Queen’s Speech
Lord Deighton Excerpts(10 years, 5 months ago)
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The Commercial Secretary to the Treasury (Lord Deighton) (Con)
My Lords, it is a privilege to open this debate following Her Majesty’s gracious Speech. The measures set out yesterday demonstrate this Government’s commitment to securing the UK’s economic success by creating a stronger, more competitive economy for the longer term. Through the British people’s hard work and the effective policies of this Government, we find ourselves in a far superior economic position than this time last year, when some were expressing concern regarding the prospects for recovery.
No major advanced economy grew faster than the UK over the past year or in the first quarter of this year. Employment is at record levels. Last month’s inflation of 1.8% was below target. We are seeing competition in the supermarkets, which is pushing food prices down. Wages are rising at a similar pace to prices and real take-home pay is increasing. We are completing major infrastructure projects: for example, a dramatically improved King’s Cross station, smart motorways to relieve congestion across the country and, yesterday, a new Queen’s Terminal at Heathrow airport to enhance our international connectivity.
The fiscal challenge facing this Government in 2010 required urgent action. This meant not just committing to reducing the deficit, which is on course to halve this year from that 2010 level, but doing it in a way that gave markets confidence and helped keep interest rates low. The Government’s decision to deliver the majority of consolidation through reduced spending was the only credible option for our country. As a result, the independent Office for Budget Responsibility now predicts that in 2018-19 the UK will have a surplus for the first time in 18 years.
By almost all measures, the performance of the UK employment market is excellent and improving. One way, however, of getting more people into work is by addressing the high cost of childcare. This issue particularly affects women. Even though female participation in the workforce is at an all time high, if we could equalise their labour force participation to that of men the UK could increase growth by 0.5% per year. We are therefore introducing legislation that will further support working families with the cost of childcare. This is beyond the existing £5 billion invested every year in early education and childcare. The Childcare Payments Bill will implement a new tax-free childcare scheme providing up to 1.9 million families with 20% support towards their childcare costs of up to £10,000 per year per child—£2,000 credit per child. This will be available from autumn 2015. This Bill replaces employer-supported childcare with a new, fairer scheme that will be easy to access online, open to working parents irrespective of who they work for, and available, for the first time, to the self-employed.
The quality of a nation’s infrastructure is a key driver of its economic growth. That is why this Government have put investment in transport, energy, telecommunications, flood defences, water, waste and intellectual capital at the heart of our economic strategy. We are making significant progress. Over 2,000 infrastructure projects and improvements have been completed over the past four years. In this financial year alone, over 200 new projects are due to start and another 200 are due to complete, which will directly support over 150,000 jobs in the construction industry. These are part of the £36 billion of investment planned for 2014-15.
These projects form part of our national infrastructure plan, which it is my pleasure to oversee at the Treasury. That plan not only sets out the Government’s decisions about what infrastructure our country needs over the next decade and beyond, it also sets out our strategy for how it will be delivered. It lays out the action that we will take on financing, which builds on both the innovative long-term public funding settlements that we have already announced—£100 billion of capital investment in projects over the next Parliament—and the steps that we have already taken to support private-sector investment, for example through the UK infrastructure guarantee scheme. A significant portion of the UK’s infrastructure investment takes place through corporate financing by our utility companies in the capital markets. This is an extremely efficient way of getting things done because of the confidence that investors, both domestic and international, have in the integrity and independence of our regulation of these sectors. We should hold on to that independence dearly.
The national infrastructure plan also lays out the action that we will take on strengthening planning, where a number of improvements have helped to take planning approvals to a 13-year high. The new specialist planning court for infrastructure, which opened in April, and the additional measures published in the Infrastructure Bill that we have introduced will further streamline the regime for major infrastructure and speed up the discharge of planning conditions. These reforms to planning will further support our efforts to generate a faster, much needed, increase in the housing supply.
In last year’s spending round, the Government committed to the largest programme of roads investment since the 1970s. Between 2010 and 2021, the Government will invest more than £24 billion in our roads. By committing this significant amount of long-term capital and by reforming the Highways Agency so that this capital is deployed efficiently, we intend to address the stop-start cycle of investment previously seen in roads and to ensure that our road network can continue to support the economy and its growth.
On rail, legislation for the first phase of a new north-south high-speed railway is progressing through this Parliament. It is 120 years since we built a mainline railway north of London and it is absolutely imperative that we seize the opportunities that this presents. The new railway complements this Government’s transformational investment in our existing railways. Between 2014 and 2019, Network Rail will spend over £35 billion, continuing a substantial programme of expansion and renewal. We are building the Northern Hub, a programme of rail upgrades across the north of England that will allow up to 700 more trains to run each day and provide space for about 40 million extra passengers a year, and we are delivering an unprecedented programme of electrification across the country.
