UK Withdrawal from the EU and Potential Withdrawal from the Single Market

Debate between Lord Forsyth of Drumlean and Lord Lea of Crondall

Thursday 26th January 2017 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, if ever we needed an illustration of how muddled and in what a mess the Labour Party is on Brexit, one has only to read this Motion, moving:

“That this House takes note of the impact of the united Kingdom’s withdrawal from the European Union and potential withdrawal from the single market”.


“Potential withdrawal”—we are leaving the single market; we are leaving the customs union. The Prime Minister could not have made it more crystal clear. In endless debates during the referendum campaign, representatives from the Liberal Democrat Party, Labour Party and SNP all said that if we leave the European Union, we would not be able to be in the single market. Now they seek to make a distinction.

[Lord Lea of Crondall (Lab)]

Is the noble Lord implying that membership of the single market was part of the referendum question? I do not recall that it was. Now we have the option of a hard Brexit or a soft Brexit, and he is implying that the government decision is a decision that binds Parliament. That cannot be the case, can it?

[Lord Forsyth of Drumlean]

The noble Lord has a particular view on these matters. I do not know what the difference is between a hard Brexit and a soft Brexit; it seems to me that it is the same difference between a hard pregnancy and a soft pregnancy—there is no difference. If the noble Lord does not understand that Brexit means Brexit, perhaps I can put it more simply: leave means leave. That is what people voted for. The single market, as he well knows as a great exponent of the European Union, does not exist in the treaties of the European Union. It is referred to as the internal market. Perhaps the noble Lord could think about how can we be in the internal market if we are outside the European Union? It would then be easier for him to understand what people voted for.

The Labour Party’s confusion is beyond belief. I heard the Opposition spokesperson on foreign affairs, Ms Thornberry, on “Newsnight” the other night. She said that they agree with the Government on lots of things—they want, for example, tariff-free access to the single market. Well, tariff-free access to the single market is the Government’s policy, but if you want tariff-free access to the single market then, by definition, you are not going to be in the single market.

I have one thing in common with the noble Baroness in that I proposed to my wife within eight days of meeting her and we have been together for some 40 years this year. However, the noble Baroness needs to be more decisive on matters which affect the national interest. She is right about the rights of EU citizens living in our country, and that that issue needs to be resolved quickly. The way to do so is to get on with moving Article 50 and persuading our colleagues in the European Union that we need a reciprocal deal—namely, that British people living in the European Union will be able to stay in the European Union, and likewise people who have come here will be able to stay here. Nobody seriously thinks that more than 3 million people will be expelled from this country. Frankly, it is irresponsible for members of the Labour Party to create fear and anxiety among those people while fighting the referendum campaign at the same time as saying through the other side of their mouths that they are committed to implementing the wishes of the British people. I say to my noble friend the Chief Whip that to give us four minutes each to discuss matters of this importance makes a mockery of this House and our ability to hold the Government to account.

I shall say a word or two about the antics of the Scottish nationalists’ behaviour and our embarrassing First Minister. One thing that the Liberals and the SNP have in common is they are crying out for more referendums but at the same time they do not accept the results of referendums when people vote in them. We have gone from the First Minister threatening an immediate referendum to it being possibly an inevitable referendum. As this argument has gone on in Scotland, it is the only part of the United Kingdom which has seen unemployment go up and not down as uncertainty has been created. I suggest that the First Minister sticks to her day job and concentrates on unemployment and the problems in the health service, education and elsewhere, and does not get involved in foreign affairs. She is, after all, the person whose party made Mr Trump an ambassador for Scotland on behalf of business in the global marketplace, then promptly withdrew that while calling on the Government to ban him coming to this country. Therefore, I suggest that her expertise may not lie in that area and she should butt out of this debate.

Trade Union Bill

Debate between Lord Forsyth of Drumlean and Lord Lea of Crondall

Thursday 25th February 2016 Lords Chamber

[Lord Lea of Crondall]

With great respect to the noble Lord, Lord Cormack, I think that many of my colleagues will think that I have made some very pertinent points. I am now on my final two or three sentences.

