Budget Statement
Lord Bishop of Birmingham Excerpts(9 years, 5 months ago)
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The Lord Bishop of Birmingham
My Lords, I am grateful for the Minister’s reprise of the recent Budget Statement and for the opportunity to join this debate. I welcome the expectation of a strengthened economy. I also welcome the aspiration for the common sense of living within our means and the wisdom of reducing both the deficit and national debt as a proportion of GDP.
The Minister is more aware than most of the difficulties and costs of such ambitions, as the Government seek to address the weaknesses of our economy, identified in the Budget as low investment, low skills, low wages and low productivity. Will he agree that in a Budget for a one-nation economy, the effects of resolving these difficulties and the costs they incur should be spread justly and proportionately across society, and that a transition to an economy where, as the Chancellor said, “all can prosper” will require all the rigour and vigour of an inclusive capitalism?
The aim of adjusting benefits, as the Minister has already mentioned today, to a proper level of support—indeed, the sort of support envisaged by the founders of the welfare state—and away from the drudgery of false dependency will be achieved only if there are affordable jobs providing the foundation for households that are not only self-sustaining but wealth-building. Meanwhile, as these jobs are emerging in a strengthening economy, and with our increasing ability to compete in a global market, will the Minister give details of whether the working-age benefits freeze and the changes in tax credits that have been outlined—highlighted in the calculations of the Institute for Fiscal Studies—will result in more young people being better off or worse off, even with the new living wage?
I am grateful that the Minister again waved the Fixing the Foundations document, which he encouraged us to read at Questions a few days ago. I have been pleased to do so, and found it inspiring and encouraging, as someone who formerly ran businesses and was part of the economy. There are more details in that than can be dealt with today—and I was grateful that the noble Baroness, Lady Kramer, mentioned that we might debate these in more detail at future opportunities.
Today I want to emphasise two interlinked elements of productivity: skills and the regions. The Minister knows that improved productivity, resulting in well-resourced jobs, requires a complex range of measures, including investment capital and research and development, to put into practice enterprising and risky ideas in the local economies, and ideas producing popular goods and services that people want to buy, meaning that the company and workers are rewarded for its enterprise with affordable wages. Then there are the wider issues of good infrastructure that he mentioned, such as transport, housing, healthcare and policing—but also, of course, a practical planning framework. In all this, I ask that the immediate focus in this wide menu of policies should be on the development of skills that connect directly with the opportunities of business, manufacturing, science, technology and administration.
The emphasis on universities is most welcome at that high level, and we know that we should develop more highly skilled adventurers in developing our economy, not just have to import them from overseas. But will the Minister affirm that with apprenticeships—the target of 3 million has been mentioned—there is an intentional link with education, which has been mentioned in passing, and the aspiration of independent living with this desire for enterprise and profitability? There is a joining up that needs to be done if we are to make a real difference in the lives of this generation in the life of this Parliament.
Furthermore, will the Minister encourage the streamlining not just of universities but of further education in the regions, and the provision of particular support for talented teenagers from poorly resourced backgrounds for these apprenticeships? I am thinking not only of incentives for businesses, which have been outlined in the arrangements, but for those individual, aspiring young people for whom access to travel-to-work costs and the dream of independent housing is still far out of reach. These and other measures are in my view—and, I believe, in the Government’s—best achieved with a very strong commitment to regional responsibility and autonomy. Your Lordships touched on this at the end of the previous debate.
Investment in infrastructure and public services has already been mentioned as a regional good, not least in the same breath as the northern powerhouse. But will the Government now give similar public attention to fuelling the Midlands engine? In the Midlands there is 24% of manufacturing; it is the strongest exporter, with an increase of more than 70% in the past six years, and the only region with a trade surplus with China. I urge the Government not to wait for a perfect political Midlands settlement or restructuring but to support current initiatives towards increased productivity —for example, with Midlands Connect, which is making a marvellous vision for transport infrastructure. Then there is Drive West Midlands, which is about the automotive supply chain—and, of course, returning to the skills agenda, there is the ambition for Birmingham to be a CSR city, joining professions, commerce and businesses to the most deprived schools in the most deprived wards in Birmingham.
