Economy: The Growth Plan 2022

Lord Birt Excerpts

Monday 10th October 2022 Lords Chamber

[Lord Birt (CB)]

Announcing unfunded tax cuts in the Government’s mini-Budget was all but universally condemned. There was no advance consultation, no leaning on expertise. The Permanent Secretary to the Treasury was summarily fired, the OBR’s offer of a forecast waved away. This appeared a back-of-the-envelope, “we know best” plan.

The immediate consequences of course were dramatic. The Bank of England was selling UK debt one moment and buying it back the next. It had to mount a massive and costly rescue of pension funds. We experienced a rapid rise in interest rates, impacting both individuals and business. The estimates of the future level of government debt ballooned and the cost of financing that debt rose to 4% and is still rising.

The impact of all these factors on redistribution will be chaotic; the full consequences ahead for public services are still unknown. The rationale, of course, was growth, and we all want more growth. The World Bank published a league table of growth rates for the G7 countries from 2008 to 2021. Is Britain in the relegation zone? No. In fact, we are near the top; we are third, behind the United States and Canada, and ahead of Germany, France and the rest—hardly a crisis.

The US is clearly top of the tree with a 1.9% average annual growth rate versus our 1.1% over that period. So, yes, it would be nice to be up there with the US—but how? Where is the analysis: not another back-of-the-envelope plan but a deep and evidenced diagnosis to help us understand what really stands in the way of higher growth in the UK? The notion that stimulating the economy at a time of full employment and high inflation will do the trick sustainably is widely condemned and wide of the mark.

One requirement for growth is clearly investment, yet we have now spooked the markets. Investors have a global perspective: they look for opportunity but will shy away if we fail to offer them reliability and stability too. Beyond that, what can government do?

We know that we have vast labour and skills shortages across the economy: crops unpicked, short-staffed restaurants unable to open on the days they used to, and too few doctors and nurses. I know from my own exposure to the real economy that we are short of many more skills—for example, data scientists, digital marketeers and engineers. The Institution of Engineering and Technology estimates a current shortfall of 200,000 across the economy. We need a massive drive to bring our system of education and skills into line with the UK’s economic needs.

Moreover—I experienced this very strongly myself—modern workers no longer live just down the road. Executives and specialists often fill jobs hundreds of miles from home, travelling huge distances each week to reach their work, crashing locally mid-week. Other workers commute long distances daily, and all travel to and from work unproductively in our crowded country, on the worst road and rail infrastructure in the developed world.

Addressing these and other problems will improve the trend line of UK growth, but problems largely ignored for decades will take decades to put right. The notion that we can suddenly accelerate beyond the US to a sustainable annual growth rate of 2.5% is manifestly unachievable. The sooner the Government come back down to earth and face reality, the better for us all.

Northern Ireland Protocol: Grace Period

Lord Birt Excerpts

Wednesday 10th March 2021 Lords Chamber

[Lord Frost (Con)]

This Government are working extremely hard to ensure the fair and free flow of trade between Great Britain and Northern Ireland. We have provided more than £200 million to support businesses through the trader support service and processed declarations for over 200,000 consignments. Some 34,000 businesses are registered and 98% of declarations are handled within 15 minutes. An EORI number is part of the requirement to trade now that we have left the customs union, but we are doing our utmost to ensure the free flow of trade between Great Britain and Northern Ireland as the protocol requires.

[Lord Birt (CB) [V]]

My Lords, I was heavily exposed to the Troubles across the whole span of my broadcasting career, so I am particularly alert to the delicacy of the current situation in Northern Ireland. The Governments of John Major and Tony Blair invested enormous political capital in resolving the tensions there. Will this Government?

[Lord Frost (Con)]

I thank the noble Lord for his question. Our overriding aim is to protect the peace process in Northern Ireland and the Belfast/Good Friday agreement. That is an avowed and primary purpose of the Northern Ireland protocol. As we implement the protocol in a pragmatic and proportionate way, we do so very mindful of the considerations he has in mind and protecting all aspects of the peace process.

Space Industry

Lord Birt Excerpts

Thursday 4th March 2021 Grand Committee

[Lord Birt (CB) [V]]

My Lords, I declare an interest as, until recently, vice-chair of Eutelsat. LEO—low earth orbit—satellites have high potential. Unlike geostationary satellites, they have low latency and universal reach, enabling instant broadband communication anywhere on the planet. But OneWeb, the LEO player in which the Government recently acquired a stake, has no track record, limited capability and went bust. How will OneWeb compete against other LEO players including Elon Musk, Amazon, China and the EU’s flagship project? How will OneWeb finance the massive rollout needed and acquire the capability to enter markets and reach customers? I ask the Minister: when will the Government finally articulate a long-term vision and plan for OneWeb?