In the case of the nuclear decommissioning industry, because of the extra difficulty of trying to get to the members—perhaps the noble Lord, Lord Cormack, could pay some attention to this point—they are inhibited further than normal by the fact that nuclear sites are licensed with restricted access. When the noble Lord, Lord Tebbit, finishes his private conversation, he might be interested in this, but he does not tend to listen to what people are saying, and that is not new. Has that extra difficulty been thought out of adding access to people on nuclear sites, which are licensed with restricted access?

There may be agreement that my final sentence is a good point to finish this on. I hope that the Minister will comment separately on this whole exercise of defining parts of the private sector as being in the public sector, as otherwise I can describe it only as the most outlandish idea, which seems to have won first prize—as the daftest one of all—at some well-lubricated jamboree organised by the Young Conservatives equivalent of the Militant Tendency.

[Lord Forsyth of Drumlean (Con)]

My Lords, perhaps I could be allowed a brief intervention—I was not making a particular point about being brief; I mean it will be brief for me. I apologise that I have not been able to take part either at Second Reading or in Committee. The Scotland Bill and the Economic Affairs Finance Bill Sub-Committee have taken me away. I wanted to make a contribution and am sorry that I was not able to in respect of Clause 10, but I support Amendment 92, in the name of the noble Baroness, Lady Wheeler, as it seems to provide a perfectly sensible way forward for the Government.

If we had a Labour Government who brought forward a Bill suggesting that employers should no longer be able to deduct private health insurance payments from people’s salaries, I wonder how we would react on these Benches. We would go absolutely mental. We would say that it was a gross intrusion and a politically motivated thing, which interfered in the relationship between employers and their employees.

The noble Lord, Lord Lea, seemed to think that there was some ideology here. I can probably be identified with ideology in the Conservative Party more closely than most. I am a strong Thatcherite and very much supported my noble friend Lord Tebbit, who is no longer in his place, in his trade union reforms, which have stood the test of time. Those reforms were about ending the closed shop, giving the trade unions back to their members and taking the trade union movement away from the extremist militants within it who had led that movement, with its very proud history, into an abyss. That is what they were about.

Although I understand the main purpose of the Bill is to ensure that minorities do not dominate the decisions of trade unions, and support that core purpose, on both check-off and the question of opting in and out of the political levy I believe the Government are going far too far.

European Union Referendum Bill

Debate between Lord Forsyth of Drumlean and Lord Lea of Crondall

Monday 2nd November 2015 Lords Chamber

[Lord Forsyth of Drumlean]

I was tempted to support the amendment of the noble Lord, Lord Kerr. As I listened to his speech, he said, “The Commission is there to maintain the EU decision-making autonomy”. What a ghastly phrase. It suggests that an unelected body has autonomy. The noble Lord, Lord Liddle, said that the speech of the noble Lord, Lord Kerr, should be circulated as part of the campaign. I agree with that because in summary he said, “Look, we’re stuck with this organisation. They’re in charge. If you try to do anything about it, they’ll all gang up against you and throw your people out of work”. If that is the best argument that we can come up with for staying in this organisation, I despair. If that is the position, the sooner we get out the better, because we are being told that we are part of an EU decision-making autonomy.

[Lord Lea of Crondall (Lab)]

Taking the analogy of Ministers and the UK Civil Service, is the noble Lord saying that if you do not like the word “autonomy” there must be some other word that is not going to be suborned by politicians? With regard to the Office for Budget Responsibility, no one doubts that we are looking for some degree of independence. If the noble Lord does not like the word “autonomy”, how will he handle the problem of not wanting self-interested politicians to give advice—it is people who, in the analogy with Britain, are not politicians?

[Lord Forsyth of Drumlean]

The noble Lord must go on because he is making my case for me. He is saying that we do not want politicians and that we need to think of another word for “autonomy”. How about “dictatorship”? If by EU decision-making autonomy you mean, “We don’t want politicians”, then that is dictatorship. Politicians, however much they may be despised or disliked, are accountable to the electorate. These people are accountable to no one, and we are now being told that we cannot possibly go against the EU decision-making autonomy.

