Economic Prosperity and Employment
Debate between Lord Haskel and Baroness Garden of Frognal(11 years, 5 months ago)
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Lord Haskel
That this House takes note of the role of government in generating economic prosperity and employment.
Baroness Garden of Frognal
My Lords, the timing for the next debate is very tight indeed. Could I encourage all noble Lords to keep within their time limit, in order to enable the noble Lord, Lord Haskel, to have a few minutes to respond at the end of the debate?
Apprenticeships
Debate between Lord Haskel and Baroness Garden of Frognal(11 years, 9 months ago)
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Baroness Garden of Frognal
I welcome the comments of the noble Lord, who I am sure like me remembers the days when there were many practical routes into all these professions and trades—routes that over the years have become graduate-only. We in no way wish to downplay the value of degrees, but an important step in raising the profile and breadth of apprenticeships will be taken if they can be linked to the status and standing that these sorts of professions have. It is definitely something that we are encouraging. We have not set any targets yet, and again I come back to the fact that this is a consultation period. However, we have been in discussions with the different professional areas. At the moment we have a total of 27 projects and two trailblazers, which will provide more than 25,000 higher apprenticeship places over the next three years. Those higher apprenticeships are going to be available in the very areas we are discussing. People are embarking on apprenticeships in a much wider range of professional and work areas than those that are traditionally associated with them.
Lord Haskel
My Lords, following on from the point made by the noble Lord, Lord Cormack, about heritage, the impression was given that this was really quite a small affair. It is not. This is a business that has a turnover of over £5 billion and is growing. I urge the Minister to make sure that we try to support every growing sector of the economy. This is a growing sector, and apprenticeships here are important to grow the economy as well as for the tourist industry and the other things that she mentioned.
Baroness Garden of Frognal
I apologise if I gave the impression that the heritage industry was small. I was trying to make the point that many of the component parts of it are very small. The noble Lord is absolutely right that it is a very important part of tradition and, of course, of the tourist industry, to which it makes a great contribution. However, it is much more important than that, too: it includes a very diverse range of skill and work areas and it is vital that we do not lose sight of these.
Olympic Games: British Companies
Debate between Lord Haskel and Baroness Garden of Frognal
Lord Haskel
To ask Her Majesty’s Government why British companies which have supplied innovative products to the London Olympic Games and Paralympics Games are unable to publicise those products in order to gain further business.
Baroness Garden of Frognal
My Lords, as suppliers are paid the full commercial rate for their goods and services and are bound by the no-marketing rights clauses in their contracts, sponsors who have collectively raised in excess of £1 billion towards staging the Games are granted exclusivity for marketing rights. As the Written Ministerial Statement that I made on 1 May clarified, businesses can state their contribution to the Games in various contexts, including client lists, pitch documents and informal business contexts.
Lord Haskel
My Lords, I apologise for raising this matter with your Lordships again today but the matter is urgent. Does the Minister recall that the companies that I spoke about yesterday have no wish to use the logo or the Olympic rings or to do anything that contravenes the branding guidelines? All they want to do is use the Olympics as a shop window for the products and materials that they have supplied to go out and get further orders from other countries—orders that Ministers are urging them to get. Will the Government now persuade LOCOG to lift its ban immediately so that they can get on with it—yes or no?
Baroness Garden of Frognal
My Lords, it is not for the Government to persuade LOCOG to lift the ban because these firms will have signed a contractual arrangement when they made the contract with LOCOG in the first place. Of course they can promote their wares as long as they are within the context of the terms of the contract. As the noble Lord says, we have to ensure that they cannot promote their involvement in the Games in a way that undermines the exclusive marketing rights of the London 2012 sponsors. However, there are many other occasions and ways in which the Games will provide a focus for the very businesses that he wishes to support.
Olympic and Paralympic Games 2012
Debate between Lord Haskel and Baroness Garden of Frognal
Baroness Garden of Frognal
My Lords, I thank noble Lords very much for their contributions to this debate. One of the wonders of a debate such as this in your Lordships’ House is that many, if not all, of the questions that Members have asked seemed to have been answered by those with far more expertise in the various subjects than I have, but I will do my best to pick up the questions as they came up.
