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House of Lords

Tuesday, 22 June 2010.

2.30 pm

Prayers-read by the Lord Bishop of Liverpool.

Introduction: Baroness Hayter of Kentish Town

2.38 pm

Dianne Hayter, having been created Baroness Hayter of Kentish Town,of Kentish Townin the London Borough of Camden, was introduced and made the solemn affirmation, supported by Lord RadiceandBaroness Royall of Blaisdon, and signed an undertaking to abide by the Code of Conduct.

Introduction: Lord McAvoy

2.44 pm

Thomas McLaughlin McAvoy, having been created Baron McAvoy, of Rutherglen in Lanarkshire, was introduced and took the oath, supported by Lord Foulkes of Cumnock and Baroness Adams of Craigielea, and signed an undertaking to abide by the Code of Conduct.

Death of a Member: Lord Laing of Dunphail


2.49 pm

The Lord Speaker (Baroness Hayman): My Lords, I regret that I have to inform the House of the death of the noble Lord, Lord Laing of Dunphail, on 21 June. On behalf of the House, I extend our condolences to the noble Lord's family and friends.

Northern Ireland: Public Expenditure


2.50 pm

Asked By Lord Rana

Lord Shutt of Greetland: My Lords, Northern Ireland, like the rest of the United Kingdom, will need to play its part in reducing the budget deficit, but as the Prime Minister said recently, it will not be targeted for cuts above any other part of the United Kingdom. The Government remain committed to working with Northern Ireland Minsters to boost the Northern Ireland economy

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and to supporting the devolved institutions provided for by the Belfast, St Andrews and Hillsborough Castle agreements.

Lord Rana: Does the Minister accept that, given the impending pressures on the public sector, it is essential to promote a much stronger private sector in Northern Ireland, with a solid core of high value-added jobs? I therefore ask the Government to implement urgently the pledge given by the Prime Minister before the general election to produce a government paper examining how the corporation tax rate in Northern Ireland can be changed to attract more investment to the region. In asking this question, I declare my interest as former president of the Northern Ireland Chamber of Commerce and Industry, when I campaigned for it, and as a businessman from Northern Ireland.

Lord Shutt of Greetland: My Lords, I thank the noble Lord for his supplementary question and acknowledge his experience in adding to the private sector in Northern Ireland. I can advise him that my right honourable friend the Chancellor of the Exchequer confirmed today in his Budget Statement in another place that the Government, in consultation with the Northern Ireland Executive, propose to publish a paper on rebalancing the Northern Ireland economy which will examine potential mechanisms for changing the corporation tax rate in Northern Ireland.

Lord Smith of Clifton: My Lords, when allocating resources in the future, will the Government take into account the recent recommendations of the Select Committee on the Barnett formula, which said that Scotland had far too much, Wales had far too little, Northern Ireland needed a little more and England needed some more?

Lord Shutt of Greetland: My Lords, the Government have no plans to review the Barnett formula until the fiscal stabilisation plans set out in the Budget have been worked through. However, that report is still valid and will be considered at the due time.

Lord Dubs: My Lords, further to the answer that the Minister has just given, does he agree that the problem with the Northern Ireland economy is not that the public sector is too large but that the private sector is far too small? Does he further agree that reducing corporation tax to the same level as that in the Republic may be a very sensible move, but that the private sector will need more to boost the economy than simply that?

Lord Shutt of Greetland: The noble Lord is right: the biggest problem is that the private sector is far too small. However, there clearly is a difficulty when the corporation tax rate in the Republic of Ireland is 12.5 per cent-a matter which has been steadily addressed here. Northern Ireland does need more private sector jobs. It is interesting to note that between 2002 and 2010, something like 7,500 jobs were created by businesses from the United States. I have no idea what footloose industry there is about, but Northern Ireland has nevertheless gained those 7,500 jobs, and that was only the top five in that period.

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Lord Barnett: My Lords, the noble Lord said that the very important report of the Select Committee on the Barnett formula would be considered in due time. Would he care to define the meaning of "due time"? Does he appreciate that the Chancellor has just announced that in the autumn there will be departmental cuts in public expenditure of some 25 per cent? Does the noble Lord recognise that if this is not noted and taken care of, there will be very serious problems in England?

Lord Shutt of Greetland: My Lords, it is not for me to take a view on when that time will be. I am not able to indicate when it is-

A noble Lord: Why not?

Lord Shutt of Greetland: Because I don't know. If I knew I would tell him-but there we are. The noble Lord, Lord Barnett, introduced his paper a third of a century ago and we are still talking about it. I accept and personally take the view that the Barnett formula should be looked at again. The present position is that it will be looked at again, but in due time.

