Vol. 733 Tuesday No. 244 20 December 2011 PARLIAMENTARY DEBATES (HANSARD) HOUSE OF LORDS OFFICIAL REPORT ORDER OF BUSINESS Questions Economy: Private Capital Investment Justice: Personal Injury Cases Cyprus: EU Presidency Bovine Tuberculosis Procedure of the House Motion to Agree House Committee Motion to Agree Draft House of Lords Reform Bill Motion to Agree Electricity and Gas (Carbon Emissions and Community Energy Saving) (Amendment) Order 2011 Motion to Approve Legal Aid, Sentencing and Punishment of Offenders Bill Committee (1st Day) Public Service Pensions Statement Consumer Insurance (Disclosure and Representations) Bill [HL] Report Legal Aid, Sentencing and Punishment of Offenders Bill Committee (1st Day) (Continued) Written Statements Written Answers For column numbers see back page £3·50 Lords wishing to be supplied with these Daily Reports should give notice to this effect to the Printed Paper Office. 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BOUND VOLUMES OF DEBATES are issued periodically during the session. Single copies: Commons, £105; Lords, £40. Standing orders will be accepted. THE INDEX to each Bound Volume of House of Commons Debates is published separately at £9·00 and can be supplied to standing order. All prices are inclusive of postage. © Parliamentary Copyright House of Lords 2011, this publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through The National Archives website at www.nationalarchives.gov.uk/information-management/our-services/parliamentary-licence-information.htm Enquiries to The National Archives, Kew, Richmond, Surrey, TW9 4DU; email: [email protected] 1661 Leave of Absence[20 DECEMBER 2011] Economy: Private Capital Investment 1662 Lord Barnett: My Lords, the Question asked what House of Lords additional facilities the Government have provided. In practice, would the Minister agree that there are no Tuesday, 20 December 2011. additional facilities outside the deficit reduction plan? Indeed, the measures that he has already mentioned 2.30 pm were well taken care of when the OBR reported that growth will be down to 0.7 per cent, which is hardly Prayers—read by the Lord Bishop of Birmingham. helping. In the light of the current economic situation, will the Government consider real, additional facilities Leave of Absence outside the deficit reduction plan? 2.35 pm Lord Sassoon: My Lords, to be clear, the three measures that I mentioned in my opening Answer The Lord Speaker (Baroness D’Souza): My Lords, were indeed new and additional measures, the costings the Conference of Speakers and Presiding Officers of of which are given in the Autumn Statement. the Commonwealth will be held in Trinidad and Tobago in January 2012. Accordingly, I seek leave of absence from your Lordships’ House on 10 January. Lord Lawson of Blaby: Does my noble friend expect that the important changes in the relationship with the Royal Bank of Scotland that the Chancellor of the Economy: Private Capital Investment Exchequer announced yesterday might lead to more Question lending by the Royal Bank of Scotland to small and medium-sized enterprises? 2.36 pm Asked By Lord Empey Lord Sassoon: My Lords, that is a very interesting question. The board of RBS has made it clear that it is To ask Her Majesty’s Government what additional going to concentrate its business on its corporate and fiscal measures they will take to encourage private personal banking and therefore, certainly relative to capital to invest in manufacturing or tradable services its total business, it will indeed achieve that. in the United Kingdom. Lord Anderson of Swansea: My Lords, will the new The Commercial Secretary to the Treasury (Lord enterprise zones be wholly or mainly limited to the Sassoon): My Lords, the Autumn Statement announced manufacturing sector? several measures which encourage private capital investment: an above-the-line research and development Lord Sassoon: My Lords, the enterprise zones are tax credit from 2013, ensuring that the relief continues not limited to any particular sector. to attract large-scale investment in innovation; 100 per cent capital allowances for six enterprise zones; and a new seed enterprise investment scheme in 2012 to help Baroness Kramer: My Lords, the Minister will be early-stage companies. The draft Finance Bill also set aware that the banking industry is not serving this out further steps in wider corporation tax reform. aspect of investment particularly well and that barriers to entry are limiting new banks. Is he therefore observing the growth of peer-to-peer lending and will he give us Lord Empey: I am sure that the Minister will agree some assurance that those new lenders entering the that the best way of achieving long-term financial and market will be appropriately regulated but not to the strategic security for the United Kingdom is to strengthen point of being stifled? our international trading position. A significant increase in our manufacturing capability is one of the best ways of achieving this. Can the Minister tell the House Lord Sassoon: My Lords, we are very interested in whether the Government have any plans to offer increased anything that keeps credit flowing. However, although fiscal incentives to encourage businesses, especially my noble friend is very good at reminding us of that SMEs, to invest in R&D spending? Can he further issue, we are getting a bit far away from fiscal measures. advise whether any additional fiscal incentives are being considered that will create sufficient confidence Lord Eatwell: My Lords, I am sure that the Minister in the private sector to boost investment in manufacturing? will agree with the noble Lord, Lord Empey, that, however low interest rates may be and whatever fiscal Lord Sassoon: My Lords, the first thing to remind incentives may be in place, ultimately investment is the House is that the changes already made in corporation determined by business confidence. Is he aware that tax and the capital allowance regime will in total, in the Institute of Chartered Accountants in England 2015, contribute an extra £700 million in reduced and Wales produces an index of business confidence? taxes to the manufacturing sector. For example, £1 billion In its latest report, it says: of R&D relief was claimed in 2009-10, including by “The Confidence Index has suffered its largest quarterly decline 7,400 SMEs. So this Government are indeed taking since the survey began”. considerable targeted action to support our manufacturers, The survey began in 2004. Is it not clear that the including SMEs, whether by way of encouraging R&D destruction of business confidence is the main outcome or through other aspects of the corporation tax regime. of the Government’s economic policies? 1663 Economy: Private Capital Investment[LORDS] Justice: Personal Injury Cases 1664 Lord Sassoon: My Lords, the best measure of the shown that this measure will cost the Government expected effects of the fiscal measures that I outlined over £100 million, which comprises legal fees, additional in my first Answer is what business organisations have compensation and loss of income from recovered had to say. For example, the EEF, the engineering treatment fees from insurers? This is a folly. It will employers organisation, has said that the R&D tax deter ordinary people from going forward to seek the credit, compensation that is due to them. “will send a powerful signal that government intends to make the UK the number one choice for R&D investment and is another Lord Wallace of Tankerness: My Lords, the step on the road to making the UK the most competitive tax Government do not accept that the measure will deter system in the G20”. people from coming forward. As I indicated, the reforms I could give the noble Lord similar quotes from the brought in by my noble and learned friend Lord CBI and others. Mackay of Clashfern in the 1990s, which introduced the no-win no-fee conditional fee agreements, allowed Baroness Wheatcroft: My Lords, large companies people suffering from personal injuries to come forward are sitting on almost unprecedented amounts of cash and pursue their claims. We are not satisfied that at rather than investing it. Would the Minister consider present there is a proper proportion with regard to the means of encouraging those companies to invest in amount of fees charged, particularly where the claimant smaller companies and nurture them? has no interest in ensuring that they are kept within modest means. The system has got out of proportion; Lord Sassoon: My Lords, we are always open to our reforms seek to bring it back into proportion. new and imaginative suggestions. Large companies have been talking to us positively about how to develop Baroness O’Loan: Is the Minister satisfied that there the supply chain and encourage their smaller suppliers. will be equality of access to justice for the very poorest victims of clinical negligence in circumstances in which Lord Brookman: As one of those turkeys not voting they must bring their action against public authorities, for Christmas, I ask the Minister to put to bed for ever whose defence will be funded by the state? a comment made to me some years ago.