Queen’s Speech

Earl of Caithness Excerpts

Monday 26th June 2017 Lords Chamber

[The Earl of Caithness (Con)]

My Lords, I thoroughly enjoyed the speech of the noble Lord, Lord Mountevans. When I took my seat many years ago, a number of noble Lords said, “I knew your father”. I did not know the noble Lord’s father, but I knew his brother. He was also very interested in transport. I remember when I was Minister for Transport, we looked at the west mainline improvements together, as railways were his big thing in life rather than the noble Lord’s naval and shipping interests. I was glad that I was Minister responsible for shipping on two occasions and I hope that I helped a little towards keeping the City where it should be.

Whether we separate completely from the EU, as the voters wanted in the referendum just over a year ago, or whether we are an appendage on the edge of Europe paying a large sum of money to be part of a trading bloc but not having our feet under the table determining the policies, is irrelevant. What matters is the economy—James Carville coined the phrase when he was working for President Clinton, “It’s the economy, stupid”. So whether we are in or we are out, what really matters is the economy.

There has been a shift in the UK, as all parties now want more state intervention. The noble Baroness, Lady Jones, said “Spend spend” in her speech, completely forgetting of course that it was only seven years ago that the Chief Secretary from her party left government with a note in the drawer saying that there was no money left. The noble Lord, Lord Fox, talked about “Spend, spend” and even my noble friend Lord Callanan in introducing this debate talked about spending. But we need to be wary if Governments spend, spend, spend, because the national debt is still very large by recent historic standards and, relative to the size of the economy, it has grown.

Moreover, there are now more complicated issues to take into account for that. We have an ageing population, increased health spending, pensions and long-term care. We are incredibly lucky in this country, but at some point we have to sit down, like any good housewife running the household budget, and say, “Enough is enough. We have got to stop spending and set priorities”. Does healthcare always have to be free at the point of use? If that is what is agreed, something else will have to be cut; otherwise, this country will go completely bankrupt.

Who pays the taxes for the Government to spend? A quarter of the tax that the Government raise comes from income tax, but only 50% of us pay it. That is good in one sense but not so good in another. It is quite right that the low paid are taken out of tax, and this Government have done more than any other to accelerate that, but it puts an extra burden on those who are paying tax. During the campaign, Mr McDonnell said that he wanted to squeeze the rich because the poor were overtaxed. He has only to look at some of the statistics to realise that it is actually the rich who have seen their tax burden increase hugely over the past 20 years in comparison with the poor. Therein also lies a problem, because the rich are not necessarily on fixed salaries, and they move. If Mr McDonnell wants to squeeze the rich, as Mr Healey did, entrepreneurs and those who pay taxes will leave this country. That will do us no good whatsoever.

When we look at the UK workforce, it is important to realise that fewer than one in 10 people are working in manufacturing and even fewer in construction. The biggest growth in employment over the past 20 years has been in public administration, education and health. That all has to be paid for by other people earning money and contributing to the economy.

There is an unfairness in the tax system. We in this country pride ourselves on being fair, but there is a gross unfairness. If you take someone earning £40,000 as an employee, he will pay around £12,000 in tax. If he is self-employed, he will pay around £9,000 in tax. If he is an owner-manager, he will pay around £7,500 in tax. That is inequitable. Are the Government looking at this issue? I know that the Matthew Taylor report is yet to come. When is that to be published, because this area does need to be addressed? The Government are losing what is potentially quite a large sum of money. Will the Government also look at national insurance contributions again? What are they going to do about the loss of revenue that I have mentioned?

I conclude by turning to a subject that is closer to my heart, which is agriculture and fisheries. I am delighted with the Bills which have been proposed. At the moment, farmers are in an extremely difficult situation. They know the market within the common agricultural policy, but they have no idea what is going to happen in the future. When does my noble friend expect the Government to publish their 25-year plan for farming? A stock farmer is now putting cows into pregnancy to produce calves that will be fattened up for beef to be sold in a market that he has no idea of what it is going to be. We do not know whether we are going to be in or out of the EU or what rules will apply. Farmers are potentially at huge risk. There is a high chance of either an oversupply or a shortage of food. I hope that the two Bills which are to come before us on fisheries and agriculture will go some way to reassuring these people because they are absolutely key to maintaining the countryside as the nice environment we all want. We look forward to receiving them in this House soon.