Queen’s Speech

Lord Bilimoria Excerpts

Thursday 17th October 2019 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, just today, the Chancellor, Sajid Javid, wrote:

“A decade after the financial crisis, the warning lights are once again flashing on the global economy. Some of the causes of this are international—mounting trade wars are raising costs and undermining certainty”.


Just this month, the IFS published its green budget. A Library briefing refers to it, stating very clearly that,

“the global economic outlook has deteriorated due to developments in the Chinese economy and the ‘trade wars’ initiated by Donald Trump … The outlook for UK growth is likewise weaker, partly due to global trends but more importantly due to uncertainty surrounding Brexit. This uncertainty has been ‘especially damaging to business investment’ … ‘Whether—and if so how and when—the UK leaves the European Union will be perhaps the key determinant of growth over the next few years’”.

Today, just as this debate started, we heard about the major step that a deal has supposedly been agreed. Will it get through the House of Commons?

The briefing also says:

“The form of Brexit will also affect the path of government borrowing and debt … the IFS suggested that even a ‘smooth Brexit’ will lead to borrowing which exceeds the ‘fiscal rule’ of 2% of GDP. Under a no-deal scenario, even one it describes as ‘relatively orderly’, the IFS said that government debt would climb to almost 90% of national income for the first time since the 1960s”.


That is what is scary.

I was recently appointed vice-chairman of the CBI, which—along with business in general—was very pleased with the spending review announced by the Government in September. The CBI states:

“Business welcomed the focus on education and skills funding”.


However, overshadowing everything is Brexit. The CBI speaks for 190,000 businesses and states:

“The impact of no deal on business, the economy and UK prosperity will be enormous and must be avoided”,


at all costs. It goes on:

“Businesses can prepare for no deal but cannot be protected by the impacts they can’t anticipate or prepare for”.


The unknowns are unknown and I personally, from my business point of view, am terrified of the unknowns that a no-deal Brexit might bring. Business does not want no deal, Parliament does not want no deal and the country does not want a no-deal Brexit.

As for red tape, the CBI states:

“18 out of 23 sectors analysed in the CBI’s Smooth Operations report identified ongoing regulatory alignment with EU rules as critical to the UK’s future relationship with the EU”.


Fifty per cent of our trade is with the EU so, if we want to carry on doing business with it, we must have regulatory alignment. When she started the debate, the noble Baroness, Lady Vere, spoke about wanting a strong, secure and prosperous nation. We are totally behind her in that.

On taxation, the Library briefing states:

“The Government has previously announced that the main rate of corporation tax will reduce from 19% to 17% on 1 April 2020”.


In his concluding speech, can the Minister confirm that that will still happen because, as the briefing states, the former Chancellor,

“George Osborne, argued that corporation tax is ‘one of the most distortive and unproductive taxes’. He said that the cut would benefit over one million businesses”?

I presume that the current Government continue to agree with that. Leaving the European Union is no excuse for lowering taxes. We can do that anyway; we do not have to leave the European Union to do so. Ireland’s rate of corporation tax is 12%, which is far more competitive than ours.

In her excellent speech in yesterday’s debate on the gracious Speech, the noble Baroness, Lady Quin, made the point that,

“we export twice as much to Belgium as we do to India”.—[Official Report, 16/10/19; col. 128.]

As founding chairman of the UK India Business Council, I can say openly that, under the previous Prime Minister, our relationship with India was at its lowest. Now is an opportunity to rebuild that relationship, built by Tony Blair, Gordon Brown and David Cameron. Now, with Boris Johnson, I am sure that we will continue to rebuild it. I hope we will send a major delegation to India soon to make that point.

In total, the Commonwealth today, with over 50 countries, including India, makes up less than 10% of our trade, compared to 50% with the EU. We keep talking about doing a free trade deal with the US so quickly. It has just been announced that our whisky exported to the US will be taxed at 25%—before we even start any negotiations. The US representative said very clearly that even in negotiations on a free trade deal or trade agreement it will apply. They will make no exceptions. These trade agreements are really difficult.

The Government intend to roll over existing trade agreements we have through the EU, making up almost 17% of our trade on top of the 50% we have with the EU itself. Could the Government tell us how many of these will be automatically rolled over during the implementation period, let alone in future?

