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House of Lords

Thursday, 29 October 2009.

11 am

Prayers-read by the Lord Bishop of Ripon and Leeds.

Government: Debts


11.06 am

Asked By Lord James of Blackheath

The Financial Services Secretary to the Treasury (Lord Myners): My Lords, the value of unpaid tax debts is shown on page 96 of HMRC's trust statement. On 31 March 2009, the figure stood at £27.7 billion.

The value of benefit overpayments to be recovered, as on 31 March 2009, is £1.8 billion, which the noble Lord could have found on page 108 of the DWP's resource accounts. If people owe a debt to the Exchequer, it should be paid. HMRC and the DWP can, do and will continue vigorously to pursue those who can pay but will not.

Lord James of Blackheath: My Lords, I thank the Minister for that response. He will agree that that is a very high proportion indeed of the national debt and, as he rightly says, if it is not paid the burden will continue to fall on the responsible taxpayers who do continue to discharge their debts. Is he aware of the Government's guidelines on government agencies' debt recovery, particularly the section on the legal services framework, and will he say whether he considers those guidelines still to be an adequate response to the need for collection activity in an incisive manner?

Lord Myners: I am not intimately familiar with the document to which the noble Lord refers, but I shall put a copy alongside my bed tonight. What is more reassuring is that HMRC collects all but 1 per cent of tax due. Of the 1 per cent that is not collected, 90 per cent is due to business insolvency. That is an extraordinarily good record of debt recovery, which most businesses would find hard to match.

Lord Tomlinson: Does my noble friend agree that the figures sought by the noble Lord, Lord James, were about known tax debt? Does he further agree that the real problems that need to be addressed-I am sure they are receiving attention-are some of the corporate fiddles for evading taxation, such as transfer pricing, so that profits can be put into the most favourable tax domain even when they are earned in this country?

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Lord Myners: The Government and HMRC are committed to pursuing tax avoidance wherever they see evidence of that happening. We have been particularly vigilant in our dealings with the banking sector in this respect because some of the most invidious forms of tax avoidance are those associated with, and perpetrated or facilitated by, major banks. We are also extremely alert to areas in which tax codes and rules can be improved in order to reduce the risk of unintended consequences.

Baroness O'Cathain: My Lords, does the Minister not agree that the noble Lord, Lord Tomlinson, in trying to put all the blame on the corporate sector, is being quite unfair? An awful lot of people operating privately are avoiding and evading tax.

Lord Myners: I agree that we all have a commitment to meet our tax obligations and it is a great tribute to the vast majority of citizens and companies that they pay their tax at the time when it is due without being pursued or putting additional burdens on the system. That is to be welcomed. However, a small number do not and they should be pursued appropriately.

Lord Newby: My Lords, no doubt the Minister is aware that CPAG recently won a case in the Court of Appeal to the effect that the Department for Work and Pensions could not recover overpayments of social security benefits through the courts where the claimant was not at fault. Some 65,000 claimants received letters saying that they would have to repay major overpayments. Can the Government give those people an assurance that they will now be written to again to tell them formally that they no longer have to pay back benefits that they were overpaid through no fault of their own?

Lord Myners: If the judgment stands, there is no further appeal and that is the outcome, the DWP will of course recognise that and, I am sure, it would be the department's intention so to communicate.

Lord Campbell-Savours: My Lords, is not our 99 per cent collection rate one of the highest, if not the highest, in western Europe?

Lord Myners: I thank my noble friend for his question. I believe that the figure is very high, and as I said, it is high in comparison with my experience of the private sector. HMRC also works to understand the procedures used by tax authorities elsewhere and is constantly enhancing its methods, including in particular in terms of communication and phased payment. It is a good record and one on which HMRC deserves to be congratulated.

Lord Lawson of Blaby: My Lords, what is HMRC's latest estimate of the size of the black economy, and how accurate does the Minister think that estimate may be?

Lord Myners: I do not have a figure to provide for the noble Lord, Lord Lawson, but I will endeavour to find out from HMRC its current estimate and communicate with him in writing. There is an economy which acts outside the formal economy with clear tax

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evasions as a consequence. We are much focused on ensuring that we raise the appropriate rate of taxation from all taxable activities.

Lord Peston: My Lords, is my noble friend willing to comment on the fundamental issue here, which is that the benefit system is so complicated that you have to be a genius in order to be able to fill in the forms, and increasingly the tax system is so complicated that you worry enormously about making mistakes because you are never clear about the right answers? Have we not spent years talking about simplification? The problem is that while we all say that it is a good thing, we never do anything about it.

Lord Myners: My noble friend Lord Peston makes a point with which I have much sympathy. The tax system and the benefit system are both complicated, but that is the consequence of targeted policies that try to ensure that we raise taxes in a fair and proportionate way and that we focus benefits on the most needy. The need to get good value for money and to preserve focus needs to be counterbalanced with the fact that there are some consequences in terms of complexity. I am not sure that any government will ever get it perfectly right, but the message of my noble friend is one with which I have much sympathy.