European Union Referendum Bill

Debate between Lord Forsyth of Drumlean and Lord Lea of Crondall

Monday 2nd November 2015 Lords Chamber

[Lord Forsyth of Drumlean]

I am most grateful to the noble Lord for that intervention. The amendment refers to the,

“report on the effect of the United Kingdom economy of withdrawal from the European Union”.

In order to do that one would need to take a view on what is going to happen to the euro and if there is someone in the Office for Budget Responsibility who knows the answer to that question, I have to tell them they could be a billionaire tomorrow.

Of course no one knows what is going to happen to the euro. I agree the probability is that it is not going to survive unless there is very substantial further integration within the European Union but no one knows to what extent that will be possible. For example one can look at the attitudes towards the problem of mass economic migration into the European Union and the chaos which the members of the European Union are in at the moment and their inability to agree. Does anyone in the Office for Budget Responsibility know how to predict the outcome of that matter?

The noble Lord, Lord Kerr, is expert at dealing with the European Union. I can remember as a Minister arriving at meetings and he had already prepared the compromise that we would accept and the press release which announced a great victory by Ministers over the European Union to be released before we had even got off the plane. I know that he believes very much in the opportunities for flexibility in matters of wording but the wording on this amendment is asking the Office for Budget Responsibility to do the impossible—to tell the future. In so doing they will almost certainly get it wrong, like the Bank of England and everyone else who tries to tell the future, and that will damage their constitution.

[Lord Lea of Crondall (Lab)]

The bear trap metaphor is getting in the way of the thread of the noble Lord’s own logic. He has got lost in trying to demonstrate that this is either a job that no one should do or it is a job that should possibly be done, but not by the Office for Budget Responsibility. If it is the former, is it not the case that many people in the debate about the referendum are desperate for some sort of guidance on the two scenarios? Indeed the governor’s speech and what happened last week in Iceland are very relevant. Is the noble Lord saying that no one should do this job to the best of their ability, however difficult, or simply that the Office for Budget Responsibility should not do it?

[Lord Forsyth of Drumlean]

I am saying that the Office for Budget Responsibility should not do it and I am saying that the point made half an hour ago by my noble friend Lord Flight is absolutely right. These are matters of judgment, and the people who should make the arguments are the people who are on either side of the campaigns. It seems to me, listening to arguments from the noble Lord and from others on his side, that they have got quite a lot of work to do if they are going to persuade the British people to vote to stay in the European Union. Whether or not staying in the European Union is in the best interests of our economy is a matter of judgment. Even in Greece it would appear that a majority of the voters still think that it is in their interests to be in the European Union and within the eurozone. I am very happy to leave that to the judgment of the British people in the referendum.

--- Later in debate ---

[Lord Lea of Crondall]

The last 15 minutes have been very illuminating. We now have the position where the noble Lord, Lord Forsyth, has concluded that we do not want any attempt to have this independent assessment because it is up to the two sides to fight it out as if we were in Madison Square Garden. I will quote him many times in the future on that basis. These people do not want any independent analysis—they just want a shouting match to see who can shout the loudest. That is exactly what he said, and that is my first point.

[Lord Forsyth of Drumlean]

It is not what I said at all. I said that whether we stay or leave is a matter of judgment and opinion. The idea that the Office for Budget Responsibility can intervene in this matter is not sensible. In fact, it would be difficult for the Government, because I very much hope that at the end of the day collective responsibility will be suspended and that members of the Government will be able to campaign according to their own judgment. Therefore the idea that the Government or anyone else could produce an independent report is fantasy. Of course people must have the facts; I hope very much that people on both sides of the campaign will resist the kind of scaremongering which we have heard from people like the noble Lord—yes, indeed—who support that particular side of the argument. We have heard that 3 million jobs will be lost and other scare stories, which will simply turn off the voters. However, I do not believe that it is impossible for those on both sides of this argument to honestly put out arguments and facts and let the people decide.

