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Lord Bates: My Lords, I rise very briefly in this short debate just to welcome wholeheartedly the measure that the Minister has brought before us. It may be viewed in some parts of the House as a knee-jerk reaction, but sometimes with these dangerous drugs that come on to the market, a knee jerk is exactly what we need to get across to young people the message regarding the dangers. The reason I am speaking now is that, about an hour ago, I had a text message from a young man, a 20 year-old, who asked me whether this matter was coming up for debate and, if it was, to make sure that I voted for it, because it is crucial that this drug is banned and information about it made available. He also made a very interesting point. He believes that the prevalence of the drug is much wider

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than the Government may think and, therefore, that the difficulty of clamping down on it may be substantially greater. He also had some suggestions. As these types of drugs are made available predominantly at night clubs, pubs, bars and city centres which are well known to the police, perhaps education and awareness through such means as leaflets could be promoted at the places and venues where young people are so vulnerable.

The second point was on whether greater use could be made in communicating those messages via social media. One is aware of web announcements and web pages, but most young people get their information and communicate through Twitter, Facebook, Bebo and YouTube. Could those social media be better used to communicate that information, because the moment when the ban comes into place on 16 April is but a few days away? The objective of all of this legislation is not necessarily to fill up our already overcrowded prisons even more with people who have fallen foul of this new law, but in fact to protect young people and save lives. Therefore, education really needs to be at the forefront of this effort from the Government. With those few remarks, I join my noble friend from the Front Bench in wholeheartedly welcoming this measure that the Government have brought forward.

12.15 pm

Lord Alderdice: My Lords, I want to intervene briefly at this point, because while we on these Benches understand the pressure for the Government to intervene at this juncture, it seems to me that the Minister himself has acknowledged that the advent not just of this drug but of this way of synthesising drugs effectively changes the picture. It is a little bit like a difficulty that the Minister will be well aware of: in the old days, terrorist groups tended to be consistent and to last for a long time, and so on, but now they fragment and split and grow up, so banning them simply by name, for example, is not particularly effective and we have had to look at other things.

Can the Minister confirm to us that the Government are not depending simply on banning particular new synthetic drugs when they come up, but rather that they are looking at what is at the back of all this, so that we have a more effective process for trying to deal with this whole problem of a developing drug culture? In that, one will not simply be satisfied by saying, "Well, we've banned this drug", or even, "We have banned this group of drugs", as the Minister has indicated. The whole way that we deal with this problem needs substantially needs more attention. I wonder whether the Minister can give some indication that that is the Government's wish and intention.

Baroness Finlay of Llandaff: My Lords, I must declare an interest as a member of the technical committee of the Advisory Council on the Misuse of Drugs. I am also on the board of the UK Drug Policy Commission. It is from that background that I, first, congratulate the Minister on summarising the evidence about the cathinones so well. I have gone through the evidence myself and am most impressed at his command of it.

I reinforce the question raised by the noble Lord, Lord Alderdice, and indeed by the noble Lord, Lord Swinfen, because there is a problem. The law needs to

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give a message that this is not safe, while there is a perception among young people that if something is legal then it is probably not too bad. However, we have an increasing experimentation culture and an increasing number of bizarre chemicals coming in, apparently being manufactured-I say apparently because I have only seen second-hand evidence-in parts of China and the far East, and so on. There are those chemical factories producing new substances, and the youngsters will experiment with them. The other problem we have is the gangs, with the gang culture and gun culture that goes along with them, so this is incredibly complex.

I intervene simply to make a plea to whoever comes in after the general election, which I believe we all know we are facing. We need to have a long, hard look at the whole issue of drugs in our society. We may have to completely review how we handle them because when we ban one thing, unfortunately, it sometimes becomes appealing. I personally think that the concept of banning the whole group of cathinone chemicals is very clever, and I completely support it because it means that whichever bit you attach to the molecule you will be capturing the whole group as new ones come along.

However, I hasten to say-although I dread saying it-that as we sit here today there are a whole bunch of new chemicals being manufactured out there, which somebody will try to persuade some young person to experiment with. There is that whole question of what is going on in our society, when those youngsters just want to experiment-and experiment with things that the rest of us would not touch with a bargepole. Having said that, I support the Minister in bringing this order forward.