The invaluable one-to-one mentoring that is behind the high-level macro and microeconomic policies that we are debating today, and the generous person-to-person relationships and resourcing needed to bring these new participants, who otherwise will not join in the benefits of all that we are planning today, is one of the most remarkable opportunities for what might be called a remodelled regional civic virtue, as those who have are able to bring into this wonderful country of ours the opportunities for those who have not. The test of the success of this and future Budgets for a country living within its means will be the growing number of households that are equipped and completely free to earn the means to live. I trust that the Government and the Minister, with all his expertise, will be able to provide us with measurable evidence of those new households in the months and years to come.
Financial Services (Banking Reform) Bill
Lord Bishop of Birmingham Excerpts(11 years ago)
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Baroness Cohen of Pimlico (Lab)
My Lords, I rise to support Amendment 21 and will speak to Amendment 20. I am sure that we are all very grateful to my noble friend Lord Mitchell for his tireless efforts in bringing the payday lenders under regulation. I am sure that that is the best result for everybody. I also support his remarks about how we actually need payday lenders. They fill a gap that no one else fills. If you have no food in the house or your car needs repairing in order for you to get to work, and if your family and friends cannot help, there is nobody but the payday lenders. They are colossally efficient—as my noble friend Lord Mitchell found out when he bravely took out a payday loan. They will get you the money very quickly.
That is a function that, in my youth, was fulfilled by employers by way of something called the “sub”. At one point, I was the industrial relations man, temporarily, on the Western Avenue extension. About a third of that whole site received subs on their pay. The rules stopped you receiving a sub for more than three days ahead of time and of course it was not paid interest. I do not think that happens any more and the payday lenders have come into that gap.
What have not come into that gap and are not yet organised to fill it are the credit unions. I very much welcome the most reverend Primate the Archbishop of Canterbury’s view that the credit unions can fill this gap, but they cannot do so at the moment. They are just not fast or efficient enough. I would very much like to encourage, in all work on credit unions that the most reverend Primate is undertaking—and which I shall be pleased to join in on—that they be a bit more like the dreaded payday lenders in their speed, efficiency and ability to respond to need.
The Lord Bishop of Birmingham
My Lords, I take a moment to thank the noble Lord, Lord Lawson, for his kind remarks about my friend the most reverend Primate’s speech last Thursday. I shall pass that on to him. He regrets that he is not in his place today. He is presiding over a whole number of bishops—it amounts to about the number of noble Lords in your Lordships’ House tonight—up in York.
I support these amendments, particularly Amendment 22 on the timetable. I am grateful for the Government’s approach and seriousness towards this payday lending crisis. The examples we have heard from noble Lords about the experience of poverty are gruesome. I should like to introduce a new element of competition to the response time for this particular bit of industry in terms of its timetable, because the risk, referred to by the noble Lord, Lord Newby, to the industry itself in not getting it right is paralleled by the risk just mentioned by the noble Lord, Lord Mitchell, of people having yet another Christmas borrowing at too great a cost and risk to their own future and that of their family. The Minister is trying to set a final deadline of January but I ask that he really encourage the industry to bring this forward to 1 October.
We have heard about the industry’s complexities and the credit unions that are needed. We have also heard of the encouragement this would give to those who are working very hard to provide effective money advice to those who are managing unmanageable debt and to help those young people who have been mentioned start handling their money properly. Local charities, churches and the faith groups are responding to the Government’s approach to tackling this global financial crisis. However, the slow timetable—several years before all this is implemented—is a completely different timetable from that of someone who has no resources, who has no back-up and who is looking for food tomorrow. I encourage people to support this amendment.