[Lord Lea of Crondall]

It is quite often possible to summarise the general opinion of politics in this country, as a default position, as: “They just shout at each other and they don’t try to find the truth in the public interest”. This will be an historic decision for Britain, and the idea that we will not do our best to find any independent ground to give to the British people is quite extraordinary.

I was the person who, at Second Reading, first made this proposal and started this hare, or bear, running. That was done to meet the argument put forward by noble Lords such as the noble Lord, Lord Forsyth, that we must find out what the consequences would be of being out, because they on their side—and it is true that I am on one side, just as the noble Lord, Lord Forsyth, is on the other side—were saying that there will be absolutely no problem with being out, without any of the downsides; for example, that we will have all the benefits of EFTA. Of course, this weekend we now hear from the Prime Ministers of Norway, Sweden, Iceland, Greenland, the Faroe Islands and wherever that this is not the case. We have now got into the position where, this bear trap or whatever it is having been opened up, the noble Lord seems to be running away from the argument that his side started about a month ago, which is very interesting.

The only other way in which I guess we could have an independent analysis without it being done by the Office for Budget Responsibility would be to set up some new academic/ex-Whitehall or Civil Service commission, or something like that. It would not be easy to get agreement—as I think the noble Lord, Lord Turnbull, said at the beginning—in that rather heated atmosphere on what such a body should be like. I do not think that the noble Lord, Lord Forsyth, has doubted that the credentials of the OBR as regards its degree of dispassionate analysis could be bettered. It now has a reputation, with some ex-Treasury officials in it, as a body which does not kowtow to the Treasury, which some people feared. However, it established its own independence and credibility at the same time, not like a parliamentary Select Committee with an eye for newspaper headlines wanting to find something extravagantly newsworthy to say. This is therefore about as good an attempt as will be made.

Finally, we do hear a red herring from time to time, which is of course that after the referendum, if it leads to exit, another negotiation would follow whereby tariffs would not go up against Britain, and that otherwise they would. All these existing problems would suddenly be revealed for analysis when we are out, not before we are out—before we have voted—but when we are going to go out they would have another negotiation. That particular fox, to change the animal metaphor, has been shot dead three times, and I should think it is pretty dead now.

Charities (Protection and Social Investment) Bill [HL]

Debate between Lord Forsyth of Drumlean and Lord Lea of Crondall

Monday 20th July 2015 Lords Chamber

[Lord Lea of Crondall]

The Minister has totally misunderstood the purport of my question, which I will repeat. It is clear that the dividing line about what is political has nothing to do with support for a political party. What the Minister just said is a red herring. Of course, things can be ruled out for direct or indirect support for the Labour Party or the Conservative Party. My point was this. That is not in practice the dividing line drawn by the commission, where party political support is ruled out and other matters are ruled in.

[Lord Forsyth of Drumlean (Con)]

Oh!

[Lord Lea of Crondall]

I would like, on the second time of asking, with the permission of the noble Lord, Lord Forsyth—from a sedentary position if you please—to have an answer to the question that I posed in Committee that was not answered and I now repeat.

Liaison Committee

Debate between Lord Forsyth of Drumlean and Lord Lea of Crondall

Thursday 12th March 2015 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, I served on the Committee on Soft Power, which was so brilliantly chaired by my noble friend, on the understanding that it would be used as a kind of test for whether or not we would go ahead and have a proper committee on foreign affairs, as my noble friend has suggested. In the debate on the committee’s report it was perfectly apparent that our committee was able to range across a whole range of issues to do with international and foreign affairs, and almost everyone in the debate pointed towards the need for an international affairs committee of this kind.

I say to my noble friend that, although it is true that this House has a tremendous reputation for the work done by its European affairs committees, there is a world beyond Europe. One of the points which came out of the report from the Select Committee was how important it was that we engage with that world beyond Europe—not just the Commonwealth but also Asia and the rest. It was clear from listening to the contributions made in that debate that there is fantastic experience in this House which should be put to good use, which will not conflict in any way with the House of Commons.