EU-UK Trade and Cooperation Agreement

Lord Birt Excerpts

Friday 8th January 2021 Lords Chamber

[Lord Birt (CB) [V]]

My Lords, in 1945, Clement Attlee seized the moment and created the welfare state. In 1979, Margaret Thatcher rose to the challenge of superinflation, industrial strife and a broken economy.

In 2021, we face equally mighty challenges. As a nation, we are divided as rarely before. The union is under threat not only in Scotland but now, I suspect, with its new and unique status, in Northern Ireland too. Our public services are still depleted from the impact on the public sector of the 2008 financial shock. After a half-century of underinvestment, we have the worst transport infrastructure of any developed economy. We face massive housing shortages in both the public and private sectors. We have skill shortages at every level of the economy, from fruit pickers to roofers to data scientists. Yet the OBR’s November pull-together of the views of external forecasters such as the World Bank, the IMF and the OECD indicated that, with a trade deal of the kind just signed, the UK can expect a long-term reduction in GDP of 4% versus the current trend. Moreover, the pandemic will leave us with a debt mountain to clear, and we face the monumental task of meeting our net-zero goal.

We now need to put Britain back on its feet again. That will need considered, grounded, long-term policies, engagement and consensus building. That will all take a very long time indeed. We are in for a long haul.

Budget: Economic and Fiscal Outlook

Lord Birt Excerpts

Tuesday 5th May 2020 Lords Chamber

[Lord Birt (CB)]

My Lords, a disastrously infectious and pernicious virus has rendered obsolete both March’s Budget and February’s OBR outlook. That is because, as we know, every month that the lockdown continues we are losing around one-third of our GDP—the wealth that together we create, which finances our individual life choices and funds the NHS and every other public service. Without wealth creation, we are destined for public and private impoverishment. Around one-third of our workforce is now furloughed and an estimated 60% of our households have no savings. We cannot borrow for ever—or even for long—to fund the current massive shortfall in government revenues.

We and other western countries were slow to respond to the virus. We need a surer touch in emerging from the lockdown. We must first reduce new cases to low numbers, as Germany and New Zealand have done, and then we need a capability at scale to test, trace and isolate. South Korea—a nation our size—is the exemplar here, experiencing only 250 deaths. All the while, we must maintain a standby capability for fear of a second wave.

In emerging from the lockdown, we must recognise that every business is singular: with a unique mix of suppliers from home and abroad, a unique mix of customers, and a unique offer of products and services. Every business has been affected differently by the lockdown, and every business will have to design its own unique route out, consistent always with a tireless concern for the safety of its staff and customers.

Even then, world markets will be uncertain. China is back at work, but its consumers are not yet spending. The US has 30 million new jobless. This will remain an unsettled world until science can come to our rescue with a treatment or a vaccine. I fear that we will certainly and quite soon need a fresh OBR outlook and a new Budget. But in the meantime, we must do everything we can to put business back on its feet again. Back to work we really must go.

Carillion

Lord Birt Excerpts

Monday 15th January 2018 Lords Chamber

[Lord Young of Cookham]

That goes slightly wider than the Statement. There are a few limited circumstances where the Government have undertaken to reimburse people bidding for a contract for the costs of tendering. As a general principle, the Government do not pay—nor does any customer pay—for people to produce a bid. Obviously, there would be consequences for public expenditure if we went down that road. At the moment, it is not such a deterrent that we are failing to get good competition for contracts. If it appeared to be a serious deterrent, we would look at it again, but at the moment I do not think that that is the case.

[Lord Birt (CB)]

My Lords, the Carillion share price crashed in July and pretty much overnight lost 75% of its value, leaving a company with £900 million worth of debt, a pension deficit of £600 million, a market cap of £60 million and three major public sector contracts of considerable value seriously overrunning. As the Minister said, subsequent to July, seven contracts were awarded by the Government or the public sector. Was that wise? Surely, the noble Lord, Lord Lawson, is right. We must look again at the ways that contracts are awarded, and frankly at the competence of the Government in managing such contracts.

