to do to try to improve the debate and the structure of our proceedings.

Today we move on to the worst part of the Bill; those in the department should hang their heads in shame for what they have done. Never have a Government been so savaged by the Delegated Powers and Regulatory Reform Committee, which took this part of the Bill apart in its very potent analysis. There is a huge lack of detail. It is very difficult to discuss a levy such as this when there is no detail. What has happened to the assurance given in another place? The Minister, Mr Healey, said,

Where are these draft regulations? Why have the Government not stood by what they said they would do? It makes our life extremely difficult, but perhaps the Government’s aim is not to have a proper debate on this part of the Bill. In that way, they can have the flexibility to amend provisions without consultation or debate in the House.

Let us make it absolutely clear: this is not a levy; it is a tax. This is just a variation of development land tax. I can see the scenario in the department: “We can’t call it development land tax. What are we going to call it?”. Someone came up with the bright idea of the community infrastructure levy and was told, “We can’t call it that yet; that will be our fallback position. Let’s think of something worse”. They started off with the planning gain supplement, which created such an outcry that they were able to fall back comfortably on the community infrastructure levy, so now they have the tax they wanted.

It is because of the question of whether this is a tax or a levy that I have tabled Amendment No. 435A, which would delete the words,

I have seen those words in lots of Acts and have put them into Acts myself. They indicate quite clearly that this is a tax matter. This is not a levy or a charge, but just another tax.

Yesterday we heard the honeyed words of the noble Lord, Lord Mandelson, saying that he was going to support small businesses and we heard at Question Time today about the help that the Government are giving small businesses. Yet with the other hand they stick a knife into small businesses by adding another tax. The timing could not be worse. It is just like the home information pack; that may have been a lovely idea when it was dreamt up but by the time it got on to the statute book, it was a disaster and has done nothing to help the housing market. CIL will do exactly the same. When this gets on to the statute book, we will be in the middle of a recession and nobody will want to develop anything because of the tax implications.

Amendment No. 435C seeks to insert the words “part only of” the cost. Why should all the costs incurred be paid by this dreadful tax? Amendment No. 435D would provide that the tax should be paid on costs directly incurred in providing the infrastructure. Why should this tax help other projects rather than the

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one with which it is concerned? That is also the reason for the words “partly” and “wholly or partly”, contained in Amendments Nos. 435E and 435F. If we are to have this tax and developers will have to pay for added infrastructure, it should be related directly to the project in question, not to something much wider. Then we have this terrible phrase at the end of subsection (2), where it says that the tax is paid on land,

It is quite clear that somebody in the department does not know how development works, because planning permission does not necessarily mean an increase in value. This part of the Bill contradicts Clause 200(5), and it is for that reason that I would like to remove those words.

Amendment No. 435J would delete reference to the Secretary of State. I think that the noble Baroness has an amendment in her own right on that, also deleting reference to the Secretary of State. That takes me on to Amendment No. 436, which again deletes the reference to Secretary of State as well as those to the Welsh Ministers and the Mayor of London. Why are they charging authorities? I beg to move.

11.45 am

Baroness Ford: I oppose the amendments in the name of the noble Earl, and, in so doing, I draw attention to my interests on the register. Like the noble Earl, I am a member of the Royal Institution of Chartered Surveyors, but I take a different view to the introduction of the community infrastructure levy. I take that view based on almost 10 years’ experience of major infrastructure projects across the length and breadth of England and the difficulties that all parties—central and local government, private developers and housebuilders—have encountered over that time in unlocking land for development because of lack of investment in infrastructure.

The noble Earl drew attention to the previous idea of a planning gain supplement. He was not alone in having grave concerns about the PGS, but, to the Government’s credit, there was widespread consultation on that, and the department went to great lengths to listen, understand that concern and modify its proposals in light of that concern. I pay tribute to my noble friend Lady Andrews for the lead she took in that work.

There is no doubt in my mind that all across England lots of perfectly viable, sensible and sustainable developments are held up for want of a mechanism to fund the necessary infrastructure to release those developments. An example that I could give would be in west Bedford, where five major landowners could not unlock that development for the want of a relief road. Often the issue is not over a massive infrastructure; sometimes it is actually quite small. Because of that, it is below the radar of departments such as the Department for Transport, but it is simply too rich for the appetite for resources of a single authority. In the case of west Bedford, central government brought all those landowners together and with the local council they were able to secure a voluntary contribution to unlock that infrastructure over a period. Again, in Milton Keynes there is now a tariff in place; the 18 landowners there

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voluntarily came together because they knew that it was in their own interests to unlock that development in a sustainable way and agreed to pay a tariff of just over £18,000 per house for that.


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