Queen’s Speech

Baroness Hanham Excerpts

Monday 13th May 2013 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, I am probably the only person in the Chamber who sat and listened to every single one of the speeches made today. It is with some lack of confidence that I say I will be able to respond to all the points that were made. I will do my best. It may require me gabbling a bit but I will provide as many responses as I can. This has been an important and good debate. I always enjoy the Queen’s Speech debate because it is very wide-ranging—I apologise to the noble Lord, Lord Patten—and we get a whole lot of views.

In his opening speech—many, many hours ago—my noble friend Lord Deighton laid out the Government’s programme for the next Session. Since then, we have had more than 40 commendable speeches, to which I will endeavour to do justice in the short time available to me. Where I have been asked direct questions, if I do not answer them I will see that a letter is sent to the noble Lord concerned.

I, too, congratulate our new noble friend, the noble Baroness, Lady Lane-Fox. Many others have complimented her on her speech, very justifiably, and I, too, would like to say how fortunate this House is to have her in our midst. She will not know this but I knew the previous Baroness Lane-Fox very well and respected her very much as a great supporter of the disabled. She was one of the first people to really put the needs of disabled people on the map, of course being disabled herself. She was a great person and I am sure that the noble Baroness will follow adequately in her shoes.

The comments started off with a sort of mish-mash of disagreement about what has happened with the economy. I found rather rich the suggestion that the Government were not doing the right thing to put it right. On a number of occasions in this House, I have gently reminded noble Lords on the other side that this deficit was not of our making. We inherited it after 13 years and now to suggest that we should borrow our way out of this situation, when we were borrowed into it, is something that will require more time for debate than I have today.

Despite the considerable efforts that have been and are being made by the Government, the country is still facing difficult economic challenges. The departments represented in today’s debate—my department, the Department for Communities and Local Government; BIS; the Department for Transport; and the Treasury—are the most involved in providing the essential measures that can assist recovery and stimulate growth.

The Government have been consistent in basing their policy on an unwavering commitment to fiscal responsibility and introducing measures aimed at ensuring that this country is one of the best places in the world to do business.

We have had many speeches on the economy, on both its strengths and its weaknesses. The Government’s key objective is to reduce the deficit, and spending consolidation is a vital part of this. Interesting speeches on this were made by the noble Lords, Lord Eatwell and Lord Empey, and the noble Baroness, Lady Wheatcroft. The Government have consistently looked to prioritise growth and enhance spending. The Chancellor announced in the Budget that the Government would increase their infrastructure spending plans by £3 billion per annum, paid for through permanent reductions in current spending. This will mean £18 billion additional investment by the end of the next Parliament.

The noble Lord, Lord Empey, suggested that individual departments and civil servants should have a duty to make savings and to understand what they were doing—I think that that is more or less what I would interpret it as. We are currently engaged with departments to identify more savings from their budgets ahead of the spending review on 26 June. There will be a zero-based review of capital to identify the highest-value-for-money growth schemes. As noble Lords have said and understand, capital growth is essential to support the growth strategy.

Public investment as a share of national income, thus GDP, will be higher on average between 2010-11 and 2020-21 than under the whole period of the previous Government despite much greater constraints on the public finances. This means that the Government will never cut capital spending to the levels planned by the previous Government, who intended to cut it by 7% more than in our plans. This would have meant £3.4 billion less investment by 2014-15.

We have made good progress on coalition agreement commitments and business plan delivery. Our focus now is on maximising the impact of our policies, particularly to achieve growth at a local and national level. That means devolving powers and responsibilities and giving business as much freedom and support as possible so that it can flourish. As my noble friend Lord Tope has pointed out, my department has been instrumental in passing funding and responsibilities to local government to help to promote business activity.

A final part of this localisation is covered by the measures announced in the gracious Speech of the local audit Bill. I shall not go into the details tonight because it looks as though we are going to have a lively time with it, but I know that we will be starting consideration of that in the next few weeks. The legislation will enable local authorities to be more independent of central government in selecting their auditors and managing their finances.