If the Chairman of Committees is going to say that it is all to do with resources—he is shaking his head. I am glad to see that resources are not a problem. If it is not about resources, what is the point of having a House with this expertise which is not able to look at the issues at a time of huge international tensions and when people around the country are increasingly concerned? I think that the other place would benefit from the expertise and contribution.

I hope the Chairman of Committees will suggest to the Liaison Committee that we should have an early opportunity for this House to decide. My noble friend Lord Jopling asked who is in charge. This House is in charge, and this House should get an opportunity to vote on the issue of whether or not we should have such a committee.

[Lord Lea of Crondall (Lab)]

My Lords, what is the procedure for allowing this House the opportunity to elect the members of the Liaison Committee and other committees? It is deemed quite reasonable in most legislatures round Europe.

Queen’s Speech

Debate between Lord Forsyth of Drumlean and Lord Lea of Crondall

Monday 13th May 2013 Lords Chamber

[Lord Lea of Crondall]

My Lords, as the first speaker from these Benches following the outstanding maiden speech of the noble Baroness, Lady Lane-Fox of Soho, I add that, as someone who has always been in difficulty in working my computer, let alone shopping online, I stand in awe of anyone in that line of business. Perhaps I can get some private tuition.

I welcome the role that the Bishops are taking on as the only territorial representatives in this House, as well as now having the financial expertise of the most reverend Primate the Archbishop of Canterbury, in both cases indicating a relationship to real people in real communities.

I wish also to refer to the highly political 16-minute speech of the noble Lord, Lord Forsyth. No attempt was made by the Whips on the government Benches to remind him that eight minutes had been advised. It was a 16-minute speech, and I trust that the government Chief Whip will now confirm that we can all have 16 minutes, especially in our case, as my noble friend Lord Bhattacharyya seems to have disappeared.

[Lord Forsyth of Drumlean]

My Lords, I am most grateful to the noble Lord. I think that I was interrupted, and also no time limit has been specified for this debate.

[Lord Lea of Crondall]

There is an advisory limit of eight minutes. I inquired and that was stated. I do not know whether anyone would like to confirm that that is the case.

Growth and Infrastructure Bill

Debate between Lord Forsyth of Drumlean and Lord Lea of Crondall

Wednesday 20th March 2013 Lords Chamber

[The Earl of Erroll]

Even better. Passing it does not matter then, but at least it would send the right signal and some people may relax. If, as the noble Lord says, it will not change the unfair dismissals process, we can all proceed happy that that continues. Why object? At the moment, I know that the law is biased in favour of the employee, not the other way round. With that, I will sit down. I would love to see other things tried. At the SME end, we need signals sent by the Government, and this is one.

[Lord Lea of Crondall]

My Lords, I think that it is fair to say that the noble Lord, Lord King of Bridgwater, has some of the best political antennae in the business. I therefore think that we can look forward with some interest to the response of the noble Viscount, Lord Younger of Leckie. In debate in Committee, precisely the proposition made by the noble Lord, Lord King—that in effect people could say, “You can only get this job if you sign up to the scheme”—was made. The Minister said:

“I have not seen the guidance”—

the 3,000-page guidance—

“but I do not believe that it will say that”.—[Official Report, 6/2/13; col. 289.]

Two questions arise. First, can the Minister tell us definitively this afternoon, before we vote, whether the noble Lords, Lord King of Bridgwater and Lord Pannick, are correct or incorrect: yes or no? I will not detain the House, but what baffles me, picking up the point made by the right reverend Prelate the Bishop of Bristol, is how on earth the Government got the idea that this was convincingly presentable as part of the moral platform for modernising capitalism. As I think that the right reverend Prelate said, straight out of the Bible we have the precept, which is probably in the Koran as well, that you do not sell your birthright for a mess of pottage—that was Esau, I recall. Let me dub this Esau’s clause. It is incumbent on the Minister to give us a brief reply on that question.