Lord Elystan-Morgan: My Lords, I should like to say a word or two in tribute to the Misuse of Drugs Act 1971, which after nearly 40 years shows how smooth the process can be and how swiftly it can be executed in order to deal with a problem that arises suddenly. I say that without total objectivity because, as a Home Office Minister, I was responsible in 1969 for the Misuse of Drugs Bill, which unfortunately died a death with the 1970 election. Wash-up was not known as a parliamentary institution in those days, although there was complete unanimity, it seemed, in the House of Commons in favour of the Bill. The Bill was reintroduced by the following Conservative Government and, without a word of it being changed, it became the 1971 Act. It works well.

I congratulate the Minister wholeheartedly on the promptness and firmness with which the Government have acted. I wholeheartedly endorse what he says. This is not just a matter of legislation criminalising a drug; there has to be a comprehensive effort socially and educationally at every level to try to bring the message home to people who fall victim to these things. Peddlers invest heavily in the misery and ruin of their fellow humans and, when they are caught, they should face condign punishment.

Lord West of Spithead: My Lords, I thank noble Lords for their input into this debate and I am glad that the House generally supports what we have done. The noble Lord, Lord Swinfen, asked about research

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into why people take drugs. A certain amount of work has been done by a government research programme, but this is an extremely difficult area. Why do people do this? Why do they have a drink? Why do they do any of this? These things are very difficult to pin down. I have a feeling that, as with our work into what makes someone become radicalised and a violent extremist, there are almost as many reasons as there are people, although there might be strands to give us guidance. However, we do work on this. If we could resolve this question, it would of course be wonderful, as we would be able to come up with an instant answer, but I fear that there is no instant answer.

The noble Baroness, Lady Hamwee, mentioned the importance of all the other aspects of this issue, such as drugs treatment and handling drugs in a different way. We agree entirely with that, but I believe that we also need a bit of stick. We need to point out to young people when something is really dangerous. It is quite clear from stuff that has happened recently that some people did not understand that mephedrone was dangerous. They thought, "Ah, I can get high on this as it's legal". It is crucial that the Government should point out what is considered to be dangerous after it has been looked at by the ACMD. The noble Baroness, Lady Finlay, touched on that.

The noble Baroness, Lady Hamwee, said that this was a knee-jerk reaction. I do not think that that is the case, but we have acted quickly. The noble Lord, Lord Elystan-Morgan, talked about the Misuse of Drugs Act. Yes, we are able to use that, which is a wonderful thing. It is nice to have legislation that lets one act quickly. It was in July of last year, at the Isle of Wight music festival, that we first became aware that this strange created drug, mephedrone, was available. That flagged it up to us. We noticed that people were getting nosebleeds. The council became aware of it and started to think about it.

In September, the ACMD wrote to the Home Secretary giving an update on a number of areas of work, one of which was the risk of cathinones. The council was not quite sure at that stage what the risk was, because it did not have enough detail. In December, it wrote to the Home Secretary highlighting mephedrone as a priority. It was getting really concerned about it, saying that there was evidence of harm and that it was sold, as I said, as bath salts, fertiliser or whatever. The Home Secretary then waited for the full, proper advice from the council, which came on 29 March. As soon as that came, he acted immediately, which was absolutely right and appropriate. I think there was something in the newspapers that day about the possibility of someone having harmed themselves. The ACMD report came out on 31 March at around the same time-just in time for that to be taken through the House. It was not knee-jerk, but acting promptly and quickly, as we needed to. I was glad that we received support on that from the Benches opposite and several other noble Lords.

The noble Lord, Lord Bates, touched on where we are and what we are doing in educating people. I touched on that in my initial statement. The answer is that we probably cannot do too much educating so he is absolutely right. Giving out leaflets at various clubs and so on is a very good idea. I think we do that but I

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will check and make sure. It is absolutely valid. I know we are pushing out 200,000 leaflets to the National Union of Students so that it can get them out, and doing other such things. That is very important.

We do not want to criminalise youngsters. I think that was the general feeling from the House, as well. I would love to put the traffickers away for the maximum of 14 years. They are the blighters we need to get. There is no doubt, looking back at the Isle of Wight festival, that the traffickers had been caught because we were putting in rules to stop one group of designer drugs, so they came up with another one. They thought, "Here we go", and put it out by selling it as a fertiliser, letting the word go out that it was legal and people could have it. They are the people we want to get and need to put behind bars. I have no trouble with having them banged up, rather than the youngsters. However, one has to have a stick in the background in case it is needed. I know from personal experience what damage drugs can do to youngsters. The action that we are taking is absolutely valid.

