My Lords, this has been an excellent debate. It has centred on a financial Bill which scarcely gripped the nation—save those aspects of it which were junked in the early stages, straight after the Budget, with all the controversy which surrounded that. It had a pretty poor parentage in those terms and of course this reception has helped to indicate that the Bill is not a terribly important one in the nation’s affairs. The other aspect of it, with regard to timing, is that we are considering the Bill, as the other place has been considering the Bill in the last couple of weeks, within a week or so of the next Budget and the next financial Bill—so it is not surprising that the Bill has not provoked a great deal of controversy, nor a great deal of approval.
Because of this I feel free to concentrate first on the Economic Affairs Finance Bill Sub-Committee report and congratulate the noble Lord, Lord Turnbull, on his introduction, which made the issue so clear, and the noble Lord, Lord Wakeham, who contributed as a member of that committee. It seems to me that the report puts forward a very clear position, which the Government ought to take cognisance of.
In two concurrent sentences, the report makes its case clear. It says:
“The digitalisation of tax administration in a way that assists taxpayers is … to be welcomed”.
The Official Opposition endorse that wholeheartedly, but it is a question of how we make that work. The next sentence in the report states:
“Where the Government is wrong”,
is in their timetable. We certainly endorse that point as well. Of course, the Government have moved a little on the timetable—but not, we think, far enough.
We put forward an amendment in the other place proposing that there should be more time for people to adjust to the demands of responding to the Inland Revenue than the Government are providing at present. The reason is quite clear. It is thought that 61% of those who are self-employed—2 million people—will struggle with the process of compliance. They may struggle with that process for other reasons as well, because people do not enthuse about paying tax. But what is reflected here is that these people will have the greatest difficulty in meeting the standard requirements of the Inland Revenue for the submission of their returns. We therefore cannot possibly demand that they respond without adequate preparation.
I very much enjoyed the contribution of my noble friend Lord Campbell-Savours, along with the fact that the noble Lord, Lord Leigh, gave him some support. I imagine that they would differ a great deal on detail, but my noble friend identified that there is at least a significant case for the Inland Revenue, and for the Government, to concentrate rather more on wealth than income. We all know how wealth has accumulated in recent years, and how limited the range of that wealth is in the numbers of people who have benefited from it. So it is right that we look at the issues introduced by my noble friend Lord Campbell-Savours, particularly on inheritance tax. I would certainly welcome it if this House engaged in a series of debates on issues as fundamental as this.
If this was the sole area of our criticism of the Bill, it would be serious enough—but we have criticisms of many other features as well. The Minister in his opening speech, which we all enjoyed as we always do when he contributes, made some surprising statements about the strength of the economy. Some responsible opinion, such as that of the Institute for Public Policy Research, has actually said that the economy is broken and “needs fundamental reform”. It is only Ministers who can glibly say that all is well in the world; it seems to me that there is a great deal that needs to be reformed.
The Government persist in lower taxation for the rich and for big companies, while hitting the income of those less well-off very hard—even to the point where those who depend on universal credit are meant to sustain themselves, devoid of any resources from welfare, until the issues are sorted out. If that continues to happen as we run into the Christmas period, and if people find themselves unable to meet their bills and therefore get ejected from their homes, this Government will not know what has hit them.
This is nothing to do with taxation but on one occasion, I found that one of my great boyhood heroes when I was a young cricketer, the wonderful spin bowler from the West Indies, Sonny Ramadhin, happened to be a publican in the town that I represented. The brewery decided that it wanted to take possession of the pub and throw him out on Christmas Eve. How very thoughtful. How very considerate. This was a man who had won the plaudits of nations—I say “nations” because the British approved of him as much as the West Indians in the tests. He was thrown out on Christmas Eve. You should have seen how that stirred the people of Oldham. Corrective action was taken quite quickly. If this Government are heading for that kind of conduct over the next month or so because of the way in which they are implementing universal credit, I warn them that they are in for a very difficult time indeed.
The Government present what I think is a somewhat rosy picture of the strength of the Inland Revenue. From the very first day that they came to office, we were anxious about cuts in HMRC. Within a year it was quite clear that the cuts there were the same as those in other departments. It did not matter how much we told the Government that they were in fact cutting jobs and people who were bringing in revenue, they persisted. They persisted all through the days of austerity. The Minister is trying to pretend to me now that in fact the Inland Revenue is quite able to reach its requirements. One of the things that is going on in the Inland Revenue at present is a very significant cut in the number of offices and the creation of the regions. I have no doubt that that fits some grand plan somewhere that will be efficient in the long run, but in the short term and where we now want the Inland Revenue to be effective, it is bound to have deleterious effects.
Do the Government understand the diversity of UK society at present? How can they talk well about an economy when people under 30 have very little hope of matching the living standards of their parents? Housing is far too expensive for them to be part of the property-owning democracy—except for the favoured few—and rents rocket up in the private sector for all
the reasons we know only too well. Over this period of austerity, wages and salaries have been frozen, particularly in the public sector, and jobs have often been replaced by zero-hours contracts and jobs which bear no resemblance to the public sector jobs that they have replaced.
People should envisage what it means to work for an employer who has such power in relation to the so-called contract that you actually have not got with him. He can tell you to sling your hook, basically, at a moment’s notice. If we have that kind of society, the Government cannot boast about full employment too much if quite a percentage of jobs fit into this pattern. Without wage growth, what is happening? At present, inflation is dashing past the rise in wages and people are being impoverished by that fact. Housing inflation, in particular, means that there is no hope for so many who would otherwise aspire to own their home.
That is about people who live in our country and try to cope within this flourishing economy—but the national statistics bear out the limitations of this Government as far as the economy is concerned. We have the lowest productivity in the G7. Germans are able to produce three times as much as we can in the same unit of time. The trade imbalance is still increasing and Britain is finding it very difficult to make its way. There are great disparities between incomes and wealth in London and the south-east, and the rest of England and the rest of the United Kingdom—Wales, Scotland and Northern Ireland. These are all indications of an economy about which the Minister, far from being complacent, ought to be concerned. He should demonstrate how the Government are analysing their response to these great issues.
Under it all of course is the great uncertainty of Brexit. We all recognise that Brexit is a massive challenge for the Government, but the Minister must recognise that the time delay that is going on before any definition of progress with regard to the negotiations means that of course business confidence is very severely affected.
This is a finance Bill whose only merit is that it will in fact be supplanted by another one in the very near future.
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