The noble Lord, Lord Haskel, asked about suppliers. The answer from my noble friend Lord Moynihan has gone some way to respond to his queries, if not to satisfy him. The contracts for suppliers permit specific mention of their involvement with the Olympic and Paralympic Games in particular cases, but it is for the major sponsors to have exclusivity over rights, because without those we would not be able to put on the Games as we wished. I acknowledge that his story about a flaming torch breakfast seems to be taking these things somewhat to extremes. However, who are we to say what the context is and where you draw the line on these? We feel that sponsors’ rights have to be protected, which is of course an obligation under the terms of the agreement with the International Olympic Committee, both because of that and against ambush marketing. That is quite a comprehensive sector, which we debated when it came through earlier in your Lordships’ House and when we passed the instrument to say that it should go through.
My noble friend Lord Addington talked about the protection of the Olympic brand and the real importance of learning lessons from what has gone right and what has not gone quite so smoothly in these Games, from which we will quite certainly take away a number of lessons. It is not that we are likely to host the Olympics and Paralympics in the UK again for a great many years to come, but all these lessons go back to the Olympic family as a whole to make sure that all Games learn from previous ones.
One or two noble Lords mentioned the matter of tickets. There was an unprecedented demand for tickets, which had never happened in previous Games. The systems that LOCOG set up would have coped if the interest had been as the media predicted in fairly cynical terms. It has obviously been a disappointment for those who did not get tickets, although they have been coming back on sale. I have already heard a number of stories of people who were not successful the first time around but who now have tickets. We hope that that position continues to improve. I enjoyed the intervention by my noble friend Lord Grade. I suppose we can only be grateful that the Prime Minister of the day was convinced that the bid should go ahead.
My noble friend Lord Higgins spoke of his Olympic experiences, and my goodness it seems a different day. I noticed that “Chariots of Fire” is currently on my local theatre and I am about to go for a nostalgic review of that. However, the Olympics of the 1940s were run and competed in a very different mode from the Olympics of today. The big change from amateur to professional has been one key difference. He raised the matter of drugs, a matter which my noble friend Lord Moynihan also took up. We should confirm the very tough line that is being taken on drugs here, because undoubtedly sports and sportspeople suffer tremendously if drugs become permitted, whatever the sport.
My noble friend asked what happens if people arrived with tickets that they cannot use. I do not currently have an answer to that scenario. I know that we have already discussed whether people could use tickets if their names were not on them. The response was that the person who bought the tickets has overall responsibility for them, but obviously they may be used by those who do not appear on the named tickets.
As for protestors, everyone has the right to protest and nothing that is being planned for the Games will curtail the right to legitimate peaceful protest, but that does not extend to disrupting the Games or their preparations. We certainly do not want to undermine years of dedicated training by those competing, or ruin the enjoyment of fans who have paid to see their sporting heroes in action, so we expect that the response to protests will be proportionate.
My noble friend Lord Higgins also mentioned the legacy of the athletics stadium. We are of course encouraged to know that the athletics legacy will certainly continue until 2017, because the stadium will be used when we host the world athletics championships there.
The noble Baroness, Lady Ford, spoke about the legacy. I join other noble Lords in paying warm tribute to the work that she has done to ensure that the Olympic park is indeed a real credit to the country once it has completed its sporting time during the Olympic and Paralympics. She mentioned the importance of not pricing local people out of access or homes. My noble friend Lady Doocey also brought up concerns about local people being excluded from those. Considerable steps are being taken to ensure that the number of affordable homes in the Olympic park remains high. We hope that it will not become the preserve of the rich, because assurances are in place that local people will have their say. We congratulate the noble Baroness on what she has done and are sure that we have not seen the last of her in connection with Olympic matters, but she may act in a more personal capacity in future. We welcome Daniel Moylan, who will be carrying the torch in the post that the noble Baroness has vacated.
My noble friend Lord Bates lived up to expectations by talking warmly about the Olympic Truce being the point of the ancient Games and the torch relay heralding the fellowship and peace of the truce. The Foreign and Commonwealth Office is leading on this and we will certainly seek to work with parliamentarians and bodies such as the Inter-Parliamentary Union, the Westminster Foundation for Democracy, the Commonwealth and others to ensure that through an active public diplomacy programme we have an opportunity to increase international public interest and involvement in conflict prevention and peacebuilding and to raise the level of ambition for future Olympic Truces. My noble friend has done an enormous amount to put the Olympic Truce high on the agenda of the Games.