I thank the noble Baroness, Lady Finlay, for all the work that she has done and her input into various parts of this area. She is absolutely right: this whole area of drugs is one that we must keep a lot of focus on, taking a long, hard look at whether we are doing it in the right way. There is no doubt that drug misuse wastes lives, destroys families and damages communities. We have got to hit this problem head-on. We know the damage it does. In the past 12 years we have seen progress and notable success but we cannot be complacent. We must be prepared to respond very quickly when something changes. Our way of capturing these things under a generic title answers the point of the noble Lord, Lord Alderdice. By going, generically, for a whole group, we are managing to keep up, but to say that we can get ahead of them is madness. These people are very cunning and do not care about the people they are damaging.

Approval of the order will help to ensure that the controls are in place. I thank everybody for, effectively, round-the-Chamber support and the fact that we are sending out a very clear and united message from this place. I commend the order to the House.

Motion agreed.

Appropriation Bill

Bill Main Page
Copy of the Bill

Second Reading (and remaining stages)

12.28 pm

Bill read a second time. Committee negatived. Standing Order 47 having been dispensed with, the Bill was read a third time and passed.

Finance Bill

Bill Main Page
Copy of the Bill

Second Reading (and remaining stages)

12.29 pm

Moved By Lord Myners

The Financial Services Secretary to the Treasury (Lord Myners): My Lords, as my right honourable friend the Chancellor of the Exchequer said when he delivered his Budget Statement, the past few years have been a difficult time for people, not just in the

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UK but globally. It has required difficult choices, with Governments around the world taking unprecedented steps to rescue the global financial system and support the economy, business and families. The record shows that the Government have made the right calls, and the effect on the wider economy, families, households and businesses has been much less severe than it would have been had we let the recession run its course. Despite the latest data showing that we are now emerging from the deepest global recession in more than 60 years, uncertainties remain, and there will be risks to confront. It will not be plain sailing from here on.

My right honourable friend set out a Budget which mapped out the next steps in the Government's plan to secure the recovery and build strong, sustainable, growth. The Budget therefore announced: continued targeted and temporary support through the recovery; a package of measures, worth £2.5 billion, to support small businesses and promote innovation; and how the Government will deliver on their obligation to halve the deficit in four years.

These measures are at the centre of the Bill before noble Lords today, and I propose to address each area. The Government are determined to carry all of the tax measures announced in the Budget into law. However, recognising that there was limited time before dissolution of Parliament, we have published a much more limited Finance Bill than in a normal year. As my right honourable friend the Financial Secretary told the other place yesterday, following discussions with the Opposition we moved amendments removing provisions relating to landline duty; the requirement of securities for PAYE; and abolition of furnished holiday lettings from the Bill. We will include these in a Finance Bill to be introduced as soon as possible in the next Parliament.

In addition to these amendments, and following discussions with the Opposition, we have also amended Clause 9 to align the rise in cider duty rates with that for other alcohol rates, limiting the increase to 2 per cent above inflation with effect from 30 June.

It is clear that the support provided to households and businesses over the past two years has worked. The temporary cut in VAT was worth an average of £20 per month for every household, and 200,000 businesses which collectively employ 1.4 million people have been given extra time to pay their tax bills. However, withdrawing support too soon could jeopardise the recovery. While uncertainties remain, we will continue to build on the support that has limited the impact of the recession for families and households. Clause 6 therefore increases the stamp duty threshold for first-time buyers from £125,000 to £250,000, ensuring that nine in 10 first-time buyers will pay no stamp duty at all. To ensure that this does not add to the burden on the public finances, Clause 7 announces an increase in the stamp duty to 5 per cent for residential property over £l million to fund this.

The Government's support for business has meant that the rate of insolvencies is half what it was during the early 1990s recession. Around 850,000 companies have benefited from our decision to defer the rise in the small companies' rate. Clause 3 maintains the rate of corporation tax for small companies at 21 per cent for 2010-11, as announced in the Pre-Budget Report.

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Similarly, as the Chancellor announced, although the rate of fuel duty will increase over the next year, we are sensitive to the impact that a large rise would have on families and businesses at this time. We are therefore providing for a staged increase spread over the course of the year. Under Clause 12, fuel duty will rise by only a penny in April, less than inflation. Clause 13 provides for further rises of a penny in October and the remainder in January.

We make no apologies for extending this support to families and businesses. To do otherwise would involve taking a huge risk with people's jobs, incomes and the future growth of the economy. However, in the medium term, the Government must live within their means. As the Chancellor said on 24 March, we intend to achieve this goal by a combination of public spending cuts, growth in the economy and tax rises.