My noble friend Lord St John spoke eloquently about the environment and how technology is so important in meeting that 2050 net zero target. At the University of Birmingham, of which I am proud to be chancellor, we have now developed a model hydrogen train. It is that sort of technology that we need to be working on. It is great news that this country is ahead of the game. We have for the first time, in the last few months, used more energy in this country from renewable and non-conventional sources. That is fantastic; long may it continue. Coal, which used to be our main power-consuming source, is now at less than 5%. We are a model to the rest of the world.

When it comes to dealing with India, I congratulate the Government on bringing back the two-year post-graduation work visa for international students. Bravo! We have been fighting for that. I helped introduce it here in 2007-08. It was taken away by Theresa May in 2012. Seven years it has taken us, but we have got it back. The interest in India is already up by 50% in many universities, which is fantastic. The Government need to do more. Will they continue with the industrial strategy target of R&D at 2.4% of GDP? We have to do that: Germany is at 2.8%; the USA is at 2.8%; Israel is at 4%. Let us do it. Can the Government commit to that?

The Minister spoke about security. I have been banging on about the 20,000 more police officers; I thank the Government for bringing it back in. Sad statistics have just come out today that violent crime has continued to increase, so that is wonderful news.

Fishing was in the gracious Speech. The reality is that the EU wants access to our waters, and we will probably have to grant that because 75% of our fish is exported, the majority to the European Union. These are the realities.

I would go so far as to say that, if this deal goes through, we will go into a long implementation period. It may go on until 2020, for two more years or, as my noble friend Lord Macpherson said, for a decade. My noble friend Lord Kerr said that we have put the cart before the horse. This withdrawal agreement covers just three things: the rights of citizens—UK and EU—£39 billion and the Northern Ireland situation. The real work is still to come. The political declaration has all the agreements on space, security and movement of people that we have to negotiate in the years to come. Our priorities have to be preserving our union, our relationship with the EU and our global relationship with the US, China, Japan, India and the rest of the world. By the way, there was no mention of entrepreneurship in the gracious Speech. We must continue to be a champion of entrepreneurship; this country is wonderful at it.

I conclude with the Chancellor, Sajid Javid, who said in his article today:

“Britain is—and will always be—an open economy”.


We are a leading member of the G7 and the G20, a permanent member of the UN Security Council and a leading power in NATO. If we continue to have close alignment with the EU, wow, this country has a huge future.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)]

My Lords, it is a great pleasure and privilege to conclude today’s debate on Her Majesty’s gracious Speech. First, I declare my farming interests, as set out in the register. I am most grateful to my noble friend Lady Vere for opening the debate so comprehensively and with panache. I thank all noble Lords who have taken part in this diverse debate on critical issues. I agree with the noble Baroness, Lady Randerson, and the noble Lord, Lord Stevenson of Balmacara, that we have discussed some of the most critical issues, not only for this country but across the world. So many important points have been raised today. The generous noble Lord, Lord Stevenson, has already raised this. I fear I will not be in a position to respond to every question put by every noble Lord. I do promise that there will be a substantial letter with a detailed response. Your Lordships should be prepared for many pages. I want to ensure that points are covered fully either with my reply or with the letter.

From the outset I acknowledge and congratulate the right reverend Prelate the Bishop of Bristol and the noble Baroness, Lady Bennett, on their maiden speeches. They raised issues of profound importance and I look forward to their future contributions. I think it is fair to say that discussions on all the matters the noble Baronesses raise will be lively.

On economic affairs, I was interested in what my noble friend Lord Leigh of Hurley said in comparison with what the noble Baroness, Lady Jones of Whitchurch, opened with. Our view is that the fundamentals of the UK economy are strong. The measures in the Queen’s Speech are built on economic progress over the last decade, a period during which our economy has grown by almost one-fifth and 3.6 million more people are in work. I am very glad that my noble friend Lady Redfern referred to the rural economy, where so many small and medium enterprises are established.

Wage growth has outstripped inflation for over a year and unemployment is down by 1.2 million since 2010. Youth unemployment has fallen by 47% and borrowing has been cut by over four-fifths as a share of GDP since 2010. I acknowledge, and in acknowledging I look at noble Lords on the Liberal Democrat Benches, that success would not have been possible if we had not taken difficult decisions from 2010. I believe it was in the national interest and responsibility that the public finances were restored. The noble Lord, Lord Macpherson of Earl’s Court, was probably very much in the front line of some of those thoughts.