Passengers on the great western and the east coast main lines will benefit from £6 billion of investment in fast new electric trains, and of course we are transforming rail capacity in the south-east by completing—on time and on budget—Crossrail and Thameslink. That includes rebuilding London Bridge Station, which is being done quite dramatically by keeping it operating at the same time for the benefit of customers. HS2 will connect eight of Britain’s 10 largest cities and more than double capacity on some of our busiest routes. It will directly employ nearly 25,000 people in construction, and the regeneration around stations will support up to 100,000 further jobs. I chaired a task force that examined how to maximise the benefits from this project, and I was persuaded that it can be truly transformational, particularly for our cities in the Midlands and the north, if we approach it strategically and collaboratively so that we capture its full economic potential. I am now working across government to make sure that we do just that.
I was delighted by the overwhelming cross-party support shown for the HS2 phase one Bill during the recent Second Reading debate in the other place, but there remains a long way to go until this legislation receives Royal Assent. I urge Members of both Houses to make this happen quickly, because I believe it is crucial that the scheme’s huge benefits are felt by people and by businesses up and down the country as soon as possible.
Finally on infrastructure, through the reform of the electricity market we have established a framework that will drive investment in energy infrastructure, deliver renewable energy and make sure that we have secure supplies for the future. We have already seen more than £45 billion of investment in electricity infrastructure since 2010. We have agreed the terms for a new nuclear power station at Hinkley Point, the first in a generation. We have set aside more than £1 billion to drive innovation in carbon capture and storage, and that is one of the best offers to develop this technology in the world. We have also increased the share of our electricity that comes from renewables to almost 15% in 2013, up from under 6% at the start of 2010.
It is also important that we get the most from our existing oil and gas reserves in the North Sea. Three months ago the Government accepted Sir Ian Wood’s recommendations on this subject, and we are introducing measures in the Infrastructure Bill to put the principle of maximising economic recovery of petroleum in the UK into statute. Shale gas has significant potential for boosting economic growth and competitiveness, and the Government are creating the most competitive tax regime in Europe to encourage its development, but more still needs to be done. The Government want to put in place the right regulatory framework to support a shale gas industry while ensuring that we protect the environment.
Moving on to local government, we believe that the local enterprise partnerships are best placed to identify local priorities for growth and drive forward local economic development. The Government are currently implementing the recommendations set out by my noble friend Lord Heseltine in his review of UK growth entitled No Stone Unturned in Pursuit of Growth. So far, we have agreed 24 city deals across the country, which have successfully devolved resources to local areas. We are going further. The Government are currently negotiating a growth deal with each of the 39 LEPs that will see them receive a share of the Local Growth Fund, which will total £2 billion in 2015-16 and will be at least £2 billion in each year of the next Parliament. These growth deals demonstrate the Government’s commitment to empowering local areas to take control of the growth agenda in their local economy.
I would like to close my remarks by reviewing how we are making sure that our policies impact people in the fairest way possible. Tax avoidance not only deprives the UK of the money it needs to fund public services, it also undermines public and business confidence in the fairness of our tax system. The National Insurance Contributions Bill includes measures to strengthen the robust stance that this Government are taking in tackling all forms of avoidance. Our approach here is simple: in return for offering a competitive tax system that promotes economic growth, we expect everyone to pay their taxes, and the anti-avoidance measures included in the Bill will reinforce this principle. In addition to tackling those who do not pay their fair share, the Bill will also simplify the collection of national insurance from 5 million self-employed individuals by implementing the self-assessment scheme recommended by the Office of Tax Simplification.
The other main thrust of our fairness policies is quite simply to reduce the tax burden on the millions of working people in the country. In this respect, noble Lords should note that the personal allowance will increase again to £10,500 from April next year, and fuel duty has been frozen until the end of this Parliament. We have helped local authorities to freeze council tax in every year of this Parliament. We are reducing the impact of government policies on energy bills by £50 for average households—a way in which we can sensibly control energy bills. We have also made it easier to save and easier for people to access their pensions. But the best way of getting money into people’s pockets, and the best way of helping them to raise their living standards, is from the jobs and opportunities that are created and sustained by a dynamic, growing economy. I believe that the measures set out by Her Majesty yesterday will achieve this.