Lord Eatwell
My Lords, my noble friend Lord Mitchell in speaking to his amendment on the proposed date referred to 90 days. One might ask how 90 days can make a difference. Surely when the Government need something to be done they can get it done. The idea that somehow the whole process is so darn elaborate that they cannot do it in a period of time which saves 90 days on their side is, in the true meaning of the word, incredible. On the other hand, for the borrower 90 days includes Christmas Day 2014. That is a big issue, because this is the period when short-term borrowing is at its peak. That is why it is incumbent on this Government to take swift action. They have been dragging their feet on this issue for four years. It is incumbent on them to take swift action and that is why Amendment 22 is so important.
The noble Lord, Lord Sharkey, has raised a crucial and frightening point—that payday lenders within the European Economic Area could lend within the UK. I hope the Minister will be able to tell us that we are not wasting our time completely this evening—because that is what that would mean we would be doing—and that the noble Lord’s fears are unfounded.
Swift action is so important that when this amendment is called I intend to test the opinion of the House.
Banking: Parliamentary Commission on Banking Standards
Lord Bishop of Birmingham Excerpts(11 years ago)
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The Lord Bishop of Birmingham
My Lords, I welcome warmly the noble Lord, Lord Carrington, to your Lordships’ House and congratulate him on a most succinct but wise and constructive maiden speech. His knowledge of finance and banking is exemplary. We have already heard from my friend the most reverend Primate of the noble Lord’s service in the other place, notably as chair of the Treasury Committee. He also brings a wealth of experience in banking. The particular bank mentioned, Gatehouse, of which he is deputy chairman, has this remarkable attention to Islamic finance. As someone who serves in Birmingham, that is of course well known and much appreciated.
Your Lordships may also like to know that the noble Lord, Lord Carrington, is a trustee of the St John’s Notting Hill restoration trust. That is something that he did not find time to mention in his maiden speech, but about which I hope that we will hear more in the future. It is a beautiful Victorian building which, at the same time, has a new community hub associated with it, bringing together a reimagination of ministry and parish outreach to ordinary people. On these Benches and across the House, we wish the noble Lord, Lord Carrington, great success in that project and a most enjoyable time as he serves here in this place.
I welcome the enormous contribution of the Parliamentary Commission on Banking Standards, and recognise the structural and technical details contained in our extensive debates over the past few months. I want to focus on the imperative of driving change in our culture, which many noble Lords mentioned, including the most reverend Primate—as the noble Lord, Lord Brooke, said, he played a blinder. I am sure that although he had the privilege of visiting Birmingham last night, it was not a peaky blinder—if your Lordships are aware of that television programme and early 20th-century behaviour.
The debates that we have had are about the balance of regulation and freedom. They have included a realistic approach to our position in global capitalism, and its benefits and dangers—the benefits and dangers, too, to our national economy—and to the remarkable achievement of the banking industry over the years. At the same time, there is an underlying desire to see enterprise, which develops wealth, continue. Those who know the parables of Jesus know that wealth for the ambitious and successful farmer was in no way criticised; what was criticised, and ultimately judged fatally, was the farmer’s use of the abundant wealth that he had created and his selfishness in keeping it for his own use.
The reports before us have serious recommendations about increased responsibility, greater and clearer accountability, more competition in the industry, better business judgment and a vision for the long term. Coming from a business city such as Birmingham, outside London, I would like to reflect for a moment on the perception of our progress so far in these areas. What we have done and are doing here will be judged by whether it makes a difference to the tens of thousands of employees of the industry, and to the hundreds of thousands of clients and customers who are necessarily dependent on its success.
What about increasing responsibility? I have noticed that in each of these areas we are encouraged to see the responses to the detail of the commission, as well as that of the Government to its recommendations, in a constructive and positive way. The Deutsche Bank chief executive, who was at a conference the other day of all the risk managers for the global company, said that his bank will combine a culture of performance with a culture of responsibility. This is a great ambition for a commercial operation, and one that the chief executive says will do good for the world.