I picked up the words on austerity from a number of noble Lords. I think of the noble Lord, Lord Darling, then Chancellor, recognising that there had to be a retrenchment. When we cut through all this, the piece of legislation the Labour Government passed in 2010 was a recognition that matters had to be taken in hand. I am particularly mindful of what the noble Lord, Lord Livermore, said about fiscal caution.

I also think we are right to begin a new decade of investment and renewal. My noble friend Lady Neville-Rolfe set that out strongly. When I look at noble Lords on the Labour Benches, I do not dream for one minute that this is associated with them, but I and the Government would say that the current views of the present Labour leadership do not seem to chime with enterprise, private ownership or, indeed, success. I am mindful of what the noble Lord, Lord Bilimoria, said on these matters. It is, after all, that economic engine that will always do all the things that noble Lords across the House have sought today.

I am grateful to the noble Lord, Lord Stevenson, for raising the tips Bill. I am afraid I do not have the answer on Northern Ireland yet, but that will be part of my letter.

On the issue that the noble Lord, Lord Fox, raised about fiscal rules, the 2019 spending round continues to meet existing fiscal targets. The Government will review the rules alongside updated forecasts at the Budget.

On the question about regulation from the noble Baroness, Lady Kramer, financial services will not see diluted regulation. We remain committed to world-leading regulation standards. Furthermore, the UK remains committed to equivalence with the EU in any scenario. But as my noble friend Lord Leigh said, it is essential that our regulation is reformed and responds to changes in the market to make sure that there is an appropriate balance—I emphasise “appropriate”—between investor freedoms and protections. Indeed, I understand that my noble friend is due to meet the Economic Secretary to the Treasury shortly, and I am sure some of those points will be outlined.

The noble Baroness, Lady Kramer, mentioned that there was nothing in the financial services Bill on fintech. The Government already launched the fintech sector strategy in March 2018 to show how the UK could remain the best place in the world for fintech. All announcements in that strategy have already been delivered. The UK has been independently ranked as the best place in the world to start a fintech business.

I am not sure the noble Lord, Lord Bilimoria, was in his place at the time, but he and the noble Lord, Lord Haskel, take contrary views on corporation tax cuts. The rate of corporation tax has been cut from 28% in 2010 to 19% now—the lowest in the G20—benefiting businesses large and small, we believe. I am afraid these are the words I must say: as normal, the Chancellor will set out the rates for all major taxes at the Budget, now due in November.

A number of your Lordships—particularly the noble Baronesses, Lady Jones of Whitchurch, Lady Parminter and Lady Mallalieu, and my noble friend Lady Browning —asked about standards and future trade agreements. Any future trade agreements must work for consumers, farmers, businesses and the UK. We will not water down our standards on food safety, animal welfare or environmental protection as part of any future deals. Yes, we want to negotiate an ambitious and comprehensive free trade deal with the United States, but any new products wishing to enter the UK market must comply with our high standards on animal welfare and food safety, for instance. We will not—I underline not—compromise on these standards. Indeed, WTO rules allow WTO members to adopt and maintain trade-restrictive measures on specified public policy grounds.

The noble Lords, Lord Fox and Lord Stevenson, asked about the trade Bill. Again, final decisions are still to be taken, but I have these words: we welcome your Lordships’ work and it will certainly be taken into account. Legislation will ensure that we deliver certainty to business, seek continuity of existing EU trade agreements and establish an independent trade remedies authority.

The noble Lord, Lord Haskel, mentioned productivity. Funding of the national productivity investment fund has increased from £23 billion to £37 billion. We are determined to tackle the, I think, serious issue that this great country does not have the strongest productivity figures, and I believe it should. We need to work on that.

I turn to business and energy. Climate change is one of the most urgent and pressing challenges we face, as raised by the noble Baroness, Lady Jones of Whitchurch. I say to your Lordships’ walking legend, my noble friend Lord Bates, that he is right—as we sometimes should be prepared to say—in speaking of our country’s strong record on these matters, even when we need to do much more. It is fair and right that this Government wish to deliver their ambition to be the greenest Government ever. We also need to ensure that economic and environmental success go hand in hand. That is surely the major challenge.

[Lord Bilimoria]

My Lords—

[Lord Gardiner of Kimble]

I have very little time; if I take this intervention, I cannot answer any questions.

[Lord Bilimoria]

I am sorry. I apologise. I need to make a correction to the House. In my speech, I said that energy from renewable sources over the last three months was more than from conventional, but that was only for electricity. Electricity makes up only 18% of our energy, so we still have a lot to do. This was pointed out by a professor at Cambridge University.

