Finance (No. 2) Bill — House of Lords, 2018-03-08
Topic: Macroeconomics
Susan Kramer (Liberal Democrats, Centre to centre-left): My Lords, I suspect that nearly everybody sitting in this House will struggle to recognise the extraordinarily rosy picture of the economy that the Minister just described. Just about every single one of the markets to which we export and to which our economy is usually tied are absolutely going gangbusters, with extraordinary levels of growth. Normally, even by doing nothing, we would be pulled forward into high growth numbers by that alone. Instead, we are struggling at around 1.7% to 1.8% growth, and if the Government are not worried by and anxious about that, then frankly I wonder where the captain has gone—he is certainly not on the deck Investment numbers in this country have fallen off a cliff. Obviously a large part of that is driven by Brexit uncertainty. We get the occasional investment that hits the headlines, but overall the numbers are down very significantly, and if the Government are not worried about that, I am even more concerned The OBR has readjusted its trend forecast for productivity down to 1.2%. That is extraordinarily bad news and reflects a set of very fundamental problems, which this finance Bill does not begin to tackle. I accept that it is an extremely deep-seated problem, but if the Government do not recognise the consequences of that for our economy at large, again I am very concerned. If the Minister thinks of this in terms of ordinary people and talks to them about the squeeze on their wages, which have remained stagnant as they see prices consistently increasingly, he will begin to understand that this is not an economy firing on all cylinders and racing ahead. In fact, it is almost inexplicably behind where anyone would have expected it to be in general global circumstances Obviously, a good part of this is about the ticking time bomb of potential Brexit. I also fully understand that, because of that, the Chancellor did not use this finance Bill to take major steps forward: it is not a visionary finance Bill but very much a tinkering at the edges finance Bill, because he knows he is sitting with an unexploded bomb and has absolutely no idea of when it might go off, how it might go off and which part of the economy it might hit first or second, and is therefore trying to give himself as much flexibility as possible to react spontaneously as all of those things begin to hit. I suspect that we will have much more extensive discussion of this next week in the debate on the Spring Statement, when we will also have some new figures from the OBR to underpin that discussion I will address just two things today, both very briefly. One is the absolutely core issue of funding for the NHS. The Minister will remember that, prior to last November’s Budget, the NHS basically came forward and said that it needed an additional £6 billion a year just to be able to sustain the system—£4 billion for the NHS and £2 billion for social services. Whichever way you add it up, the Government came forward with only £2 billion out of that needed £6 billion An amendment to this finance Bill proposed by my right honourable friend Sir Vince Cable asked the Government to task the OBR with looking at a hypothecated, dedicated tax to support the NHS—particularly around the issue of 1p in the pound on income tax that we, as a party, have proposed—to see what the yield would be. There is also a much more fundamental issue. We are running into a long-term crisis and this bullet cannot be dodged unless the Government are willing to take action. Will the Minister take on board and pursue this absolutely vital issue The second area is tax evasion. Yes, the Government have made some improvements and I am always pleased to hear that. But frankly, until the coach and horses of an absence of public registers of beneficial interests in our overseas territories is taken care of, we are allowing an avenue that constantly provides the transit route to money laundering in this country and therefore to tax evasion and all the other kinds of evils that go along with it. They are moving to central registers, but those are not going to be public. I hope that the Government will one day realise that they must bite the bullet on this issue, rather than looking the other way. I understand that they feel that there are constitutional problems in dealing with the overseas territories, but the consequence of that is that all the other measures are basically piffling by comparison This was a tinkering at the edges Budget. I know that the Government talked about significant changes to housing, but they are going to be very much at the margin and the edges. We know from previous stamp duty holidays that they do not change the pattern of buying in any way whatever. They may be popular but they do not change either supply or demand. In none of their programmes are the Government tackling the fundamental issue of the lack of affordable housing. If they do not allow local authorities to go ahead—whether alone or in partnership—and build the new, needed, affordable houses where they are required, we will not begin to see an end to this particular set of problems I look forward to the Spring Statement next week to see whether it makes some radical change that enables us to move forward significantly. This is a small Bill, making small, fringe changes in a set of circumstances where new vision and radical action are required.