Increasing responsibility is being taken at corporate level, and much of the detail of our work has been on that. It is also being taken at the individual level. For example, regionally in the Royal Bank of Scotland, local directors are responding to their chief executive’s advice that to know their community as well as their business and retail clients, is good for business, but also that it is the right thing to do in exercising power and success. Greater accountability is part of our debate, and we have heard about the regulations and regulators. The Ecumenical Council for Corporate Responsibility’s report, The Banks and Society, which was published and ignored in March 2011, is now on the agenda of regional and perhaps national bank leaders, along with its main recommendations—particularly the desire for transparency in the business activity of a bank in a region that is trying to develop the economy as whole. That kind of approach and permission from the centre will be much welcomed.
More competition can be seen in the regional banks that may be emerging. From my own interest in the Church Commissioners, I know that the proposed Williams & Glyn’s Bank, which is emerging from the 300 RBS branches, may have an opportunity to demonstrate how to be a good bank in the terms that we have already heard about, but at the same time that it will be freed from some of the responsibilities of the bigger banks and respond to people’s needs locally. The background to that bank’s ambitions touch on most of the areas that we have been dealing with in these debates, whether that is to do with remuneration, a reluctance to indulge in—or even a ban on—proprietary trading, the participation of all the staff, appropriate levels of leverage, and whether, simply, as all the banks seem to say, that it is important to treat your customers well.
Would we get better business judgment? We heard again recently of another series of bad debts, and of the difficulties one of the major banks had in dealing with them. However, to follow, for example, the recent discussion led by Andrew Whittaker of Lloyds Bank, the approach of proper risk management is something that people, both locally and nationally, expect to operate at a very high level of skill and attention. In a healthy and successful business one would expect certain things—the nuances of avoiding looking the wrong way at the wrong time, self-deception that gets going when we have a lot of power and adventure, opportunity taken without due diligence, misplaced assumptions about the future, lack of contingency, and so on—to be part of the bread and butter of how the governance is operating.
In conclusion, I will touch upon that discussion in the reports about longer-term vision. As the noble Lord, Lord Carrington, said, we not only hope that we will have a vigorous and world-beating industry here, we expect in the regions and localities that the powerful engine of the economy will also attend to bringing more of the poorer and less powerful people into the economy. It can do that by attending to credit unions and to the needs of people by removing and managing unmanageable debt, and by the ability to go into all the communities and schools and enable young people from the very start to know that money is a very good and wonderful thing if it is managed responsibly for their own good and for the good of their community.
I hope that the areas of expectation that are woven through these reports will build up, as noble Lords have said, that elusive and most precious gift of a renewed trust in one of our most fundamental industries, for the good of community and of society. I hope that people will begin not only to say, proudly, that that industry is a good mega-engine driver for the economy, contributing to rather than drawing from taxpayers’ money, but also that their participation, as an ordinary citizen or a micro, small or medium-sized enterprise—which is how most of the people in this country begin to participate in the economy—will be one of the long-term fruits of all your Lordships’ work. I trust that we ourselves will continue to remain accountable for making sure that banks exist to enable the economy to work and not to be the economy itself.
Financial Services (Banking Reform) Bill
Lord Bishop of Birmingham Excerpts(11 years, 1 month ago)
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The Lord Bishop of Birmingham
My Lords, I rise to speak on behalf of the most reverend Primate the Archbishop of Canterbury. He regrets very much that he cannot be in his seat today, but it is seldom that one has the opportunity to offer Christian baptism to a young couple, particularly when their child is a future heir to the throne of this country. None the less, I know that he, like me, would want to echo the support for these amendments, which have been spoken to by the noble Lords, Lord Turnbull and Lord Eatwell. In a sense, I now regret that I am here doing my duty, because I could not have put it better myself.
