The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, the Government are considering this question and welcome representations from interested parties. They will set out their approach in due course.
Lord Lee of Trafford: I am grateful for that Answer. I had hoped that the noble Lord might achieve instant popularity by giving a rather more positive Answer, but we obviously welcome him with his considerable City experience. At 30 April, 1,250 shares were quoted on the Alternative Investment Market with a total capitalisation of £64 billion. The Stock Exchange believes that capital raising would be much easier if AIM shares were made eligible for ISAs. In broad terms, a decision by the Government would be tax-neutral. Given that shares quoted on the Channel Islands Stock Exchange are eligible for ISAs, does the Minister agree that it is time that the Government changed their decision and gave investors the choice?
Lord Sassoon: I agree with the noble Lord that there are 1,250 companies on AIM, but of those about 750-60 per cent-have a market capitalisation of less than £25 million. I also remind your Lordships that the purpose of the ISA was to hold mainstream products, so there is a tension between the very many smaller companies on AIM and the fundamental purpose of an ISA. The Government have a number of schemes for assisting the capital raising of smaller and medium-sized companies. I have not seen any evidence that it would be materially easier for those companies, albeit that there clearly would be some effect at the margin, if AIM shares were included in ISAs.
Lord Bilimoria: Does the Minister, whom I congratulate on his appointment, recognise that this is an anomaly? AIM was set up, I think, under a Conservative Government in the 1990s to encourage investment into small and medium-sized enterprises, into growing companies. Surely the Government realise that we have to encourage that investment. Why should this be disallowed? AIM is a recognised exchange run by the
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Lord Sassoon: As has already been pointed out, AIM has been enormously successful, with 1,250 companies listed. The money raised on AIM has helped more than 3,100 companies. Since the start of the market £67 billion has been raised at admission and through further fundraising, which includes more than £16 billion raised by 1,800 smaller UK companies. AIM has been very successful in helping the financing of the smaller and growing market.
Lord Sassoon: I thank the noble Lord for his question and I was wondering when we would get some more of the candour shown in yesterday's remarks. I know that the question of capital gains tax is of interest to many noble Lords. The coalition Government believe that the tax system needs to be reformed to make it fairer and simpler, and that is why we will increase the personal allowance for income tax to help lower and middle income earners. To fund this, we are carefully considering the various options for taxing non-business capital gains at rates closer to those applied to income while ensuring that there are generous exemptions for entrepreneurial business activities. Reforming CGT will ensure that those seeking to avoid paying income tax by converting their income into a capital gain will pay their fair share of tax. Further details on the coalition Government's proposals will be provided at the Budget.
Lord Forsyth of Drumlean: My Lords, in welcoming my noble friend to his new position, could I ask him to look at this again? The noble Lord, Lord Myners, indicated in the last Parliament that this issue was the subject of a review and that we might get a response in due course. How long is "in due course"? Does not my noble friend agree that small and medium-sized businesses are the key to expanding prosperity and jobs in our country? Making this small change-which as the noble Lord said is an anomaly-will open up the possibility of investors being able to invest, and being "all in this together", to create a recovery in our country. Surely we need a response.
Lord Sassoon: First, I regret that I cannot say why the previous Government made no progress on their promised consultation. As I have said before, the new Government, who have not been in office for very long, are considering this question and we will set out their approach in due course. In the mean time, I stress that we welcome the views of interested parties. I should also stress that we are looking at a whole range of issues related to SME financing, which I agree is an extraordinarily important matter. The range of issues relates as much to bank lending and keeping the flow of credit going as it does to raising equity.
Lord Eatwell: My Lords, I begin by welcoming the noble Lord to the Front Bench and saying how much I am looking forward to our discussions in the coming
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Lord Sassoon: I am grateful to the noble Lord for his welcoming remarks, and for pointing out the advantages that AIM shares carry. That allows me to make the point, for those who would like to see AIM shares included in ISAs, that the consequential could be that AIM shares, if one follows through his logic, would lose some other benefits, principally that of inheritance tax relief benefit.
Lord Newby: My Lords, within 10 days we are going to have a Budget which will contain much more complicated issues than this which the Government will have to take time to look at and reach a decision on. For this purpose, can I suggest to the Minister that his definition of "in due course" might mean the next Budget day?
