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House of Lords

Monday, 28th February 2000.

The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers--Read by the Lord Bishop of Southwark.

Greater London Authority: Election

Lord Clement-Jones asked Her Majesty's Government:

    Whether they have any plans to postpone the election of the London mayor and assembly.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): No, my Lords. The Government intend the Greater London Authority election to be held on 4th May, as planned. We therefore laid a slightly modified set of election rules on 23rd February, and plan today to re-lay the election expenses order.

Lord Clement-Jones: My Lords, I thank the Minister for that Answer. However, is it not clear that these problems would not have arisen if the Government had not tried, in the words of my noble friend Lord McNally, to "fix and fiddle" the London election? Is it not the case that a freepost is what 5 million Londoners want, and should have?

Lord Whitty: My Lords, as the name of the noble Lord, Lord McNally, has been mentioned, I offer my congratulations to him on being able to recite the second verse of "The Red Flag" on radio yesterday. I mention that because he, too, is familiar with fixing and fudging. If we were trying to fix and fudge the Greater London election, we have not made a very good job of it! Our concern throughout has been that all candidates should have a level playing field and that the process should not be subject to abuse. Therefore, as I explained at some length the other day, we are looking to ensure that candidates can get their message across without opening up the process to abuse and vast expenditure. We are in discussion with the other parties on the way in which that can be achieved. I believe that when we consider the Representation of the People Bill tomorrow, all parties will concur that we have found a way out of the difficulty.

Lord Pilkington of Oxenford: My Lords, would not the Minister like to encourage independence--I say that without prejudice--and, therefore, does he agree that the lack of a free mailshot places enormous power in the hands of the party machine, both mine and his? Would not the noble Lord like to encourage independents to stand for election as mayor, both in London and in other cities?

Lord Whitty: My Lords, I fear that if I were quoted as saying that I wished to encourage independents, it

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might well be misconstrued at this point! We want anyone who has the requisite number of signatures and who is prepared to run a proper political campaign for the post of mayor to have access to all means of communication with the public. We believe that we shall find a way of doing that which does not lead to the kind of abuse about which I was worried.

Internet and Technology Stocks

2.38 p.m.

Lord Phillips of Sudbury asked Her Majesty's Government:

    Whether they are concerned about the social and economic impact of the rise in value of Internet and technology stocks.

Lord McIntosh of Haringey: My Lords, the values placed by the stock market on Internet and technology companies reflect investors' expectations of their future earnings.

Lord Phillips of Sudbury: My Lords, I am sure that everyone will be as impressed as I am by the succinctness, if not the wisdom, of that reply. Is the Minister aware of the enormous demoralisation that has been caused over recent years to key groups of employees such as teachers, those in the medical professions, social workers and the rest by the immense and growing disparity in remuneration between them and the City? Is he further aware, therefore, of the damage that will be done, and is being done, to the willingness of those groups and many others to remain within education, health and social work by the extraordinary casino-like activity in respect of technology stocks? Is there not a scintilla of socialist wisdom remaining from the present Government's long past on which they can draw to exert some control over what is, by any reckoning, something of a Stock Exchange farce?

Lord McIntosh of Haringey: My Lords, I am glad that in the latter part of his supplementary question the noble Lord got round to the subject matter of his original Question, which enables me to attempt to answer it. Yes, of course there is huge resentment about the disparity in incomes between those who are seen as gamblers and those who devote their lives to public service. That is only natural. I do not know whether it was George Soros himself or someone commenting at the time of George Soros' major coup who described the stock market as alternating between greed and fear. For that reason especially, I do not think it right for the Government to attempt to second-guess the stock market.

The Earl of Northesk: My Lords, perhaps I may take this opportunity briefly to congratulate noble Lords opposite on their birthday. Is the Minister aware that the number of private investors buying shares on the Internet in Britain is reportedly doubling every three

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months? Are the Government satisfied that the message from Christine Farnish, director of consumer relations at the FSA, that

    "Consumers investing their money in smaller company shares need to know that the prices of those shares can be very volatile--both up and down. They need to think carefully about the risks involved before deciding what shares they buy and how many",

is being adequately disseminated?

Lord McIntosh of Haringey: My Lords, on behalf of all my noble, right honourable and honourable friends, I am grateful to the noble Earl for his congratulations. As regards the proceedings at the Memorial Hall, I was never quite sure whether the final decision was for the 27th or the 28th, which is possibly why we have been celebrating both days--and why not? The remarks from the FSA quoted by the noble Earl sounded very sensible to the Government at the time. I am sure it is in everyone's interest that investors, particularly private investors, should be aware of the difficulties and dangers referred to. We are grateful to the noble Earl for disseminating them more widely.

Lord Skelmersdale: My Lords, I hope that I misunderstood the Minister. He said that in his view Internet entrepreneurs were gamblers. I hope that that is not true. If the gamblers to whom he referred in an earlier supplementary answer are those who invest on the Internet, why should not doctors and the other people to whom the noble Lord, Lord Phillips of Sudbury, referred profit in exactly the same way as any other investor?

Lord McIntosh of Haringey: My Lords, the noble Lord has doubly misunderstood me. I certainly did not say that Internet entrepreneurs were gamblers. In response to the noble Lord, Lord Phillips, I said that those who worked in the public service resented the difference between them and those whom they regarded as gamblers. I did not myself use the word "gamblers". However, it is true that the Internet and information technology generally make a huge contribution to the success of this country, and it is important to encourage it in every way. Whether that leads to a particular valuation of any stock is a matter for those entrepreneurs and the market, not the Government.

Lord Bruce of Donington: My Lords, can my noble friend assure the House that the Government have already taken into account the grossly artificial values reflected in some very prominent stocks at the present time? In particular, can the Minister tell the House how the Government will deal with the very serious questions that will arise when the bubble inevitably bursts?

Lord McIntosh of Haringey: My Lords, I am not sure that I fully understand what my noble friend recommends the Government should do. We cannot intervene directly, or even indirectly, in free markets; that is not our role. We do not seek to second guess the

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markets. I also made clear in response to the noble Earl, Lord Northesk, that we agree with those in the Financial Services Authority in particular who express caution about some of these stocks and advise great caution on the part of investors. It appears likely that a large number of those stocks which are valued very highly without ever having shown a profit will collapse, as my noble friend suggests. However, that is not a recipe for the Government to intervene.

Gay Relationships: Inheritance Tax Laws

2.45 p.m.

Baroness Rendell of Babergh asked Her Majesty's Government:

    Whether they will consider granting the same property rights to gay and lesbian couples in respect of exemption from inheritance tax as those now enjoyed by married couples.

Lord McIntosh of Haringey: My Lords, we are committed to fairness in taxation, and the Chancellor of the Exchequer keeps all aspects of the tax system under review.

Baroness Rendell of Babergh: My Lords, I am grateful to my noble friend for that reply. Is he aware that at present the partner in a gay relationship with a higher earning capacity may be obliged to take out costly life insurance to cover inheritance tax that is payable by the surviving partner? Can my noble friend also tell the House whether gay couples are likely to be granted the same rights as married couples to designate next of kin and make decisions on the medical treatment of an incapacitated partner?

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