Economic Prosperity and Employment

Debate between Lord Ahmad of Wimbledon and Lord Kirkwood of Kirkhope

Thursday 18th July 2013 Lords Chamber

[Lord Kirkwood of Kirkhope]

My Lords, it is a pleasure to follow the noble Lord, Lord Mitchell, in his interesting and powerful speech, with which I entirely agreed. This is an important and timely debate. The thing that I am picking up from the debate—I hope that the Government are picking it up —is that things are really seriously changing, not just economically but technologically, in a way that is often hard to grasp. Governments need to make plans on the basis of a much longer-term perspective to try to accommodate some of these changes. We have heard that from the noble Lord, Lord Monks, with whom I agreed, the noble Lord, Lord Skidelsky, with whom I agreed as well, and the noble Lord, Lord Giddens. All of them made important analytical speeches and all were looking forward and trying to understand the significance of the extent of the change that we have seen. I certainly think that investment banks and digital revolutions are part of that consideration and analysis.

The role of Government is twofold. First, we need to start thinking about managing expectations better in terms of what the future is realistically likely to hold. As part of that discussion, we need to consider how sustainable growth will look and can be provided in the middle to longer-term future. I have real fears that the rather loose assumption that we are going back to the trend levels of growth that we have known in the past is likely to be wrong. The Government need to be brave enough, if they believe that the analysis justifies it, to start discussing these issues in a grown-up way with the public and shaping people’s expectations about wages, growth and living standards over the middle to longer term. That is a very important role for the Government at the moment because of the exponential levels of change that we may be witnessing.

Secondly, the Government need to plan a little more coherently and systematically what the future policy framework is. We had some powerful speeches from colleagues earlier about the need for continuity. Two or three colleagues mentioned the importance to SMEs of continuity. I agree with that. As a foot soldier in the modern coalition Government, I struggle sometimes to understand what the growth policy is. I understand what the austerity policy is because that hits me in the face every time I turn a political corner, but I struggle to understand exactly where the five to 10 year programme is heading. I am a little surprised that the important work of the noble Lord, Lord Heseltine, No Stone Unturned, has not been referred to more often today. I wonder whether the Government are founding their thinking on that. Many of the recommendations of the noble Lord, Lord Heseltine, are correct and should be pursued.

How are all of these major programmes—whether it is No Stone Unturned, the European structural funds, apprenticeships schemes or the Work Programme—melded into a vision that the coalition Government can put forward with confidence at the next election in answer to the middle and long-term challenges? That vision is absent at the moment. It is going to be quite difficult because the election is looming and that makes it harder for any sensible policy-making to be worked through and promoted.

The other thing is that in the spin and the stunts that are used to announce important policies—we had an announcement this week about the pupil premium—the policy gets lost in a lot of noise. The Government should really be much clearer in what they are saying. They need more focus, they need more persistence, and they need to concentrate more on delivery than on making public announcements. They need to separate the signal from the noise. I looked at the Financial Sustainability Report, which was published yesterday. Its long-term views about demographic assumptions, climate change costs and a decline in North Sea oil revenues compound my fear that there are some real problems that we are not yet properly addressing.

Finally, I turn to some issues which are second order but are very important to me. They come into the category of inequality to which the noble Lord, Lord Skidelsky, rightly referred. The Government need seriously to address long-term and youth unemployment. Incidentally, if people are trying to address the housing benefit budget in a meaningful way, we need to have some plans for development of social sector housing units over the next five to 10 years. There is a huge agenda that the Government need to be addressing in the middle to longer term. If we do not do that, in the near future we shall find ourselves during an election with only half a story to tell. That would not be in our interests as a coalition Government and it would not be in the long-term interests of the country.

[Lord Ahmad of Wimbledon]

Before we continue, I remind noble Lords that this is a time-limited debate. When the clock strikes five, noble Lords should be looking to make their concluding remarks.