[Lord Forsyth of Drumlean]

My Lords, I think that this is a positively dreadful clause. Perhaps I should declare three interests as a former Minister of Employment, as chairman of a start-up run by my daughter and as someone who has set up a number of businesses in the past. I could not believe the clause when I read it. It seemed to involve two really good things. I have much sympathy with what the noble Earl had to say about the burdens placed on businesses and the costs of going to an employment tribunal, but that is an argument about the extent to which employment protection legislation should apply and the costs associated with sorting out whether there has been an injustice to employees.

Employee share ownership is a very desirable thing up to a point. It can go too far if your salary and your savings are tied up in the shares of the company that is your employer but, as a general principle, giving people a stake or encouraging people to take a stake in the business is part of being a good and successful employer. I very much agree with what my noble friend Lady Brinton had to say about creating a culture in a company where people can feel part of a team and motivated. The idea in this clause has all the trappings of something that was thought up by someone in the bath, taking these two ideas together and believing that they made for a great scheme. In fact, it is damaging to both. I do not propose to reiterate the careful and precise arguments that the noble Lord, Lord Pannick, made in moving this amendment, which I support and which I will vote for if he chooses to divide the House on it.

Economy: Growth

Debate between Lord Forsyth of Drumlean and Lord Lea of Crondall

Tuesday 29th January 2013 Lords Chamber

[Lord Forsyth of Drumlean]

My Lords, it is a pleasure to follow the noble Lord, Lord Mitchell. I just wonder whether he is a little overenthusiastic in his belief in the Government’s ability to pick winners, especially in the IT sector. As I recall, billions were lost in the health service and elsewhere through IT projects that were not properly sourced and not subject to the disciplines of the marketplace—projects that arise from people spending other people’s money. It is also a great pleasure to welcome the noble Lord, Lord Deighton, to the Front Bench.

I have been surprised that, so far in the debate, people have concentrated on the deficit rather than the debt. The noble Lord’s predecessor, the noble Lord, Lord Sassoon—whom we miss so much—was subject to regular questioning from me, asking why we continue to refer to reducing the deficit and not the debt, when, of course, the deficit is simply the rate at which the debt is increasing. I never got a satisfactory answer to that. Therefore I ask the noble Lord, in briefing himself into his department, to look at the ComRes ITV poll that was carried out just before Christmas—which may have got lost in the tinsel and bright lights of the Christmas period—where people were asked whether they thought that over the course of this Parliament the Government were going to increase the debt by £600 billion, reduce it by £600 billion, or leave it much as it is. Only 6% got the right answer, which is that the debt will increase by £600 billion. I regard that as a really serious problem, because if you are asking people in the country to make sacrifices and to realise that Governments face difficult choices, first you have to make them aware of the extent of the problem. I really do not think it helps for politicians—from whichever party—to shy away from explaining just how serious a problem we have.

The problem, in short, is that the state is growing and the economy is shrinking. The latest OECD figures show that state spending has now gone up to 49% of our GDP. That is an extraordinary amount. I used to define communist or socialist states as states where the Government spent 50% of the GDP. In the year 2000, when Gordon Brown was Chancellor of the Exchequer, the Government spent 37% of GDP. I am sorry that the noble Lord who said that it is ridiculous to talk about a massive Keynesian boom is not in his place, because I must point out that there has been an astronomical increase in the share of our GDP that is being spent by the Government. Out there in the country, real wages and living standards are falling. The first thing that we have to explain is that we have been living beyond our means. We have been spending about 10% more than we earn and we have been saving nothing. We need to save about 10%. Now 10 plus 10 is 20%, so to put that right, living standards are going to fall by 20% unless we can get growth. It should come as no surprise that this has come about.

The national debt is now 70% and rising. It rose by £15 billion last month alone. I know that we are all supposed to take the line that the Chancellor has cut the deficit by 25%, but the truth is that he met the target last year only by putting in Billy Bunter's postal order, which is the £3.5 billion that will come from the 4G spectrum sale—money that we do not have now and will come around only once—and by throwing in the proceeds from the interest on the bonds that have been purchased by the Bank of England printing money.