We have had a number of contributions today on transport and transport infrastructure. It is correct that we are investing more on major transport projects such as HS2 and Crossrail. Despite the strictures of my noble friend Lord Forsyth, we are investing also in local roads, rail and transport schemes. I am pleased that, in general, speeches today have supported that investment.

I was asked specific questions by the noble Lords, Lord Faulkner and Lord Bradshaw, and the noble Viscount, Lord Simon. They were all kind enough to give me advance warning of these, so I shall briefly respond to them now. The noble Lord, Lord Faulkner, asked about Crossrail having a station at Reading or Maidenhead. I know that he has recently had a written response from my noble friend Lord Attlee and that my noble friend is happy to speak to him again on this subject if he wishes. Network Rail’s Crossrail works on the Great Western main line are already under way in a number of places. However, the works at Maidenhead that might not be needed if the route was extended to Reading are not due to commence until 2016, so there is plenty of time to deal with that.

The noble Lord, Lord Bradshaw, asked about the acute shortage of railway rolling stock and whether Her Majesty’s Government would get out of the way of investment by indicating in franchise agreements a presumption of the carry-over of such stock.

The Government’s rail Command Paper stated that bidders should not be fettered in their future use of rolling stock and should have more market freedom. That was endorsed by the industry’s rolling stock strategy, published in February 2013. The Government already make use, where appropriate, of Section 54 of the Railways Act, under which we can require a new operator to take on the previous operator’s rolling stock.

Finally, the noble Viscount, Lord Simon, was concerned about young drivers’ road safety. We are intent on reducing the number of accidents involving young drivers. That is a top priority and we have already taken steps to make the driving test more realistic by introducing independent driving and stopping the publication of test routes. A Green Paper considering a range of options for improving the safety of newly qualified drivers will be published later in the spring.

My noble friend Lord Forsyth asked about the modernisation of transport, to which I have just referred. We are undertaking the biggest modernisation programme for the railways since the Victorian era. We are working with local authorities and businesses to target investment where it is most needed, and we have established the independent Airports Commission to make recommendations on how to safeguard future international aviation capacity. The noble Lord, Lord Bilimoria, asked about that. Sir Howard Davies will be delivering a shortlist of credible proposals by the end of this year. He will also identify ways in which we can make better use of existing capacity and, as part of his final report in summer 2015, the commission will provide materials to support the Government in preparing a national policy statement.

We have of course made a commitment to HS2, which I am glad was largely supported by speakers from around the House. We believe that that will change the economic geography of the nation. The noble Lord, Lord Bilimoria, also asked us about timescales. I can tell him that we aim to produce a paving Bill this year. The target for Royal Assent to the paving Bill is November this year. The hybrid Bill for phase 1 will be introduced by the end of 2013, with 2015 the target for Royal Assent. We expect that the hybrid Bill for phase 2 will be introduced in 2018. Construction of phase 1 will start in 2017 and construction of phase 2 will start in the mid-2020s. We hope to have the first line open in 2026.

The general support for HS2 is a great help. The noble Lord, Lord Faulkner, gave stirring support for it. I agree with him that it is not just about high speed. It will unlock the enormous potential opportunities that cities including Birmingham, Manchester and Leeds have to offer, making them more attractive places to locate and do business. HS2 will bring jobs on the railway to the cities that it will serve. HS2 Ltd estimates that about 9,000 jobs will be created to construct the new London-Birmingham route, with a further 1,500 permanent jobs created in operations and maintenance. All in all, it is something to look forward to and support. However, we have not just been working on HS2. We have also been investing in other railway and road structures in an ongoing programme to ensure that it is not just new lines that are supported but current ones.

We know that at least 90% of businesses are small and medium-sized enterprises and that they have not found it easy to access finance in the past few years, so we have created a business bank, which will deploy £1 billion of additional capital to address gaps in the supply of finance to small and medium-sized enterprises. That will enable them to access loans and give them certainty to bid for contracts both within this country and beyond. We are providing further help by reducing corporation tax from 28% to 20% by April 2015. In addition, we will be providing a £2,000 contribution towards employers’ national insurance contributions if they take on extra staff and so help the unemployment situation, which my noble friend Lord Sheikh welcomed.