Lord Forsyth of Drumlean: My Lords, can the Minister help me? I thought that the coalition Government's policy was to implement the recommendations of the Calman report-which specifically said that we should move to a needs-based system of funding, in line with the unanimous recommendation of the committee of this House which looked at the Barnett formula in great detail not some time ago but in the last Session of Parliament.

Lord Shutt of Greetland: My Lords, the need for "due time" is also apparent with the Calman report. It is a matter for consideration by the coalition Government.

Viscount Brookeborough: My Lords, in agreeing with the noble Lord, Lord Dubs, is the Minister actually saying that the public sector is not too large in Northern Ireland? Recognising that Northern Ireland is the same size as Yorkshire, and all the education boards and very high employment in the public sector, we in Northern Ireland believe that it is too large. Why does he not?

Lord Shutt of Greetland: My Lords, I am aware of the size of Yorkshire-and these sorts of comparisons are useful from time to time. I take the view that the public sector in Northern Ireland is too large when compared with the private sector, but there is no doubt that the private sector is far too small.

Disabled People: Independent Living


2.58 pm

Asked By Lord Ashley of Stoke

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Baroness Northover: My Lords, we are committed to supporting people with disabilities to live as independently as possible. This Government intend to ensure that disabled people get the care they need, while assisting them to have control over their lives, with support tailored to their personal needs.

Lord Ashley of Stoke: My Lords, I thank the Minister for that response. It certainly seems to be promising. Is she aware that some will take a very dim view of any increased expenditure on disabled people-especially now-and say that the time is not right for giving more money to them? However, in view of recent announcements by Ministers on cuts, is she aware that this is precisely the time when we should be protecting and carefully guarding our most vulnerable people by providing them with the means of independent living?

Baroness Northover: I thank the noble Lord for his comments and pay tribute to him for his tireless work on behalf of disabled people. He kept the previous Government up to the mark and I am sure that he will do the same for us. We will listen hard to what he says. I am encouraged by his comments, and he might note that the Budget emphasised that the poorest and most vulnerable in the current financial crisis must be looked after first: that must be our priority as we seek to tackle the difficult financial situation. That came through overwhelmingly in the Budget that we have just heard.

Baroness Hollis of Heigham: My Lords, does the noble Baroness not agree that had her Government-here I refer to the previous Question-been willing to tackle the issue of the £4 billion overpayment to Scotland, we would not now need to contemplate cuts to disability living allowance that will affect disabled people right across the land?

Baroness Northover: My Lords, we face major financial problems way beyond the one that the noble Baroness has outlined and pinpointed. It is extremely important in this situation that what we do is fair; that we make sure that the most vulnerable in society are protected; and that we take forward the better protection of disabled people. One reason why we are setting up a commission on long-term social care is so that we can take this forward, building on what the previous Government did. I pay tribute to what they did in this field, and we will take that forward.

Baroness Wilkins: My Lords, given the coalition Government's emphasis on localism and the three-year freeze on council tax, will the Minister explain how disabled people with high support needs will have their right to independent living met, in competition with other vociferous local groups vying for scarce resources in the local community and council?

Baroness Northover: We remain very committed to trying to ensure that independent living is taken forward. There is a strategy that we have inherited, and we will look at how best to take it forward. I realise that there is pressure on local government. At the moment, we

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are trying to ensure that this does not have an impact on the most vulnerable. That message has already come through from the Budget. A commission will be set up on long-term care. These are areas that must be urgently addressed because we realise that individuals and their carers and families are under a lot of pressure. We must take this forward in the most effective way possible.

Viscount Tenby: My Lords, the Government favour supported living as an alternative to residential homes. However, because there are quite a number of residential homes still in existence, will funds be made available to enable the transfer to a supported living pattern to take place? I declare an interest as chairman of a residential home for women with learning and physical disabilities.

Baroness Northover: It is extremely important that the kind of provision that best suits an individual is the route that we go down. We must look at what the individual most needs, what they wish to have and what their carers and family feel is most appropriate for them. A lot can be done in different environments. It is very interesting to see how new technology may assist people who wish to stay at home, by ensuring that they can do that safely. There are all sorts of possibilities for people and it is important that provision is led by the individuals concerned.

Lord Addington: My Lords, does my noble friend agree that one of the most important things that can be done is to make sure that when people ask for support and help, they get the right information? Government at all levels has a patchy record at best on this. What resources are being put in to make sure that when you ask a question, you get the right answer; and that the person who is asked the question is confident enough to go away and find someone who knows the answer if they themselves do not?

Baroness Northover: I could not agree more, from personal experience. It is extremely important that the right information is available. Certainly, the previous Government made progress in this regard, and we intend to take this further. It is extremely important that this is looked at from the point of view not of the provider but of the individual. Looking at it from their point of view will help to change the way in which these services are provided.