[Lord Young of Cookham]

I said a few moments ago in response to another question that, of those contracts let since July, six were joint ventures where the exposure to Carillion was substantially reduced by having other contractors underwriting Carillion if it were to withdraw. The Government can take some credit for making those precautions available. On the noble Lord’s general point, which reinforced what my noble friend Lord Lawson said, I indicated in response to an earlier question that if the assessments made of the robustness of Carillion in July ticked all the boxes in the tender document and they had to be adhered to, I agree with my noble friend Lord Lawson that this is something that we should have another look at.

Soft Power and the UK’s Influence (Select Committee Report)

Lord Birt Excerpts

Tuesday 10th March 2015 Lords Chamber

[Lord Birt (CB)]

My Lords, we are very grateful to the noble Lord, Lord Howell, one of the most thoughtful Members of this House, for his leadership on this important matter.

Rarely has our world been so troubled: over the past decade, we have suffered a global economic convulsion; Russia flexes its muscles on Europe’s eastern flank; the Middle East is racked by multiple tensions; and merciless philosophies galvanise new terrorist movements, both widely and in our midst. We are of course here to discuss soft power but we need hard power, too. Yes, we must bear down on our deficit but we must also define and fund a robust defence policy for the next 10 to 20 years, based on the range of threats against which we may need, as a nation, to defend ourselves. That is what good Governments do, whether or not there are votes in it. Only if we have a cogent and sustainable defence policy can we bring leadership, above all on our doorstep. Europe’s military capability does not match, as it should, Europe’s economic weight.

If we need hard power to defend ourselves against the evils of the world, we need soft power to try to make ours a better world. In the UK, as the noble Lord, Lord Soley, has just said, we care about the rule of law. We also care about global poverty, climate change, human rights, free trade and self-determination. We want to promote tolerance, respect for difference and freedom of expression. Yet we recognise that this is a long haul. The anniversary of Magna Carta reminds us what a struggle it is in any society to achieve stability and harmony. We in the UK influence the world more than most, as others have said, because we are listened to more than most. That is not only for our commitment to a set of values and beliefs but for our contributions to science, learning, the arts and culture, and to wit. We can inspire the world with Shakespeare and Jane Austen, delight it with the Beatles and Ed Sheeran and entertain it with James Bond, Harry Potter and “Doctor Who”.

Again, as others have said more than once, no UK institution can and does project soft power more effectively than the BBC, the world’s best known and respected media brand. Ask Mikhail Gorbachev or Aung San Suu Kyi—or now the noble Lord, Lord Forsyth, a welcome conversion—if you doubt that. Yet the BBC faces substantial challenges in continuing to maintain its pole position. Here I fear I must strike a sharper note than other noble Lords, for one of the most shameful acts in the history of the BBC was this coalition Government’s midnight raid on the BBC’s coffers, requiring it overnight, with no prior public or parliamentary debate whatever, to fund S4C, BBC Monitoring and BBC World Service from the licence fee. This ambush effectively cut one-sixth from the budget of the pre-existing BBC and cannot be glossed over or simply waved away. Moreover, this action breached a clear principle which had been held for almost a century: that the licence fee paid only for services for UK licence fee payers, and that the Government commissioned overseas services at arm’s length from an editorially independent BBC and funded them from taxation.

Worse still, the FCO fought to have its cake and eat it, too. It sought to continue to determine what world services the BBC should offer, in spite of the fact that the FCO would no longer fund them. For the first time in its history, and in breach of another sacred principle—established long ago when John Reith successfully fought off Winston Churchill’s bid to control the BBC during the General Strike—the Government are seeking to specify in detail the services that the BBC should offer. No one knows better than me that the BBC World Service is a sacred trust, but this deeply unsatisfactory and unprincipled position must be put right in the forthcoming BBC charter review. Indeed, the BBC and the Government should go further and fundamentally redefine what the BBC’s world role should be in the light not only of a new global order, about which many have spoken, but of revolutionary technological change. I do not expect that many potential recruits to IS listen to short wave radio. Rather, as we know, they engage in social media and plumb the darker depths of the internet. World Service provision needs to be rethought and reinvented for the digital age. Other BBC services, such as BBC America, valuably reach different audiences, but here, too, as a society we need to ask if we can build on that success and extend the BBC’s reach further across the globe.

The final critical issue to be addressed during charter review is the chronic undernourishment of the BBC’s World News television channel. The BBC has not only the most trusted and respected news ethos in the world, but also by far the largest and most extensive global news reach. Yet from China, Russia and the Middle East we see services—far more richly funded—aimed at global audiences that may eventually eclipse the BBC’s global news channel, unless and until that service receives a real transfusion of resources and can bulk up. In short, Britain needs not only a fit-for-purpose defence policy but a thorough consideration of how the world’s most powerful cultural institution can more effectively extend our soft power.