In the wake of the economic debacles following 2008, one of the greatest areas of concern among the public was the apparent lack of change in the financial fortunes of those whom they viewed as being most responsible for the banking crisis. As we have heard, the salaries of senior bankers seem to remain high and bonus levels have quickly regained their old levels, while for many ordinary people and ordinary businesses across the country, it has been a matter of tightening the belt and looking very seriously at difficult household and commercial budget decisions. The submission of the Church of England’s Mission and Public Affairs Council to the banking commission said of this disparity between what I am going to talk about as two cultures that it,
“has gravely harmed the public perception of banking”.
Recognition of the disjunction between these disconnected groups—the wider public, who need the services of good banks, and those who lead those banks—is, I believe, at the heart of what these amendments seek to achieve. It is about implementing sensible measures, and we have been very sensible this afternoon, one with another, about what needs to be done: striking an appropriate balance between risk and reward; looking to the long-term benefits of decisions made by key figures in the banks; and giving incentives for a trustworthy and productive culture, rather than one that promotes excessive risks, ending in disaster. Deferred remuneration, which we have in this proposal, and clawback provisions —central components of the proposed remuneration code—are technical terms, but at the heart of these principles is a simple question: what sort of culture, as has been mentioned by several noble Lords, do we want to establish in these organisations? As the most reverend Primate the Archbishop of Canterbury has already pointed out to the Committee, one rather well known former banking executive said that there had been a culture in the banks focused on what happened when people were not looking.
There is now an increasing interest, including in your Lordships’ House, in culture, and we heard from the noble Lord, Lord Lawson, about the two principles of prudence and customer-centred or customer-focused culture. I hope that both the Government and the banks will give a high priority to insisting on these profound changes in culture. Indeed, at a regional level—and this may seem a little parochial for the high level of discussion that we are engaged in this afternoon—in Birmingham and the Midlands, well resourced bank employees from well resourced organisations, their banks, are already looking way beyond their computer screens and boardrooms to wider and deeper responsibilities in the community. They are looking at simple things such as finding and supporting young entrepreneurs, and giving basic financial skills to local citizens—I have said before in your Lordships’ House that there are 100,000 citizens in Birmingham who do not have a bank account—and they are even getting involved in making sure that future employees of the bank in our local primary schools have enough food at breakfast so that they can learn the basic skills of their education.
These tentative cross-cultural relationships and initiatives give me hope not only that executives in banks will run sound businesses but that, as they experience and affect for good the lives of ordinary citizens, including those who are much less protected than themselves in ordinary life, the worthy values printed in the foyers of the headquarters of many of our large banks may at last begin to enter not just the policies of the banks and their structures and cultures but the policies, structures and cultures of the leading executives in those banks. I shall mention just one of those banks where these values appear; in fact, I may not mention which bank it is because I think that noble Lords should try to work out which one I am talking about. Those values read: “Serving Customers”; “Working Together”; “Doing the Right Thing”—a new one that has been inserted; and, fourthly, “Thinking Long Term”. It is in the policies, structures and cultures of the leading executives in those banks that I believe culture change will really happen. We have high expectations of that change but, as many noble Lords have said, it needs to be undergirded by legislation. It cannot be left simply to hope or chance or to the individual motivation of altruistic colleagues.
Therefore, I welcome that in both amendments we find provisions to limit sales-based incentives at both the individual and business unit level. In the PPI scandal, we saw what happens when banks come to value the sale of financial products as the objective of the whole exercise, with little or no thought for customers’ needs. Banks are now having to take responsibility for this culture of “selling at any cost” and the new remuneration code before us seeks to make explicit the realisation that an excessively sales-based culture can be very damaging both to the financial well-being of customers and to the reputation of the banks.
I hope that my noble friend the Minister will recognise that this amendment is not seeking to overly restrict remuneration, devalue the work that our senior bankers undertake or unduly affect the competitiveness of our world-beating banking sector. What it does is to set out some of the values and virtues that should underlie the banking system: long-term risk management; a fair balance between risk and rewards; valuing customer needs above the sale; and, above all, valuing collective interest beyond the individual or the unit, or even the bank itself. This will be good for both business and society.