My own department has been at the forefront of promoting infrastructure support, which, as other noble Lords have said, is important to the future of the economy. Creating the right conditions for increasing infrastructure projects is essential to stimulate growth, particularly through the construction industry, so we are building on an existing commitment to an £11 billion housing investment in this spending review. In this year’s Budget, a further housing package totalling £5.4 billion was announced. The noble Lord, Lord Eatwell, suggested that there should be more concentration on new housing. I remind him that we have recently launched an equity loan scheme for help to buy, and that will provide £3.5 billion of investment, focusing on new-build home ownership. It will also boost construction. That has been well received and well taken up.

We have introduced a mortgage guarantee scheme from January 2014 to provide guarantees to support £130 billion of high loan-to-value mortgages. We are undertaking a build-to-rent scheme, the funding for which has expanded from £200 million to £1 billion, to support the development of more new homes. The affordable homes guarantee programme doubled the support for a further 15,000 new affordable homes in England by 2015, and we have the right to buy.

The noble Lord, Lord Shipley, and I disagree that none of this will generate more housing and boost construction. It will, and that is what we are aiming for. However, it involves a huge investment of money in both housing and construction.

The Government published our full response to the Heseltine review in March 2013, confirming that 81 out of 89 recommendations had been accepted in full or in part, including the creation of a single local growth fund. The size of the pot has not yet been agreed but it will encompass quite a lot of other pots.

The Government have also established 24 enterprise zones, and those are creating jobs as we speak. The right reverend Prelate the Bishop of Birmingham rightly pointed out how Birmingham was doing, particularly with the city deals. Birmingham clearly has a good future and is working extremely hard to ensure that it is at the top of the tree and ready to take on any responsibilities to come its way. It is estimated that the first wave of city deals will create 175,000 jobs over the next 20 years and 37,000 new apprenticeships.

In addition to the Autumn Statement, 2012 saw the announcement of government investment of an additional £980 million in schools in England by the end of the Parliament, the funding for 100 new academies and free schools. All these promote growth and investment.

The noble Lord, Lord Bilimoria, made a passionate plea for more pressure on trade, including selling the UK in the UK. The Government are encouraging investment in exports as a route to a more balanced economy, and we have set out our ambitions to increase total annual UK exports from £488 billion in 2011 to £1 trillion by 2020.

My noble friend Lord Sheikh and the noble Lord, Lord Bilimoria, promoted the need to pursue trade with Africa as well as with India and China. We understand the need to extend that, and I know that my noble friend Lord Deighton will be taking notice of that.

[Lord Lea of Crondall]

The Minister has mentioned Africa and China. Does she recall that a number of noble Lords have mentioned Europe? Does she think that it makes no difference to the prospects for investment in Britain if we have one hand on the door handle to exit from the European Union?

[Baroness Hanham]

I was not ignoring Europe. I was speaking directly to the points that were made about India and Africa. Of course our trade with Europe is extremely important, both imports and exports. I do not think anybody is going to want to unbalance that. The noble Lord’s point is well made and I was not trying to underestimate its importance. Trade with the rest of the world is also extremely important.

In January 2013, the Government introduced a one-in, two-out system of deregulation whereby no new regulation is introduced unless it is offset by deregulation of twice the equivalent value. That will be part of the discussions we will be having later when the deregulation Bill comes forward.

I have a sheaf of papers here and about two minutes to deal with them. The noble Lord, Lord Eatwell, spoke about the banking reform Bill. The Government are going to give careful consideration to the recommendations made by the Parliamentary Commission on Banking Standards, including those it makes in its final report. We will consider tabling amendments to the Bill when and if appropriate. The Government have committed to ensure that both Houses will have enough opportunity to consider and debate any amendments tabled.

The noble Lord, Lord Bilimoria, asked about promoting trade beyond Europe. UKTI is working with the Foreign Office and applying a range of criteria to prioritise its focus on emerging and high-growth markets.