[Lord Gardiner of Kimble]

I will cover the Environment Bill in more detail, but it is important, in signifying the bona fides of the Government, that today the Prime Minister announced that he will chair a new Cabinet committee on climate change. This will drive further action across government to protect our environment, reduce emissions and improve air quality, and it shows the importance of climate change to this Government. We clearly need to do a great deal on this, although I am going to cut in here to applaud the tree speech of the noble Lord, Lord Stone. We need more detail on this area. The noble Baroness, Lady Young of Old Scone, raised National Tree Week—23 November to 1 December. I am going to plant some trees, and I am sure every noble Lord here will too.

I move on quickly to broadband. My noble friends Lady Byford and Lady Redfern, and the noble Lord, Lord Stevenson, raised this and the importance of digital connectivity everywhere. As the Rural Affairs Minister, I stress its importance in the countryside. The Chancellor has already announced that £5 billion will be spent on gigabit connectivity to underpin the outside-in approach. I am also pleased with our ambition on mobile for the majority of the population to have access to a 5G signal by 2027, with much more coming in to improve the situation in rural areas. I will write more fully on that.

The noble Baroness, Lady Jones of Whitchurch, and the noble Lord, Lord Whitty, mentioned our carbon budgets. We outperformed our first and second carbon budgets. We are on track to exceed the third. The latest projections suggest that we are on track to deliver over 90% of our required performance for the fourth and fifth carbon budgets, but that is before taking into account many of the measures and proposals of our green growth strategy.

The noble Lord, Lord Fox, raised a point about the industrial strategy. The industrial strategy is a cross-government programme focusing on strengthening the foundations of productivity, encouraging innovation, supporting UK businesses and fostering growth in all parts of the United Kingdom. I am again speaking as the Rural Affairs Minister; the shared rural prosperity fund means across the nation. I agree with the noble Lords, Lord Fox and Lord Bilimoria, that we need to invest more in science and research. The UK has an ambition to spend 2.4% of GDP on R&D by 2027 and 3% in the longer term. This autumn, the Government will set out plans to boost significantly public R&D funding, providing greater certainty for our great scientific community.

Nuclear was raised by the noble Viscount, Lord Hanworth, and the noble Lords, Lord Bilimoria and Lord Broers. We are working to deliver an ambitious energy White Paper that addresses the transformation of the energy system, consistent with delivering net zero emissions. The Government continue to believe that nuclear has an important role. Our commitment to it has been clearly demonstrated by giving the go-ahead for the first new nuclear power station in a generation at Hinkley Point. We have the largest installed offshore wind capacity in the world, and annual support for renewables will be over £10 billion by 2021. The noble Duke, the Duke of Somerset, referred to hydrogen. We are investing up to £108 million in hydrogen innovation.

My noble friend Lord Arran spoke of the Appledore shipyard and UK shipbuilding. He made a very powerful speech and I appreciate all that he said about the closure. I hope that there is a positive story on this matter. As has been said, the Prime Minister has appointed the Defence Secretary as the new shipbuilding tsar. He will be tasked with looking at how a longer-term skill base can be achieved, and this will ensure that British shipyards can compete fairly across all UK contracts. I am most grateful to my noble friend for raising that.

Transport is clearly the lifeblood of our economy. We wish to invest record sums in our railways and start the vital process of modernising our airspace. In response to the noble Lord, Lord Stevenson, the Oakervee review on HS2 is under way.

I would like to say very much more on ultra-low emission vehicles. The Road to Zero strategy sets out a clear pathway to zero emissions. We are working extremely hard and are investing £3.5 billion to reduce transport emissions, improve air quality and protect wildlife and habitats.

Having spoken to my noble friend Lady Vere, I know that she will be delighted to facilitate a meeting for my noble friend Lord Bates with Chris Heaton-Harris at the Department for Transport to discuss the issues raised. The noble Baroness, Lady Jones of Moulsecoomb, spoke about cycling and walking. Almost £2 billion is being invested through the cycling and walking investment strategy. My noble friend Lord Bates does not appear to need any of that sum.

The noble Baroness, Lady Randerson, spoke about buses and I want to talk in particular about electric buses. The Government recognise that electric buses play a hugely important part in decarbonisation and in bringing about improvements in air quality. Since 2015, the Government have provided £90 million of funding for electric buses, and on 30 September this year we announced £220 million for a bus package.