Lord Phillips of Sudbury
My Lords, I commend the mover of the amendment, the noble Lord, Lord Turnbull. If, as I assume, this matter is brought back at Report, I should like to raise two questions. The first concerns the fact that the code is to be solely the responsibility of the FCA and the PRA. I wonder whether it should have a broader base than that. The City is a real bubble. The two authorities are part of that bubble, as are most of the people working in them. Everybody—particularly the noble Lord, Lord Turnbull, in moving the amendment—has said that we have to break out of this small enclave to understand the wider national, social and cultural impact of what is going on in the square mile. I just throw that idea out.
My second question concerns proposed new subsection (3)(a) in the amendment, which requires that those subject to the code shall,
“receive a proportion of their remuneration in the form of variable remuneration”,
although it does allow specific exceptions. For the life of me, I do not see why that is being insisted upon. Twenty-five years ago, most of the senior bank executives and those on the boards of banks did not receive a variable element in their remuneration at all. The problem that the amendment seeks to address was not present then, or at least not remotely to the degree that it now is. Therefore, again, if this matter is to be brought back at Report, I should be grateful if more thought could be given to the need for subsection (3)(a).
Financial Services (Banking Reform) Bill
Lord Bishop of Birmingham Excerpts(11 years, 4 months ago)
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The Lord Bishop of Birmingham
My Lords, I am grateful to the noble Lord, Lord Eatwell, for his kind remarks about members of the banking commission who sit in this House, not least my friend the most reverend Primate the Archbishop of Canterbury, who, sadly, is not in his place today but fully intends to be so many times in the autumn when the commission’s work will be discussed in this House in more detail. Perhaps I can partially stand in his place as we spent many years in different parts of the oil industry before entering another sort of multinational work.
We appreciate the practical themes in the Financial Services (Banking Reform) Bill and the opportunity that it provides to implement the recommendations of the Vickers report and, more recently, of the Parliamentary Commission on Banking Standards. As the Community Investment Coalition put it, the Bill provides an opportunity,
“for Britain to continue as a leading global financial centre, while at the same time protecting ordinary working people”.
I thought that that conveyed rather well the complexity of the issues with which we are dealing.
As we face up to the essential and urgent reform of a sector that should indeed play a major part in our national well-being and prosperity we are presented not only with proposals for regulation and structural change but with the broader themes of cultural change, including appropriate standards for the industry. Those who have heard the discussions on the Radio 4 programme “The Bishop and the Bankers”—it is available on iPlayer and has two more sessions to go—have been reminded that the capitalist system on which we all depend for our welfare can, in its search for efficiency and other objectives, become dehumanised and disconnected from the needs and culture of individuals. Therefore the structural proposal to ring-fence retail banks is most welcome, but only—as has been noted already today as well as in another place and by the commission—if the electric current in the fence is strong enough to ensure compliance with our intentions.
The proposal to include a competition element in the Prudential Regulation Authority is also attractive, but will it go far enough? I hope that in promoting real alternatives to the present arrangements we will keep our vision precise and technical—as I am sure many speeches today will be—but that we will also keep in view the long-term possibility of a much better arrangement for the country as a whole. As we focus both on the struggle of ordinary people to manage with what little money they have, and on the need for micro, small and medium-sized businesses to stay on their feet in competitive local and export markets, strong arguments are being made not only for a new regional bank but for more support for credit unions and other local arrangements, with the potential, particularly as regards the latter, to put an end to the corrosion of payday lending and the unacceptable effects of the poverty premium.