The noble Lord, Lord McFall, and the noble Baroness, Lady Kramer, asked about the break-up and sale of RBS and other banks. The government shareholdings in RBS and Lloyds Banking Group are managed on a commercial and arm’s-length basis. UKFI works closely with those banks to assure itself of their approach to strategy. Its objectives are to create value for money for the taxpayer and to devise and execute a strategy for realising it in an orderly and active way over time.

My noble friend Lord Forsyth suggested that quantitative easing has exaggerated the liabilities of pension funds because of low interest rates. We recognise that quantitative easing is a major tool designed to affect the economy as a whole to meet the 2% inflation target over the medium term. Over 2011-12, companies with defined pension schemes have seen their scheme deficits more than double from around £100 billion to £250 billion, but the recent fall in gilt yields cannot be ascribed to quantitative easing alone. Factors such as flight to safety from the eurozone also have an impact.

[Lord Forsyth of Drumlean]

I realise it is rather late, but the point that I was making was that the assessed deficit is based on gilt yields, not corporate bond yields. If the Pensions Regulator were to change that view, huge sums of money that are not required but appear to be required because of the fall in gilt yields would not be put into pension funds.

[Baroness Hanham]

I thank my noble friend for that extra explanation. I shall carry straight on because I might just get a few more of these done.

The noble Baroness, Lady Hayter, asked whether private landlords will be required to check the immigration status of tenants. Many landlords already carry out some identity checks. An additional requirement, such as taking a copy of a passport, should not be too burdensome.

My noble friend Lord Tugendhat asked a number of questions, as did the noble Lord, Lord Monks. They are all quite technical, so I hope they will forgive me if I reply in writing.

There were questions about the consumer Bill that will come before us in the not-too-distant future, and there will be a great deal of debate and discussion on it.

My noble friend Lady Byford raised the question of rural broadband. I am sure she will appreciate that, during the passage of the Growth and Infrastructure Bill a few months ago, there was considerable discussion of rural broadband and the necessity for it including the permitted development rights and the limitation of those. The Government absolutely recognise that rural broadband is essential, not only to promote industry and its facilities but also for individuals.

My noble friend also asked whether local authorities have sufficient resources for planning, based on the new permission for agricultural buildings to be converted. We are giving all authorities a 15% inflation-linked increase in fees. Some have managed to deliver significant improvements in their services despite other reductions.

The noble Lord, Lord Mawson, speaks with great experience and he and I have discussed issues like this before. I note with concern what he was saying about neighbourhood budgets and communities. Perhaps we might discuss that further some other time.

I will probably run out of your Lordships’ patience as time goes on. I will deal with two more points and then answer the others in writing.

The noble Lord, Lord Warner, spoke about youth unemployment as well as other important matters. The 16-17 year-old unemployment level fell by 5,000 to 192,000, down 21,000 from the same time last year. The 18-24 year-old level rose by 25,000, but that is down 25,000 from the same time last year. The proportion of 16-24 year-olds not in employment, education or training has fallen over the year and is currently at 15%. That is too high and needs to come down. I accept entirely what noble Lords say: youth employment is one of the real problems that we need to address. The noble Lord also asked about the resource transfer from the National Health Service to social care. As he will know, all government spending is being reviewed as part of the spending review, including social care funding.

Finally, my noble friend Lord Trenchard asked what we are doing about excessive regulations where primary legislation is not required. The deregulation Bill is not all we are doing to reduce regulation. We are also making changes through secondary legislation, but this Bill will help us meet our target to repeal and reform at least 3,000 regulations in this Parliament.

I must just respond to my noble friend Lord Tope on city deals because he was so nice about me. At the moment there is no plan for rural deals. Of course, some rural areas are caught up within the city deals and are helped by that. The Government plan to devolve to all local enterprise partnerships, rural and urban, the single local growth fund.

I apologise for gabbling and being rather short. Where I have not answered, correctly and in appropriate detail, points that have been made, I will do so in writing.

The debate adjourned until Tuesday 14 May.