We are engaged in a completely new scheme of quantitative easing, which has been done on a stupendous scale. We are now relying on the interest on that money that we have created to say that we are closing the debt cycle. I am profoundly concerned by that. Every time I ask an economist or someone I respect about this, I find it very difficult to get the kind of reassurance to which the country is entitled.

On the Government's policy, if you ask a Minister what they think will happen to the growth in the economy in the next 12 months, they will say, “We are not responsible for that. We have an independent body called the OBR”. But the OBR has been consistently wrong in all its forecasts. My noble friend Lord Lamont said quite rightly that all forecasters are consistently wrong. But it is worrying to say the least that this independent body that Ministers now rely on has been so far off the mark.

The truth is that the Government are stuck in a Bermuda Triangle. We have low growth, which means that the Government cannot make cuts in spending, and we have high spending, which is preventing us from getting the growth that we need. People may have forgotten this, but much is due to the efforts that were made by my noble friends Lord Lamont and Lord Baker, my noble and learned friend Lord Howe and others in the 1980s in making supply-side reforms and changes to the trade union law; the changes to our labour market policies. That is why employment has not gone up in this dreadful recession. Workers are now able to make arrangements with their employers to be flexible in the teeth of economic adversity.

The Government have made some mistakes, and we should admit to those mistakes. The noble Lord, Lord Eatwell, sent me a note to say that he had to leave the Chamber so I know that he will read this in Hansard, but it was sheer bare-faced cheek for him to argue for capital expenditure, which is right, and against the Government’s capital expenditure cuts, when the mistake that the Government made was to implement Alistair Darling's cuts in capital expenditure but actually reduce what was planned by Alistair Darling. The point is well made. Capital spending is required and we need further supply-side changes.

My noble friend Lord Wolfson made the key point in this debate. You have to look at the return on the money, and, on the whole, Governments are not very good at picking winners. Therefore, to choose a well-known liberal's favourite phrase, if you leave the money in the pockets of the people to fructify, you will get far more growth and far more for your money than if it is decided by committees in Whitehall with one eye to the next election. An example of that is this high-speed train. The high-speed train is the ideal political project. It is absolutely fantastic. It enables a Government to say that they are spending a large amount on infrastructure. It has a visionary appeal about it. And, of course, the planning, the implementation and the execution are so far ahead, you do not have to spend a single penny on it. In doing so, it creates all kinds of difficulties for the local economy and the blighting of property and so on. I would rather see the money being spent now on improving our transport structure and looking, as my noble friend Lord Wolfson said, at issues like road pricing and others that will help to make the changes necessary to get our economy to grow.

Again and again we hear complaints from both sides of this House about the banks not lending money to small businesses. I want to ask my noble friend, who I know has a background in banking and will be turning a fresh eye to this matter: how are the banks supposed to lend money to small businesses when at the same time they are being asked to increase the amount of capital that they have in order to support the lending that they have got? How are the banks supposed to find the money to lend to new businesses when they are being asked at the same time not to foreclose on mortgages and to try and keep businesses going? How are the banks supposed to find the money when there are companies—many of them now—substantial public companies, zombie companies, that are simply kept alive by low interest rates and by the banks not wishing to consolidate the loans on their balance sheets.

Of course, we are very conscious of the banking crisis and the impact that it had on our economy, but are we now not in danger of fighting the last war? Should we not be adopting a counter-cyclical approach to the capital requirements on banks in order to solve the problem? Frankly, producing lots of government schemes is not the answer. Better to have banks making commercial decisions with the balance sheet flexibility to be able to lend to these small businesses. This was a point that my noble friend Lord Lamont touched upon in his excellent speech.

How are the banks supposed to operate when the regulators, as a regulatory requirement, are requiring them to take Government gilts? We all know what is going to happen to Government gilts as the interest rates go up and quantitative easing unwinds. What is going to happen then to the losses being made as a result?