To get an image of what this might look like we could consider one bank which operates in this country from overseas whose philosophy originally was for the manager of a region to go to the top of a church steeple and from there to survey all that he or she could see. He or she would then be responsible for all the businesses and finance within that area. It not only provided local autonomy but located responsibility for professional decisions where they might best be made. On the retail side, it should also be noted that in Birmingham there are still 100,000 people who do not have a personal bank account. We should also want to endorse the proposals made within these discussions that the accounts of those who have them should be portable. Portability of accounts might be made possible within the industry so that competition and client service can come together for the benefit of those who use those banks.
I have referred to coherence and comprehensiveness. I wish to add at this stage in the debate, perhaps a little earlier than we need to, the important theme which the Minister mentioned regarding the change of culture around our discussions—in the background and sometimes in the foreground—as we emerge from the immediate scandal and crisis in the industry. As noble Lords will know, there is in the industry a growing understanding of and openness towards discussion at all levels, as well as, dare I say it, a little vulnerability on these matters.
In my own area of the West Midlands, senior regional bankers from all the main banks have been prepared to meet regularly under Chatham House rules to ask difficult questions of themselves and their businesses. It is notable that one major player, which has already been mentioned this afternoon, has added to its obvious corporate values of “Client first” and “We must work together” the extraordinary line that, “We must do what is right”. That gets us into a very interesting area of culture: not just our values, behaviours and mission statements but—I would go so far as to say—what it means to be virtuous. Another global leader, in a seminar held within the past six weeks for all its world-wide risk managers, allowed the whole morning to be spent on the question, “What does society want from us?”. These are little signs of openness to a new culture that will undergo and deliver some of the practical measures that your Lordships will be discussing in the Bill and in response to the commissioners. Our own body, the Church Commissioners, is leading a discussion on what it means to have a good bank, which my friend the most reverend Primate described as living,
“with a culture that is self correcting and self learning, a culture that is more like a body than a system, and so develops the conscience, will and direction that enable the common good”.
As we help develop structures that are fit for purpose, and that might look quite different from what we have been used to, I hope they will become ethical structures. I hope that they will not just keep to easy-to-sign-up-to corporate values but go further into the deeply challenging discussions about personal virtue. Alasdair MacIntyre, the philosopher, would say that we must acknowledge robustly the belief that human life is more precious than any possessions and recognise that human solidarity is an integral part of the common good.
It is time to get back to the detail, which I will leave to the speakers who follow me. I and my colleagues on these Benches trust that the industry will wholeheartedly embrace a professional standards process, with independent leadership and all the practical things that we will talk about in the next few minutes and days; and that step by step—with any necessary amendments to the Bill and a full adoption in the autumn of the parliamentary commission’s recommendations—we will all take responsibility for achieving a healthy, vigorous, profitable and accessible but virtuous banking system.
Queen’s Speech
Lord Bishop of Birmingham Excerpts(11 years, 7 months ago)
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The Lord Bishop of Birmingham
My Lords, I am grateful for what we have heard today of Her Majesty's Government’s aspirations for a stronger economy and a fairer society, because those two are held together at the head of the gracious Speech. We aspire to them ourselves, even as far north as Birmingham.
It is on the holding-together of these two laudable elements and the outworking of their detail that we must focus in the local economy day by day, person by person, job by job. There are, as we have heard, murmurs of good news. Foreign direct investment in greater Birmingham in 2012 rose by 52%, bringing in 2,200 new jobs and more than £174 million of new investment, four-fifths of which was within the sectors targeted by Business Birmingham—they are in some of the exciting areas about which we may hear later: IT, food and drink, life sciences, digital media, professional and financial services and advanced engineering. It was also good to hear about infrastructure developments. I recommend that any of your Lordships who visit Birmingham should do so via New Street station, which is already much improved. The airport runway is also being extended so that we can travel further. In real economics, we need to persuade air carriers to use our regional airports. Connecting up the macro and the micro is significant. High Speed 2 is welcome, particularly when the right compensation deals are agreed. Of course—to bring culture into the argument—Birmingham has one of the finest new libraries in the whole of Europe, to be opened in September this year. Universities are investing and so are hospitals.