The Future of the Civil Service

Lord Birt Excerpts

Thursday 16th January 2014 Lords Chamber

[Lord Birt (CB)]

My Lords, I worked intensively with the Civil Service for six years when I was in government, and with officials at all levels, generally on major, long-running projects. It was for me a most happy experience. These were people of exceptional talent, of real commitment, and of absolute integrity.

In the higher reaches of the Civil Service, well-represented here today, the sense of wisdom, experience and steeliness is tangible. They and their ancestors have been to war, literally and metaphorically, and it shows. But with the scope and extent of the modern state, the Civil Service today faces challenges of unprecedented scale and complexity; and though it has adapted, I do not think it has yet fully adapted to meet those modern challenges.

The skills found in the best-run private sector corporations are insufficiently developed still in Whitehall: for example, a forensic understanding of the total environment in which public institutions are operating; or the ability to analyse closely where in a system economic value is being created or destroyed; or the capacity to deliver, as many have mentioned, large-scale projects with multiple partners. There is a lack of clarity about governance and accountability. Where does the buck stop on long-term projects which may span the terms of office of many Ministers and officials? How can Ministers deal with under-performing or insufficiently skilled officials? How can officials be protected from inexperienced Ministers who make unmeetable demands, which they do in all Governments?

I do think it is an appropriate time to review how we can build a Civil Service fit for modern times; how we can radically improve accountability and responsibility for delivery; how we can create mechanisms which protect the impartiality, the independence and the long-term stewardship of the Civil Service, yet give Ministers the confidence that they have the tools to do their jobs. I do not doubt that we have the best Civil Service in the world. Let us make it better still.

Syria and the Use of Chemical Weapons

Lord Birt Excerpts

Thursday 29th August 2013 Lords Chamber

[Lord Birt]

My Lords, throughout history, nations have taken military action out of self interest, but they have increasingly acted with the good of others prominent, or at least present, among their motives. As many have mentioned, we intervened in Sierra Leone to prevent an elected Government being deposed by gangsterism. We deterred a possible massacre in Kosovo and we helped to throw out Saddam after his unlawful invasion of Kuwait. Out of common humanity, I am one who strongly supports the fundamental notion of using military force to avert barbarity. I regret, as does President Clinton, that in Rwanda we failed to stop the worst massacre of modern times, and that we stood by in Bosnia.

However, the consequences of military action cannot easily be predicted. It can be quick and decisive in pursuit of a clear goal, as in the Falklands, but it can also spiral out of control, as in our second venture in Iraq. Military action is not only unpredictable, it is never cost-free. It will always involve sacrifice and pain. In World War II, the United States had to transform its economy, mobilise millions and suffer massive loss of life to save a continent an ocean away from totalitarianism.

The issue before us, that of the use of chemical weapons in Syria, is heinous and grotesque. As the noble Lord, Lord Watson, has just mentioned, the sight of those bodies—men, women, children and babies—in neat serried ranks enshrouded in their kafans was heartrending. So what, as many have asked, should our objective now be; what our response? A civil war of great complexity is raging within Syria with a multiplicity of groups and their supporters defined by faith, politics and other national interests—the splits within splits that were graphically described by the noble Lord, Lord King. I can see no immediate prospect of any military or diplomatic intervention that would bring an early end to that tragic conflict, although the noble Lord, Lord Kerr, among others, credibly delineated a pathway that might draw in Russia and Iran.

The reasonable objective of a finite, limited and clinical military strike could be, as many have said, to deter the further use of weapons of mass destruction in Syria and even elsewhere in the world. But for all the aforementioned reasons, before picking the military option, there must be a reasonable expectation, as the noble Lord, Lord Hurd, suggested, that more good than harm will flow from such an action. It is not clear that it will. The situation in Syria is unusually tangled. We have a ruthless regime in place with advanced weaponry, which is fighting for its life with few options open to it. Moreover, Syria is located in the most troubled and unsettled part of the world—the “powder keg” described by the noble Lord, Lord West—riven by rivalry, history and hate. Syria is itself sponsored and supplied by a nuclear superpower.

We can all be genuinely united in our sense of outrage and repugnance. We will all want the whole world to signal that the use of such weapons is unacceptable. We will all agree that those involved must in due course and when possible—and it will be possible—be brought to justice before the international courts. However, like most who have spoken in this excellent, informed debate, I am not yet persuaded that military action is the right course in this particular set of circumstances.