This Finance Bill provides for a number of measures to underpin strong, sustainable growth. Clause 5 doubles the annual investment allowance to £100,000 for expenditure incurred from April 2010, ensuring that 99 per cent of businesses will be able to deduct all qualifying investment from their taxable profits. Clause 4 doubles the limit for entrepreneurs' relief for capital gains tax from £l million to the first £2 million of gains made over a lifetime. This extends the effective 10 per cent rate, increasing incentives for business growth and those investing in businesses with growth potential.

These are important measures through which we are providing support for small and growing businesses. Together with the rest of the growth package announced at Budget, these will be funded by excess revenue generated by the 50 per cent levy on excessive bonuses of bankers, which was announced at the Pre-Budget Report and provided for at Clause 22, and by switching spending from within existing allocations. I should add that Clause 2 also maintains corporation tax at 28 per cent, ensuring that we continue to have the lowest rate in the G7, and that the UK is still one of the best places to do business in the world.

Finally, the Finance Bill provides the key tax measures at the heart of our plan to halve the deficit over four years. Clause 1 provides for the new 50 per cent rate of income tax for those earning more than £150,000 per annum, which together with the gradual removal of the personal allowance for those earning more than £100,000 provided for in last year's Finance Act, implements our plans from Budget last year.

The Bill also implements the core aspects of our changes to the pensions tax regime at Clauses 24, 49, 50 and 71, restricting tax relief on pensions for those earning more than £130,000 as well as further anti-forestalling provisions. In providing these reforms now, we have had to balance the need to provide certainty and allow industry and individuals time to prepare with the need to consult further on some aspects of implementation. Clause 24 therefore provides a number of powers that allow the Government to return to aspects of the implementation.

The reforms to income tax and pensions affect only the top 2 per cent of earners-those who have benefited the most from the strong growth in previous years. The Bill provides for further measures announced at Budget or before to support the public finances.

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Clause 9 confirms the planned increase in alcohol duty of 2 per cent above inflation announced at Budget 2008. Clause 69 provides powers to amend the duty definition of "cider" to ensure that particularly high-strength ciders are taxed more appropriately. The Government intend to make these changes in September. Clause 10 increases tobacco duty by 1 per cent above inflation. Increases of 2 per cent above inflation will be made in each of the next two years. Clause 8 provides for the freezing of the inheritance tax threshold for the duration of the next Parliament until 2015.

As part of ensuring a fair and effective tax system, and to ensure that the Government remain on course to halve the deficit, this Finance Bill provides, at Clauses 25 to 59, for a significant package of measures to tackle tax avoidance, non-compliance and offshore evasion. The avoidance measures in this Finance Bill protect around £18 billion worth of yield and raise a further £1.5 billion of revenue by 2013. I believe the choices that we have made to date in dealing with one of the most turbulent economic periods in modern times have been the right ones. We have stabilised and begun to rebuild financial services. We have supported the economy, businesses and families and the outlook is continuing to improve. The economy is growing again, the labour market is easing and families and businesses have weathered the storm well.

We have to continue to make the right choices, not just to secure the recovery but to reduce borrowing after the costs of the recession and to improve our outlook by investing in the long-term capabilities of the economy. The measures in this Finance Bill will help to support our economy, the public finances and Britain's future, and I commend it to the House.

12.39 pm

Lord Mackay of Clashfern: My Lords, I want to take this opportunity in the gap to raise two matters. The first relates to the provisions on the very popular and useful ISAs which are continuing and for which allowances have been raised. This was referred to by the noble Lord, Lord Myners, in his Answer this morning in relation to how savers are being helped.

I was disturbed to read in the press not long ago-although one always has to be careful about what one takes from the press; and that is why I want to raise this issue-that these ISAs provided by the banks are sometimes used in such a way as to deprive the people who invest in them from receiving the full interest on the money that they invest. I believe that globally this amounts to a large sum. A lot of people have taken up these ISAs and it is rather serious if they are in effect being short-changed by the banks. I hope that the Minister can help me on that.

My second point is that the Chancellor mentioned that proceeds from the bonus tax that was introduced are much greater than was anticipated. That shows that the banks have determined to go for the bonuses, notwithstanding the tax. In other words, that particular method has not significantly reduced the amount of money that is going out in these bonuses.

I am grateful to the noble Lord, Lord Oakeshott, for allowing me to speak before him.

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