Economy: Growth

Lord Bilimoria Excerpts

Thursday 6th December 2012 Lords Chamber

[Lord Bilimoria]

My Lords, the noble Lord, Lord Heseltine, has always been known as a man of action. From the day of his long-awaited maiden speech—after more than 10 years’ patience on behalf of your Lordships, to be precise, and when I had the privilege of paying the tributes to him—he has hit the ground running. Within barely seven months, he has produced his No Stone Unturned—In Pursuit of Growth report. The Economist teasingly referred to it as “Tarzanomics”.

To his credit, the noble Lord is absolutely right to conclude that:

“There are no easy or short term ways to beat the world’s most competitive economies”.

The suggestion to create a huge pool of money, endorsed by the Autumn Statement yesterday, to be devolved locally is, in theory, very good. The promotion of public-private partnerships is excellent. I am proud to be the founding chairman of the UK-India Business Council, which is funded by UK Trade & Investment and the private sector. I know that the strength of the UKIBC is that, as a public sector organisation alone it would not be effective, and as a private sector organisation alone it would not be effective. It is effective only because of the collective efforts of the public and private sectors—from British and Indian business to UKTI and Foreign and Commonwealth Office teams in the UK and across India.

My worry is that, in spite of what the noble Lord, Lord Haskel, has said, the RDAs created by the previous Government were not considered to be that effective. The Learning and Skills Council, which was created at great expense, was disbanded. These were great ideas in theory but difficult to implement in practice. They simply resulted in the creation of another layer of bureaucracy and another opportunity to waste money.

In building a business from scratch, I have seen that ideas are one thing but execution is what makes it happen. Will the Government confirm whether LEPs are local enterprise partnerships or, as the report refers to them, local economic partnerships? I hope it means both.

I was very worried about the report’s approach to foreign investment. Just look at what Tata has done since 2006. It has invested more than £10 billion and has performed a miracle in turning around Jaguar Land Rover, which now has made a profit of more than £1.5 billion. This is in spite of the previous Government turning it down for the funding that it so desperately needed in the depths of the recession. I hope that the Government will not take up the insinuations in the report. We have always been one of the most open economies in the world and we need constantly and desperately to attract foreign investment.

In the report, I was delighted to see the Government being asked to deal with illegal immigration, which they have failed to do so far. UKBA has been absolutely failing. However, will the Government also rethink their immigration policy, which is damaging British business and higher education?

In conclusion, I congratulate the noble Lord, Lord Heseltine, on his report but will it really get this Government creating institutions that are as effective as the American Small Business Administration, to which the noble Lord referred? It has been instrumental in supporting small businesses, not just with advice but by providing finance to the tune of billions of dollars a year in a sustained manner for decades. Will it be as effective as the German chambers of commerce, to which every business in Germany belongs? If not, I fear that this report will be another well intentioned, half-way step when what we as a nation desperately need is a giant step forward.