Lord De Mauley: My Lords, in May the Public Accounts Committee criticised Her Majesty's Revenue and Customs for failing to explore new payment methods for taxpayers to settle their liabilities and called on HMRC to look at letting people settle their debts through schemes such as Paypoint and Pay Zone. What progress has been made in this area?

Lord Myners: As I said, HMRC is looking at new ways of settling tax through electronic money, adjustments to PAYE coding and adjustments to benefits received. Again, we are drawing on the experience both of the private sector in its management of debt recovery as well as that of tax agencies elsewhere. I have found HMRC to be an innovative and customer-focused organisation that is constantly seeking to improve its performance.

Africa: Water Shortages


11.14 am

Asked By Lord Hunt of Chesterton

Lord Brett: My Lords, climate change will result in more frequent water shortages, such as the current drought in east Africa. A deal at Copenhagen is crucial to limit temperature rise to two degrees centigrade and ensure that vulnerable African countries have access to additional finance to adapt to climate change. We

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are working with a number of African countries to improve water management. We will provide up to 25 million people with drinking water over the next five years.

Lord Hunt of Chesterton: My Lords, with water shortages caused both by the effects of climate change and by population growth, as a recent conference of Africans in Cambridge pointed out, and being highly variable across Africa, are Her Majesty's Government assisting each country in a focused way to establish its future water resources and policies? Will they ensure that there is adequate funding of technical support programmes by the Met Office and other UK agencies, and that these will continue at least at the current level?

Lord Brett: My Lords, DfID funding has helped more than 7 million people in sub-Saharan Africa gain access to clean water and sanitation over the past four years. The Government are providing country assistance to water programmes in Ethiopia, Democratic Republic of Congo, Nigeria, Sierra Leone and Sudan. We are supporting a regional programme within and between member states of the Southern African Development Community, and between the 10 countries that share the waters in the Nile Basin.

My noble friend will be aware that, as part of the £100 million that DfID has committed to climate research, we are developing a new partnership with the Met Office Hadley Centre to support African countries to improve knowledge and climate science capacity. We are also providing £15 million to the ClimDev programme in Africa, hosted by the United Nations Economic Commission for Africa; we support the Climate Change Adaptation in Africa programme; and we provide core funding to the Global Water Partnership, which has helped 12 African countries to develop integrated water resource management plans.

Baroness Northover: My Lords, is the Minister aware that climatologists predict that by the 50th anniversary of the 1984 famine in Ethiopia, this kind of drought will hit the Horn of Africa in three years out of every four? Given the gravity of that situation, what does he hope will be achieved today at the EU meeting? What does he think are the outstanding issues for Copenhagen?

Lord Brett: My Lords, drought in the Horn of Africa is a tragedy that we have seen in the past. We hope that the El Niño rains that have started to fall will help to make this drought something that passes relatively quickly but, as the noble Baroness rightly says, under climate change those activities that are to our disadvantage will be more frequent in future. We hope that Copenhagen will produce an agreement to put additional finances into climate change. We believe it is important that we do not abandon the African continent and its fight against poverty and for health and education by diverting money from the ODA and to climate change. That is why the Prime Minister is seeking £100 billion from the Copenhagen summit, and today at the EU he will be pressing for support in that regard, as set out in his speech on 20 September.

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Baroness Gardner of Parkes: My Lords, is the Minister aware that, while there are huge national shortages of water, personal access to water is very important to people in Africa? Is he aware of the marvellous work being done by many charities-NGOs, as they call them-to provide pumps and things? Where people had to collect water in a little cup, now they can get a bucketful of water. It is important to ensure that this work is continued.

Lord Brett: My Lords, I agree with the noble Baroness. We find that the work internationally and nationally of the NGO community, of Water Aid and other international bodies, assisting as partners in the fight to provide water and sanitation, is vital. This situation can be overcome only by the partnership of civil society, government and the international community.

Lord Alton of Liverpool: My Lords, does the Minister agree that one of the greatest drivers for conflict in Africa at the moment is the scarcity and shortage of water in many parts, particularly in eastern Africa? Will he reconsider the answer he gave a moment ago about the countries where help is being given? I notice the omission of Kenya, particularly the situation in Turkana, where many tribesmen are coming in from southern Ethiopia to raid cattle and much conflict is being driven by the absence of water. Will the Minister consider including Turkana in northern Kenya within the list of countries that DfID is able to help?

Lord Brett: My Lords, I listened with interest to the noble Lord. Some 65 people have lost their lives in conflict in Kenya this year over water disputes. I know that I will be chastised for giving long answers if I deal in detail with the question, so I shall happily take it away and respond in writing to the noble Lord.

Lord Hughes of Woodside: My Lords, is it not the case that while the long term needs to be addressed, this is a short-term matter that has to be dealt with now, with Kenya having the worst drought for 10 years and Somalia in the worst position since 1991? What is DfID doing to deal with the situation on its own account and to alert the international community to the tragedy that is unfolding, which may hit us very soon?