Lord Christopher: My Lords, I declare an interest as chairman of a small investment management company that markets ISAs. Does the Minister agree that there is another side to the growth coin-the risk to potential investors? The number of people who invest today without really understanding what they are doing is extremely worrying. We have seen plenty of examples of irresponsible marketing and I hope that the Minister will take into account the views of the FSA on risk, which should be made clear to potential investors.
Lord Sassoon: I am grateful to the noble Lord for pointing this out. When ISAs were introduced in 1999, they were intended to be for mainstream investment products so that they would be well regulated and investors would be protected from too much risk as well as having easy access. I take the noble Lord's point.
To ask Her Majesty's Government what contribution they will make to the work required to achieve progress on the Treaty on the Non-Proliferation of Nuclear Weapons following the resolution passed at the review conference in May.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, as we promised on taking office, we pushed hard for agreement of a final document at the Nuclear Non-Proliferation Treaty Review Conference. We will give the highest priority to reversing the spread of nuclear weapons, keeping them out of the hands of terrorists and cutting their numbers worldwide, and we will work with partners to translate those commitments into action.
Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for his Answer. There was considerable acclaim at the conference for the UK's leadership role over the past few years in the verification of the disarmament process and, in particular, for our work with Norway. Will he ensure that the Government continue that work, that it is resourced and that Aldermaston retains and develops the expertise needed? Without those practical steps, wishes will remain aspirations as opposed to realities.
Lord Howell of Guildford: My Lords, I thank the noble Baroness. Her concern about and interest in these matters is second to none. At the review conference, it was felt that the treaty had been, thankfully, revitalised and a series of action plans and activities were agreed between the participants, including an action plan for existing nuclear powers; an action plan for non-proliferation checking, although, of course, we have a long way to go on that; civil nuclear energy co-operation; verification procedures with Norway, to which the noble Baroness referred; strengthening nuclear security controls; and calling a regional conference in the Middle East to discuss possible Middle East freedom from weapons of mass destruction. This is a big achievement-a big step-and we should be very grateful that we have managed to make this kind of progress.
Lord Harris of Haringey: My Lords, the IAEA's illicit trafficking database has recorded 336 incidents involving unauthorised possession of nuclear materials and associated criminal acts in the past 15 years. There have also been incidents of terror teams carrying out reconnaissance of nuclear weapon trains in Russia. Can the noble Lord tell us, first, whether Her Majesty's Government are satisfied with the security arrangements around the nuclear facilities in this country and what steps they are taking to protect them? Secondly, what steps are they taking to ensure that security arrangements around both civil and military nuclear facilities elsewhere are being properly maintained?
Lord Howell of Guildford: I thank the noble Lord for his question. We are satisfied, but we are always on guard and always watchful for any need for improvement. The international security of nuclear materials was discussed, analysed and strengthened at the Washington conference in April that preceded the nuclear NPT review conference. A whole series of measures was put forward there and agreed. In so far as one can, one can say that these measures are a step forward in what is undoubtedly, as the noble Lord fully realises, a very dangerous situation.
Lord Hannay of Chiswick: My Lords, will the Minister accept my congratulations to both the Government he represents and the previous Government, since they overlapped during the NPT review, on the work that they put in to achieve a consensus outcome, which I agree was a major step forward? Will the Government press the Secretary-General of the UN extremely hard to appoint a facilitator for the 2012 conference on a nuclear weapons-free Middle East, which has now been decided on, so that a really distinguished, impartial person can get down to work on this very difficult
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Lord Howell of Guildford: I am grateful to the noble Lord. Part of the action plan for the existing nuclear powers is to involve the UN Secretary-General much more closely and to seek his co-operation in the directions that the noble Lord has described. I cannot vouch for the precise patterns which he will follow, but his full involvement in these matters is a major intention of the signatories to the new conclusions.
Baroness Williams of Crosby: My Lords, the Minister described the excellent outcome of the Nuclear Non-Proliferation Treaty Review Conference. However, the great bulk of non-nuclear powers decided to press for a nuclear weapons convention to abolish nuclear weapons completely by 2025. In the light of that, will the nuclear posture review, which has been welcomed and mentioned by the coalition Government, look into how far we can make precise the future steps towards disarmament that we shall take as a Government? Will it also look at the future of the British deterrent?