I do not want to be remiss on agriculture and the environment. A great deal is promised in the legislation, with a commitment to tackle climate change, biodiversity loss and environmental risks to public health. All our efforts are guided by our pledge to bequeath a better natural inheritance than was left to us, bound by our commitment to reach net zero emissions by 2050. The noble Lord, Lord St John of Bletso, is absolutely right: we aspire to be a global leader, and indeed, when I go around many countries, it is clear to me that on climate change we are deemed to be such.

There were many questions on the Environment Bill. The first was from my noble friend Lady Byford and the noble Baronesses, Lady Parminter and Lady Young of Old Scone. The OEP will be operationally independent from government. It will be governed by non-executive members appointed through a regulated public appointments process. Ministers will not be able to set its programme of activity or improperly influence its decisions. The office will come into effect from January 2021, subject to the passage of the Environment Bill. The new independent office will ensure that when we leave the EU, its environmental standards will be upheld and improved. On resources and funding, the Secretary of State is required under the Bill to provide sufficient funding to enable the office to perform its function. On the non-regressive clause to which the noble Baroness, Lady Young of Old Scone, referred, we have no intention of weakening our current environmental protections.

I am not going to forget the importance of my noble friends Lord Shrewsbury and Lord Caithness, their visit to Allerton and the important research and practical work that we need to do in working with land managers. My noble friend Lord Inglewood asked what we thought the countryside was for. It is for the production of clean air; clean and plentiful water; thriving plants and wildlife; protection from and mitigation of environmental hazards; beauty, heritage and engagement; mitigation of and adaptation to climate change and—as the noble Baroness, Lady Mallalieu, would want me to say—very good food.

I also want to outline the importance of planting trees. Yes, I will, of course, arrange a meeting with the Minister and the tree champion for the noble Lord, Lord Stone. The tree strategy, which is so important, is coming forward. We need to work on tree pests; we have invested £37 million on tree health.

My noble friend Lord Caithness spoke about health issues. The chief executive of Public Health England has written to the House of Commons Science and Technology Select Committee on this issue. Overall exposure is expected to remain low and, as such, there should be no consequences for public health. My noble friend Lord Caithness is absolutely right about rural crime, and my visits to farms just last week show not only the seriousness but the fearfulness of it.

On agriculture and fisheries, we need to work extremely effectively. On the agriculture Bill, a number of points have been raised. We plan to make a number of improvements to the Bill, including making clear the importance of food production. That reflects carefully on the scrutiny in the other place and, I am sure, the scrutiny there would have been in your Lordships’ House as well.

The noble and learned Lord, Lord Morris of Aberavon, is not in his place, so I think I will write to him fully on what we are doing in Wales, but we are working very effectively with the devolved Administrations on that.

So far as support for farmers is concerned—and I declare my own interest—it is very clear that we need to work particularly hard and effectively with farmers to ensure stability and certainty. That is why any projects we are funding that we have agreed before the end of 2020 will be funded for their full lifetime. Of course, as we said, we will retain the cash funds for the lifetime of this Parliament. I will write to my noble friends on labelling.

My noble friends Lady Byford, Lady Browning and Lord Caithness raised the food strategy. Henry Dimbleby is leading an independent review on this; a final report will be published in the summer of 2020 and a government White Paper will follow six months later. It is very important work. On food safety—again raised by my noble friend Lady Browning—I must be allowed, if the Chief Whip will ever speak to me again, to say again that this is really important. All food safety and public health import requirements will be maintained after exit. This is absolutely essential. The noble Lord, Lord Browne of Ladyton, spoke about plant security and biosecurity. Again, it is important that we have allocated resources to recruit additional inspectors. There are already more than 107 extra APHA inspectors, for instance. Invasive species are also my responsibility. The new Invasive and Alien Species (Enforcement and Permitting) Order 2019 is going to be a very important tool for us. On trophy hunting, I am also pleased to say that we will be consulting to restrict further the import and export of hunting trophies. The noble Baroness, Lady O’Neill, spoke about electoral campaigning. I must write to her on that.

At this point, I would have liked to have said many kind things to many noble Lords. I will ensure that the points raised by my noble friend Lord Shinkwin are answered. There is much more that I can write about and that is exactly what I will do. I apologise to the Chief Whip that I spoke for so long, but surely your Lordships’ contributions deserve that.