Lord Brett: My Lords, DfID is supporting countries in Africa in dealing with the drought in a number of ways. It has committed £83 million in humanitarian aid to Ethiopia, Eritrea, Kenya and Sudan. It has also provided £40 million to the UN's Central Emergency Response Fund this year, making us the fund's largest donor. So far, £36 million has been drawn from that fund for east Africa. DfID has also provided £35 million to the productive safety net programme in Ethiopia, which provides food and cash transfers to more than 7 million vulnerable people. We continue to work with countries across Africa and the regional development authorities, in SADC and beyond, to assist in this very difficult situation.

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Lord Steel of Aikwood: My Lords, I received a very distressing e-mail yesterday from a friend in northern Kenya, who had seen hundreds of dead cattle. That is an area where we traditionally have a lot of military training. Will the Minister talk to his colleagues in the Ministry of Defence to see whether there is anything we can do immediately to use the skills and resources of the British military to dig more wells in that area?

Lord Brett: I listened with interest to the noble Lord. If he could let me have greater detail on that matter, I shall pass the information on to my colleagues in the Ministry of Defence.

Lord Geddes: My Lords, what evidence do Her Majesty's Government have of misappropriation of funds in this context?

Lord Brett: DfID has a very robust system of checking that the funding that it gives is used properly. When we feel that Governments are not in that position, we use the civil society organisations and others. We audit the funds very carefully and, when we find misappropriation, we seek to take action to avoid funds being embezzled in any way, shape or form. It is a large budget and is spent across a number of countries, so there are bound to be occasions when things do happen. We keep them to a minimum and investigate them all.

Lord Hunt of Chesterton: My Lords, I believe that I should have declared an interest as former head of the Met Office.

Northern Ireland: Cross-Border Police Co-operation


11.22 am

Asked By Lord Cope of Berkeley

The Chancellor of the Duchy of Lancaster (Baroness Royall of Blaisdon): My Lords, to address the complexities referred to by the noble Lord, officials in both jurisdictions are preparing draft procedural manuals for their respective police forces and prosecutors. This work is due for completion before the end of the year. In respect of delays in the processing of letters of request, all mutual legal assistance requests are processed and responded to as quickly and as comprehensively as possible.

Lord Cope of Berkeley: I am grateful to the noble Baroness, particularly for her recognition of the importance of these issues for proper policing either side of the border. Will these procedural manuals mean that a policeman taking a statement on either side of the border will find that it can be used in both jurisdictions in court, as evidence in court in pursuing

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a trial? We were told that the procedural manuals would be available in the autumn, but we seem to have reached autumn and now it has moved to the end of the year. What is the reason for that delay?

Baroness Royall of Blaisdon: The reason for the delay is to ensure that the procedural manuals are the best possible manuals that they could be. There is no other reason, and they will certainly be available by the end of the year. Work is still continuing. As for witness statements-I do not want to get this wrong, so I shall read it-a witness statement recorded by a member of An Garda Siochana may be used in committal proceedings in Northern Ireland, providing that it complies with certain requirements of Article 33 of the Magistrates' Courts Order 1981. Evidence of a confession made to a member of An Garda Siochana may be admitted in proceedings in Northern Ireland, unless the court considers that this would have an adverse effect on the fairness of the proceedings. That is the clear position. The procedural manual will ensure that people are better able to implement the law as it stands.

Lord Smith of Clifton: My Lords, will the Minister give us an assurance that this issue will be resolved before the transfer of policing and justice powers to the Northern Ireland Assembly? There really has been a great deal of procrastination by Dublin and London on this issue. My noble friend Lord Alderdice raised it over a year ago and the noble Lord, Lord Cope, did so again in June. I should like an assurance that it will be done before it is given to the Northern Ireland Assembly.

Baroness Royall of Blaisdon: My Lords, if the noble Lord is referring to delays in mutual legal assistance requests, a lot of work has been done on that since it was raised in June this year. Discussions have taken place between the two authorities, and both authorities are adamant that there are no longer any delays due to bureaucratic problems. Any delays are only the result of the complexity of the information requested.

Lord Dubs: My Lords, given the very good co-operation at the moment between the PSNI and the Garda Siochana, am I right in thinking that some of the difficulty posed is that information has to be sent via London to Dublin or via Dublin to London rather than directly from one police force to another? If not, the process could be speeded up much more.

Baroness Royall of Blaisdon: My Lords, the process is according to the law. Information goes from a unit in the Home Office to a unit in the respective department in Dublin, but that is not the reason for the delay. There are no delays due to bureaucracy, postbags or whatever. The delays are due only to complexities in the information requested.

Viscount Bridgeman: My Lords, after devolution of criminal justice powers to Northern Ireland, will this problem be devolved with it? Under what authority will the Northern Ireland Executive negotiate with the Irish Government?

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