Baroness Thornton: First, I am sure that the whole House will wish to welcome the noble Baroness to her new position. I know how she must be feeling.

The Minister is concerned about individuals, but the recently announced cuts to local government grants will have a direct impact on the Supporting People budget and will make it more difficult for vulnerable people such as the disabled to live independently in their homes. Is the department monitoring this matter? Personal choice is fine but if your local authority has cut that budget, it does not matter what your personal choice is because the money will not be there to support you.

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Baroness Northover: I thank the noble Baroness and tell her that it is very nice to be approaching 15 minutes on the Clock. I very much support what she says. That is one reason why we are setting up the commission, which must report within a year. It is extremely important that the approach in this area is integrated. We very much want to emphasise the individual and local provision. Obviously, we want to ensure that there are national standards and that unintended consequences do not undermine an individual's experience.

Economy: Growth


3.05 pm

Asked by Lord Roberts of Conwy

The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, today the Government have outlined their plan to support a private sector recovery and create the right environment for enterprise and sustainable growth. It will restore the UK's international competitiveness through lower and simpler business taxation, and through cutting red tape. Fundamental to this strategy is tackling the budget deficit and providing the stable macroeconomic environment needed to underpin private sector investment and growth.

Lord Roberts of Conwy: I am grateful to my noble friend for that reply, supported as it is by the eximious Statement by the Chancellor of the Exchequer earlier today. Does my noble friend agree that, as we cut the record deficit left to us by a prodigal Government, one of the first essentials is to restore the confidence of the private sector to encourage businesses to invest, create jobs and bring about the prosperity that the country really needs?

Lord Sassoon: My Lords, I completely agree with my noble friend Lord Roberts of Conwy. Business confidence will now be underpinned by a credible deficit reduction plan, which will see the current structural deficit in balance by 2014-15. The public expenditure on infrastructure, which this country needs to underpin growth, is being protected and not further cut. Corporation tax will fall from 28 to 24 per cent over four years; entrepreneurs' lifetime capital gains tax relief is being increased from £2 million to £5 million; the national insurance contribution threshold will increase by £21 per week above indexation; the enterprise finance guarantee is being expanded by £200 million to ensure that credit flows to business; and a new regional growth fund will be established. It is estimated that these and other policies will increase business investment by an additional £13 billion up to 2016.

Lord Hunt of Kings Heath: My Lords, as a result of the Budget, how many jobs will be lost and what will the reduction in growth in the economy be?

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Lord Sassoon: My Lords, the independent figures that have been published alongside the Budget by the Office for Budget Responsibility today show that employment will grow in every year of the forecast period from 28.8 million in 2010-11 up to 30.1 million in 2015-16. Growth will also grow from 1.2 per cent in 2011 to 2.3, 2.8 and 2.9 per cent and then, still above trend, to 2.7 per cent in 2015-16.

Lord Broers: My Lords, does the Minister not agree that, if we are to have industrial growth, it is essential that the Government strongly support research budgets in engineering and science? Does he also agree that the recent delay in the funding decisions on some of our largest and most powerful science projects is highly disruptive to those projects? I declare my interest as chairman of the Diamond Light Source, which is Britain's largest science project and strongly supports industry.

Lord Sassoon: My Lords, today my right honourable friend the Chancellor of the Exchequer announced that the spending review will be presented on20 October. As we go through the spending review, it is clearly important that the long-term prosperity and growth of this country are underpinned by appropriate decisions. We have announced today, as I said, that infrastructure will not be cut further. I take the point, put by the noble Lord, Lord Broers, that science spending is also very important to underpinning the long-term growth of the UK.

Lord Newby: My Lords, the Chancellor of the Exchequer said today that he was establishing a large regional growth fund to provide finance for regional capital projects. Can the Minister give some indication of what is meant by "large"? Can he also say whether there will be some private sector involvement in deciding priorities under the fund, a principle that underpins the RDAs, and that such decisions will not be put purely in the hands of unelected regional bureaucrats?

Lord Sassoon: My Lords, I thank my noble friend for drawing attention to the regional growth package in today's Budget announcement. It is intended that the regional growth fund will pump prime investments into projects with significant growth potential. There will be a consultation later in the summer about how we plan for sub-national growth, which will include local economic partnerships. A White Paper will follow.

Baroness Farrington of Ribbleton: My Lords, will the Minister please tell the House how many jobs in the public sector, particularly in local government, the Government anticipate will be lost as a result of the cuts in public expenditure? How many jobs in the private sector will be lost because those private sector companies offer services to local authorities and to the public sector?

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