English Premier League Football

Lord Birt Excerpts

Thursday 25th July 2013 Lords Chamber

[Lord Birt]

My Lords, let us hope that there is still time to convert the noble Lord, Lord Lipsey, at least to the pleasures of watching our beautiful game. I thank the noble Lord, Lord Bates, for allowing us to indulge our passions, and wish him luck with his super-marathon.

The English Premier League will be 21 next month. By any measure, it has been an outstanding success. In the 1980s I scheduled ITV at the weekend. Deeply conservative, the then Football League, fearful that live coverage would undermine match attendance, would only agree to the televising of a small number of recorded games. The appeal of football on television at that time might best be described as meagre. Now we have a league which is the envy of the world. It earns far greater revenues than any other—its broadcast income is nearly three times that of Germany’s Bundesliga—and it attracts the world's best players. Week after week it offers the most exciting football. No other league wins such a gigantic global following. About 20% of the world's population regularly watch Premier League football.

Last year I trekked with my wife in Nepal, high up in the Himalayas, walking through villages with only limited and locally sourced solar and hydro power—villages scarcely changed in hundreds of years. Yet as we passed the kids were shouting out, “Wayne Rooney! John Terry! Steven Gerrard!”. Many foreigners do not just, as others have described, follow the Premiership on TV; they fly here in numbers to watch games in our stadia. I hear Icelandic and other languages, as well as Scouse, spoken in the crowd as I exit Anfield.

The Premier League has wonderful stadia, impressive community outreach, and ethnic and religious diversity in its squads and in its support, promoting greater community harmony. The founding principles of the Premier League were well considered, above all the relatively equitable split of broadcast revenues. This is in sharp contrast to La Liga, for instance, where Real Madrid and Barcelona take the lion’s share of revenues and leave most Spanish clubs impoverished by comparison. For the Premier League—this is critical—the consequence is that on its day, any one team can beat any one other team. Last season, for instance: Norwich 1, Manchester United 0. That had Delia beaming. The noble Lord, Lord Addington, might not have seen the game, but no doubt he too noted the result with pleasure. Sunderland 1, Manchester City 0; and then there was Harry Redknapp, who had a miserable season but one great consolation prize: Chelsea 0, QPR 1. The strength and unpredictability of the league is an important reason for its national and global success.

As well as its well considered founding principles, the Premier League also benefited enormously from the effective and early development by Sky in the UK of satellite subscription services and from the high quality of coverage that Sky has provided.

What should concern us about the Premier League? First, it is too early to call it a trend, but we performed poorly in the Champions League last year. While an equitable approach to splitting revenue brings evident benefits, there is a case for favouring the stronger clubs in the split of international revenues if they are to continue to compete with Europe’s best. Secondly, we need to be watchful that the rules of financial fair play are enforced here in the UK and evenly across Europe. We need, for instance, to guard against sponsorship at above-market rates as a form of hidden subsidy.

Thirdly, the FA and the Premier League need to ensure the prudent stewardship of clubs, which are community, not just financial, assets. Clubs should spend only what they earn. They should not pile on unsustainable levels of debt. The fans of 115 year-old Portsmouth FC did not deserve the long drop to the fourth tier of English football, as the noble Lord, Lord Watson, reminded us.

Fourthly, in contrast to our club sides, and as many have observed in this debate, England’s national team has disappointed—1966 is almost half a century away. We field teams containing world-class players but which perform poorly. Who here remembers—maybe we would like to forget—our leaden, lumbering 4-1 defeat at the hands of a young and fresh-faced but untried German team in the 2010 World Cup? In an era where we have seen our athletes and our cyclists shine, the FA and the Premier League need to work together to identify how English football can match those achievements and compete at top international level, as the noble Lord, Lord Wei, observed.

One contributing factor may be that our premier clubs can outbid other leagues for the best global talent, squeezing English players in the process. Perhaps I may add to some of the pungent comments made earlier by the noble Lord, Lord Faulkner: last season in the Bundesliga, 50% of squad players were German nationals. In the Premier League, the equivalent was far lower, at 37%. Fewer than a third of the players representing Premier League clubs in the Champions League last season were English.

While we should strive to do better still, let us give thanks, on behalf of the one-third of the population for whom the Premier League is a critical part of their everyday lives, for the intensity of experience that it brings us and, on occasions—and hopefully next season for me with Liverpool—for the sheer joy and jubilation.