Building on this apparent success in the regions is based on a recognition that well resourced employment is at the heart of a stronger economy and a fairer society. I was glad to hear the Minister mention local enterprise partnerships, inspired by the No Stone Unturned report, but I urge clarity on how much money is going to be attached to the now-published strategic growth plans that our region and, I am sure, other regions have, and when it will be forthcoming. It is in the further connecting-up of the macroeconomic and the day-by-day experience of ordinary people that we need to persuade ourselves here in Westminster that it is possible to delegate power and responsibility to talented and enthusiastic workers, businesses and institutions in our regions.
We will see a steady rise in the economy when we see a steady rise in the active participation in the economy of ordinary workers, people who want to use their skills and talents and to engage them in any way that is on offer to them. These macroeconomic policies will be tested on whether people have hope and changed lives in their local areas.
Perhaps I may drill down a little into practical matters. Those of us on this Bench are supposed to stick to principles, but I find that principles are best illustrated by hard decisions, particularly where money is concerned. In the wide-ranging Birmingham social inclusion White Paper, published in March this year and accepted by local businesses and politicians alike, economic policies are seen as being at the heart of changing society, particularly for those who are excluded at the moment. Let me mention just four areas which are of economic interest, and I would be very grateful for a response from the Government.
The first is removing the corrosion of youth unemployment. Birmingham has published, as I am sure have many other regions, commissions and strategies to deal with the appalling waste of young talent coming out from school through their not being able to engage in the economy. I encourage the Government to have even more flexibility in apprenticeship schemes and enabling businesses to take on more than just one person at a time. I recommend proper devolution of the implementation of those schemes through youth contracts to regions such as ours.
The second is the abolition of the spectre of unmanageable debt. That connects with what we have heard already this afternoon to do with banking. I focus on asking the Government to support credit unions even more strongly. That quieter, softer area of the financial world may not produce huge profits but can be profitable and can enable the 9 million people in this country who do not have access to bank accounts to manage their affairs in a way which will enable them to be contributors rather than dependants. But the Government must deal face-to-face with the appalling business of the poverty premium, which means that the poorest people in the country pay the most for the ordinary goods that we take for granted in our houses because they do not have access to finance and have not been able to save.
Thirdly, we have heard and will hear more in this Parliament about the banking system. I am delighted that my noble and most reverend friend the Archbishop is here, but I speak in your Lordships’ House today because he cannot be here tonight, he has church duties to perform. We have heard about the support for small and medium-sized enterprises and the £300 million that has been offered. I urge that to happen quickly in a trustworthy manner so that those employers, who form the majority of the business employers in the country, can have confidence in their ability to take on new workers and to develop their businesses.
Finally, I address local government more directly and the more widespread and long-distance issue, which is fundamentally economic but also social. That is continuing to promote cross-cultural friendship. I hope that your Lordships will forgive me for mentioning this in an economic debate, but it is economic because the Government have been supporting it through a Near Neighbours programme. Although modest in money terms, it has already reached out in our area to 120 projects, spending just under £400,000. The basic requirement is that people of different cultures and faiths meet together to engage in community activity. That underlies a successful and healthy economy—a strong economy, but also a fairer society. I trust that all those commitments will be given forensic attention in the next period.
The phrase that holds together a stronger economy and a fairer society that has been used lately in our debates is social cohesion. Your Lordships will know from your deep knowledge that it was first used by a former Archbishop of Canterbury, William Temple, in his Scott Holland lecture of 1928. In it, he said that all can flourish when, by the exercise of principles of freedom, fellowship and service, faith, family, church, trade and professional associations, businesses and voluntary movements working together can achieve what any nation wants: peace and prosperity. I urge the Government to attend to those details of ordinary lives so that people can immediately participate in a country that may again be one of the greatest in the world. In the words of someone whom William Temple heard just before he died, “Give us the tools in the regions and we will finish the job”.