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House of Lords (Members’ Taxation Status) Bill [HL]

The Bill, relating only to the House of Lords, raises an issue that I think should have been raised in a general purpose debate and then discussed within the House and the usual channels. It should not be presented in this way, as an attempt to drive through Parliament a Bill that impacts upon a particular group of people. After what was said, not recently, by the Conservative Party in an article attacking the noble Lord, Lord Sainsbury, who was a very good Minister and did a lot of good for this country, and what was said by others who, in the attempt to deal with cash for peerages, sought to knock each other and Members in this House, which is not normal practice and never has been, my concern is that within the international community in London, where I have worked, on and off, all my life, there is now a groundswell of nervousness and anxiety. It was started by Mr Cameron when he made a political speech saying they would tax foreigners in order to pay for a lack of Treasury revenue. That was followed up by the Prime Minister and the Liberal Democrat Party which has asked for harmonisation of taxation throughout Europe. The worry here—I cannot nod my head—for me is the impact upon the economy. Without wishing to bang on, but I shall bang on for a bit, I want to take noble Lords back to the basis of the economy which historically, when I was involved in the trade world, was based upon balance of payments surpluses, mainly in manufactures. For years we had surpluses in manufacturers because we were a manufacturing industry. Then at the time when I was on the Audit Committee with the noble Lord, Lord Ezra, and others in this House, we looked for some years at what would happen to the economy when oil ran out. I have to say that we were not predicting $100 a barrel or anything like that, but it was said that that was the time when the United Kingdom should reinvest heavily in other activities and industries. There were investments. There were high-tech investments. There was a silicon valley, where 50 per cent of all the computers in Europe were made, in Scotland, near Glasgow. There was also the silicon road down to Bath where high technology came and service industries began to spring up. But gradually the manufacturing base was eroded almost completely. Even some of the more brilliant developments, such as the Dyson machines, were made outside the United Kingdom. So the balance of payments in our economy ceased to be based on manufactures. It was therefore based on services. In the days when I was on the committee for trade in invisible exports, services were deemed to be financial services such as insurance, banking, accountancy and consultancy activities, but there was also a range of other smaller manufacturing and service industries. Gradually, other than at the high level, many of these services have been exported, for example, telephone answering systems, to India. So what is the basis of the economy? It is not based just on the City of London. At the high-tech level, particularly in medical research and health, we are very advanced in the engineering but we are not very good at the application. The noble Lord, Lord Desai, and I have discussed these matters for many years. I am worried that the statements that have been made about taxation are causing concern among members of the international community living in London and the United Kingdom within a free market economy. I may be wrong but this area is a large part of my life. I have been president of the Anglo-Swiss Society for many years. Its members always agree that taxation is a trade weapon. We have used it as such in the United Kingdom in giving tax allowances to people who built ships and people who imported things and then reused them. We started business capital leasing in a big way and even double-dip leasing. We led the field in airlines not owning their own airplanes.