I compliment the noble Lord, Lord Davies of Oldham, on all the work that he did in the previous Administration to ensure the success of the Olympics and Paralympics, and I was pleased to see him reflecting optimism in his speech. He raised concerns about faith issues, which I know my noble friend Lord James shares. Four years ago, LOCOG set up a faith reference group that includes the nine faiths recognised by the IOC: Muslim, Christian, Jewish, Buddhist, Jain, Sikh, Hindu, Baha’i and Zoroastrian. This group has looked at all aspects of the plans, including the multifaith centres, prayer spaces, food provision, uniform design, quiet areas and accommodation, not only for athletes but for the workforce, volunteers, media and spectators, where appropriate.
We are conscious that with the Games taking place during Ramadan and on the 40th anniversary of the Munich attacks this multifaith approach has been crucial. LOCOG’s faith adviser, the Reverend Canon Duncan Green, who was appointed by the Archbishop of Canterbury, has led this work, but LOCOG has also worked closely with the Muslim Council of Britain and its general-secretary Dr Muhammad Bari, so I hope noble Lords are reassured on this issue. It has been taken extremely seriously, and I assure the noble Lord, Lord Davies, and other noble Lords that considerable efforts have been made by LOCOG to ensure that the needs of faith communities have been addressed appropriately and respectfully.
The noble Lord, Lord Davies, and the noble Baroness, Lady Billingham, mentioned Heathrow, which has been overmuch in the news recently with its possible inability to cope. The UK Border Force, BAA, LOCOG and other partners are working very closely together to ensure that visitors have a good experience at the airport and a warm welcome to the UK. We recognise that there is some way to go in ensuring that that is the case for everyone who comes here. Additional resources will be deployed by the UK Border Force to reduce queues to a minimum. BAA is providing a temporary terminal for the athletes’ departure, which will be one of Heathrow’s busiest days, and putting improved services in place to help Paralympic teams, which should provide a real legacy for disabled visitors afterwards. We are conscious of the need for cross-departmental conversations and discussions on this. The Home Office is quite naturally concerned that levels of security should be high for the period of the Olympic and Paralympic Games but is also conscious that visitors must be given a warm welcome to our country.
My noble friend Lady Doocey has done an enormous amount to contribute to the Games. I think particularly of the work that she has done on carers and on ensuring that people who need someone to come with them to the Games should be accompanied. She paid tribute to the security staff. I agree that we are in the best possible hands. The people working on security for us have worked enormously hard to try to ensure that all goes well.
My noble friend Lady Doocey mentioned transport, as did other noble Lords. We certainly hope that our lanes do not become Zil lanes. We are keeping the lanes that are reserved for the Olympic family to a minimum, and taking every possible care so that London can go about its normal business as far as possible.
My noble friend also raised concerns about tickets for officials. I was interested to hear the noble Lord, Lord Graham, talk about the hard work of local councils around the Games. I am conscious that there are allocated tickets for officials. However, the Government have kept their allocation to fewer tickets than they were entitled to. On affordability, 2.5 million tickets were priced at £20 or less. There were special prices for tickets for more than 220 sessions. Getting the balance right between having the right level of hosting and people to support the Games and making sure that the vast majority of the tickets were on sale to the general public has been striven for. By and large, LOCOG has got the appropriate balance. I think 8.8 million tickets were on sale. It is an enormous number. The proportion going to the Government and officials is relatively small.
My noble friend Lord Moynihan talked about the British businesses that would benefit from the Games. I accept that there is a difference of opinion between him and the noble Lord, Lord Haskel, on this.
Lord Haskel
There is absolutely no difference between the noble Lord, Lord Moynihan, and me. He spoke about the benefit that those businesses will get in the future, when the rights return to the British Olympic committee. I was asking about allowing British companies to use the Olympic Games as a shop window today. It is not about bread tomorrow; I was talking about bread today.
Baroness Garden of Frognal
I hear what the noble Lord says. It is important to the International Olympic Committee and the Olympic family that they should be very protective of the branding of Olympic and Paralympic goods and services. Part of the contract that businesses signed set out in some detail where they could refer to their involvement in the Olympics. However, one of the other aspects is that officials in BIS and businesspeople throughout the country will use the Olympics as a showcase for British business. Therefore, even if they cannot stick an Olympic brand on their goods, there will be plenty of opportunities for them to meet the international community and build their businesses. We will certainly look for results from that.