The reason that we are becalmed as a country is because the tax burden has become unbearably high. I am not here making a plea on behalf of people who pay high marginal rates of tax. If you earn between £8,105 and £42,475, taking the income tax and the national insurance payments that you and your employer has to pay, it is no less than 40.25% of earnings. Is it any wonder that we see so many part-time jobs, not full-time jobs? The costs of labour are unbearably high because of the burden of taxation.

For those on the other side who say it is all about tax dodgers and finding rich people, the top 1% of taxpayers now provide 24% of all the income tax but only 10.8% of the income. That is why the tax burden is now hitting people on low incomes and hitting them hard.

Indeed, I had the pleasure of chairing the tax commission for the Chancellor while we were in opposition. I remember that we agreed that we needed lower, fairer, flatter, simpler taxes. What are we doing? According to the TaxPayers’ Alliance—an excellent body—we have created 299 separate tax increases and 119 reductions. Whatever happened to that great crusade to have a simpler, flatter, fairer tax system? I tell you this: if we do that, the revenues will go up and the deficit will go down.

I welcome the rise in thresholds. The Liberals claim the credit as their policy. I see my noble friend is nodding with enthusiasm. I refer him to the speeches made while we were on the Benches opposite by the noble Lord, Lord Saatchi. It was also one of our recommendations in the tax commission report in 2006. My cautious right honourable friend the Chancellor felt that our programme of tax changes, which would have amounted to £25 billion, was more than could possibly be afforded in a Parliament where borrowing now goes up by £15 billion every month.

On quantitative easing, I would like my noble friend to explain exactly how it will be unwound. The Bank of England made gains on the gilts which have been bought through this process of about £60 billion a year ago. What is the value today? What will happen when interest rates go up? How will that gap be closed?

My noble friend Lord Wolfson is a grand and successful retailer and I echo what he said about planning. Perhaps the House will allow me one indulgence. My eldest daughter has just started her own business and opened a shop on the King’s Road in the worst possible circumstances of recession. Kensington and Chelsea is a Tory council but it took eight weeks to give her planning permission to put her name above the door—eight weeks while she was unable to trade and while it charged her rates for the privilege of waiting on it to give planning permission. It should be utterly impossible to operate in this way in the difficult circumstances that we have in the marketplace now. We have heard from my noble friend Lord Wolfson of the experiences of big businesses. At least he will have some clever people in his department who will be able to take on the planners. If you are setting up your own business, there is only you. In all the speeches we make about deregulation and supply side reforms, let us get down to the detail that is preventing businesses expanding and growing.

I have said that the economy appears to be becalmed. If you are becalmed, you need a wind of change, and that will come from reducing costs to businesses and reducing costly regulation. I have some sympathy with what the noble Lord said about reducing the cost of national insurance. We should stop thinking of new schemes that make life more difficult for business, such as changing the rules on paternity leave or introducing 1% pension schemes. I read in today’s Times that all businesses are to be asked to produce information on the ethnicity of their employees when they want to be out there selling to customers and winning exports.

What is going on in this country when, since 2008, our currency has been depreciating and our exports have gone up by 1% while exports in Germany, France and Holland have gone up by 9%? What is going on? Why are we not more successful in our export efforts?

On energy costs, what are we thinking of? By adding to the cost of energy on business, all we are doing is importing carbon from China, and China is lending the money to enable us to run a deficit while our businesses are disadvantaged as a result.

[Lord Lea of Crondall]

The noble Lord mentioned that we are devaluing the pound but nothing is happening. Why is that? Does he think that devaluation no longer works?

[Lord Forsyth of Drumlean]

I have been saying for the past 15 minutes that we need to create an environment in which our businesses can go out and sell and are encouraged to do so. I was not making a particular point about devaluation: I was saying that we are more competitive as a result of the falling value of the pound relative to other currencies.

To conclude, my advice to my noble friend is to say to his right honourable friend the Chancellor of the Exchequer that no U-turn is necessary but a touch on the tiller is required.