Lord Howell of Guildford: My Lords, I am grateful to the noble Baroness, who obviously has enormous knowledge of this subject. The idea of a nuclear weapons convention is a fine one, but we take the view, as I think do other Governments, that it is in practice a question of one step at a time. We want to try to move towards the Comprehensive Test Ban Treaty and the Fissile Material Cut-Off Treaty. A whole series of things need to be done before one comes to the happy situation where the nuclear world is disarmed and a convention could then get full support. If we try to rush to a convention first of all, we might end up delaying the detailed work that is needed on the path to get there.
Lord Dubs: My Lords, I am trying to think what "afresh" means. Will the Minister confirm that the Council of Europe yesterday gave the British Government three months in which to comply with a ruling of the European Court of Human Rights and that the previous Labour Government were committed to doing so? Will the Minister give some indication whether "afresh" means "some time" or "not likely"?
Lord Bach: My Lords, as the Minister will recall, this question has been asked many times in this House during the past 18 months. Before the election, the Conservative Official Opposition were strongly in favour of the steps taken by the then Government to implement the ECHR ruling. The Liberal Democrats were equally strongly against our approach, accusing the then Government of dragging their feet, so I think that the House would be grateful to know the view of the present Government. Why is there no mention of this issue in The Coalition: Our Programme for Government? Is the issue not important enough for the document, or is it just too difficult?
Lord McNally: That comes from a Minister who did not even get "afresh" into any of his answers over a long period of time. He will be well aware that the court slightly moved the goalposts, in its decision of 8 April on Frodl v Austria, which narrowed even further the terms under which votes could be denied to prisoners. Given that and the fact that Ministers have just come into office, I think it perfectly reasonable that we be given some time to look at this. At the meeting of the Council of Europe in September, we intend to fully update the council on our thoughts on this matter.
The Earl of Onslow: My Lords, I was on the Joint Select Committee on Human Rights when this judgment was made, and I hoped at the time that grass would be heavily fertilised around this issue. It is the sort of judgment that does not really help to bring the general issue of human rights to the forefront of an Englishman's mind. That is something that I regard as extremely important. We should be clear on human rights-and we should allow grass to grow in great dollops around issues such as this one.
Lord McNally: I think that the noble Lord's Question was about whether the Government were committed to the basic, underlying human rights commitments in our membership of the council-and that is absolutely true and firm. But as at least two of the former Ministers now gazing at me know, there is a range of options. They were working on an option that might have been quite acceptable to a broad base of British public opinion, but the Frodl judgment has moved the goalposts again. That is why we are looking at the matter afresh.
Lord Corbett of Castle Vale: My Lords, can I tempt the Minister to define "afresh" as meaning a period shorter than the seven years which, regrettably, the last Labour Government took to do nothing about this issue? Is it not an absolute disgrace, given the support all around this House for much more emphasis on rehabilitation of people in prison, in this day and age to deny prisoners the vote as part of that rehabilitation process? It is totally wrong.
Lord McNally: My Lords, my senior colleagues in government are considering this matter. All that I can do is to guarantee that the expertise and experience in this House will be transferred to those colleagues.
Lord McNally: I am not sure that it has support in the editorial columns of the Daily Express or the Daily Mail, but in the broader general public there is a willingness to consider the experience of other countries, both in rehabilitation of prisoners and the kind of punishment meted to them. We will report to the September meeting, and the contributions of this House-both from my noble friend and from the noble Lord, Lord Ramsbotham, I hope-will be taken into consideration.
Baroness Anelay of St Johns: My Lords, may I assist the House? There is plenty of time remaining on this Question. May we hear for the first time from the Cross Benches and then, perhaps, from the Liberal Democrat Benches?
Lord Ramsbotham: My Lords, I suspect that one of the reasons the previous Government took so long to come to no decision was that they were asking themselves, and indeed asking the public through the consultative process, the wrong question. The European Court of Human Rights laid down that every sentenced prisoner had the right to vote. Therefore the question is not who has the right to vote but who does not. In France and Germany, that is decided in court at the time of sentence by the judge according to the crime. Is that approach going to be tried in the fresh look, rather than continuing the sterile one that produced no answer?
Baroness Anelay of St Johns: My Lords, I accept that there is great expertise and a great interest in this subject. We have already heard from the opposition Benches. May we hear from the Liberal Democrats?
Lord Maclennan of Rogart: In reaching their conclusions, will the Government bear in mind that we should in no way give the impression to the less well informed members of the public that we can pick and choose which rulings of the European Court of Human Rights to implement as the Executive determine?
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