My noble friend Lord Moynihan referred to doping, which I have already mentioned. We all agree with him about how tough it is to compete. The figures that he gave about the microscopic differences between those who won gold and silver medals just shows us all how intense the competition is for the athletes.
When the noble Lord, Lord Graham, spoke, I could not help thinking that if the trial for Newcastle boys had only gone differently, we might not have had the benefit of his wisdom in this House over the years. Perhaps we should grateful for some things.
UK Manufacturing Industry
Debate between Lord Haskel and Baroness Garden of Frognal
Lord Haskel
My Lords, it is not true that we do not make anything any more. We are the seventh largest manufacturing nation, and in high technology manufacturing, we stand proudly among the major economies. In cars, aircraft, pharmaceuticals, chemicals, food and space we perform well. Manufacturing is 11 per cent of our economy, but 46 per cent of our exports.
How do I know that? In recent months, the Government have been making a conscious effort to talk up manufacturing—talk it up because we are told that manufacturing is going to play a major role in rebalancing our economy. It will be a rebalancing away from financial services, away from the south-east towards the rest of the country, away from spending towards saving and away from consuming towards creating. Manufacturing is to be central to this.
Now, at the same time, the Office for Budget Responsibility tells us of difficult times ahead and the OECD tells us that our economy is likely to contract. In the face of this, initiatives such as the “Make it in Great Britain” campaign, launched last month by the Government to celebrate the country’s world-class manufacturers, are inadequate and perhaps counterproductive. Yes, it celebrates manufacturing and makes us feel good about it, but it does not tell us that too much actual manufacturing has gone abroad and continues to go overseas. This is what we need to address. This is why, to fulfil these expectations, manufacturing not only has to develop but has to survive. This is what this debate is all about.
This is a huge topic and I shall only be able to touch on a small number of aspects, so I am most grateful to all noble Lords who are speaking in this debate so that we can hear about their special concerns, learn from their specialist knowledge, benefit from their long experience and hear their suggestions. I hope the Government are listening.
The first point I will make is that, if you are going to retain and develop our manufacturing sector, there needs to be a better understanding of what manufacturing actually is in 2011. It is not separate from services—successful manufacturers provide services. One of our finest companies, Rolls-Royce, makes aeroplanes. Did any noble Lords see that absorbing programme on BBC2 on Sunday evening, about how the engines are made? The point is that the airlines do not buy an engine, they buy so many thousand hours of flying time, and each engine is continuously monitored form Derby to ensure that it is working properly. It is given the service it needs by Rolls-Royce wherever the plane lands. Service and manufacturing go together.
This is why the scope of manufacturing is far wider than the Government seem to imagine. It includes things like software, branding, languages, ICT skills and advanced business processes. These are all parts of manufacturing, as well as the metals, materials, products and engineering. Manufacturing, too, has become part of the digital economy. We have a fine car industry, which exports something like 80 per cent of its production. Is the Minister aware that electronics now account for between 15 and 30 per cent of the production costs and that the industry tells us that this is only going to increase? This is the way that many of our manufacturers are developing. Many expect that in 10 years’ time, the digital economy will be equal in size to the physical economy. This kind of manufacturing can only be built on the firm foundation of an existing manufacturing sector. You need an industrial base to build it on, and unless we retain this industrial base, all the fine work done by our science and technology sectors will benefit others. This is why retaining manufacturing in these hard times is so crucial.
Moving us towards this high-value, knowledge-intensive manufacturing combined with service is the task of the Technology Strategy Board. The TSB helps manufacturers by doing the strategic work. It identifies those areas or platforms of economic growth where their businesses can thrive and it provides finance through competitions. This is especially valuable for smaller businesses—companies, perhaps in the supply chain, without the resources to do this work themselves. By bringing together all the aspects of a new technology or a business-growth platform, plus the money, it helps them gain the competitive advantage by speeding up the transfer of knowledge. I declare an interest as the honorary president of the Materials Knowledge Transfer Network. It brings together 4,500 members to embrace all the communities involved in metals, materials and composites, to take advantage of our advanced materials technology and engineering.
There are two other communities that we have been particularly anxious to embrace: science and design. On design, I make no apology for repeating what I said on 24 November in a debate in your Lordships' House on government procurement. Imaginative, sensible and innovative design is one of the foundations of a modern manufacturing economy. It is not an expensive add-on to make something look good. It drives fitness for purpose and raises the quality of use. As Vicky Pryce said in her report the other day, design converts something mundane into something desirable, like the iPhone. This is why I was amazed that during a 20-minute wind-up speech in that debate the Minister spoke of how the Government were going to use procurement to help British industry, but the word “design” was not mentioned once—and this in a House which regularly debates the creative industries. The Government really must get their act together on this.
The Government talk a lot about science and innovation and their importance for manufacturing and economic growth, and they are right to do so. New and better products and new and better ways of making and servicing them raise productivity and profitability. But the point about manufacturing innovation is that you get a double effect. If you make an innovative aeroplane, this enables and facilitates innovation in the airline industry. If you make an innovative piece of medical equipment, the nation's health benefits through medical innovation enabled by the new machine. It turns out that, if you measure the total innovation in the economy, because of this double effect, manufacturing accounts for 42 per cent of the total, even though it is only 11 per cent of the economy.
Where does this innovation come from? It comes from our science base. Fortunately, the Government accept this as part of the empirical evidence about the economic returns from science. Sadly, I do not think that the financial sector has bought this argument, except perhaps in the ICT sector, where time horizons can be shorter. It is due to short-term investment horizons that British manufacturers do not compare well with our competitor nations in research and development. As a result, we are no longer at the cutting edge of technologies where big projects are getting under way—in sustainable or nuclear energy, for instance. It is partly because of this that some of the foreign-owned, large manufacturing companies are becoming increasingly concerned about the health of their domestic suppliers. If they have to import components from abroad, the logical conclusion is that the final assembly can move offshore, too.
The recent financial crisis has thrown into sharp relief the financial management and corporate governance of our manufacturing companies. The absence of any serious policy to retain and develop our manufacturing companies has meant that they, too, are the victims of the same shareholder value philosophy which has pervaded much of British business for years. I congratulate the Government on getting John Kay to look into this—at long last.
The Government call on shareholders to be active in demanding a longer time horizon in business management—the call is for stewardship—but so many of our manufacturing companies are so-called “ownerless corporations”. The real problem is that the link between owners and boards is broken. That is what the Government should be trying to fix, not just excessive pay. That is a symptom, not the disease. Only an engaged and committed ownership will see through the development and retention of our manufacturing companies. The short-term focus of fund managers and their clients runs counter to this, but at least there is now talk of getting rid of quarterly reports. Manufacturing businesses require stewardship. They are not there for the quick buck.
There are several important issues on which I have not touched. Skills and training is perhaps the most important. Increasing the number of apprentices and training courses is of course welcome, but for manufacturing it is the quality and standard that is important. Most apprenticeships on offer are far from the three-year engineering course. Meanwhile, the Government are making life a lot more difficult for the 450 FE colleges where many manufacturers look for their recruits. It is not easy to match skills training with the rapid developments in manufacturing. The answer lies in starting early—at school, if possible. Yet which subjects are facing curriculum cuts? Why, design and technology are, of course.
Trade is important and, yes, the Government are right to encourage exports because those lift standards and enlarge markets, but the Government have to do a lot better. On 22 November, it was reported that the fund to encourage small and medium-sized enterprises to export had signed up just four companies since its launch eight months previously. Obviously, either something more is needed or the qualifications have to be changed. The encouragement that I would like to see coming loud and clear is that exporting is an investment, not a cost—especially exporting to the single market, where it has become easier since every member state now has a single point of contact telling exporters, in English, exactly how to do business in their country. It was your Lordships’ European Committee that helped fight for this. Incidentally, I have never seen this mentioned in any government guide to export. Has the Minister seen it? She will be impressed if she has a look.
Would that there were a single point of contact for British manufacturers dealing with the Government. Over the years, BIS has been constantly reshaped, rebranded and given different responsibilities. I think that its largest budget today is higher education. Manufacturing's big concern, energy, is in environment; employment is elsewhere. So is drawing the line between competition and free trade, which manufacturing needs, and economic warfare, which it does not need. The truth of the matter is that there is no coherent policy at government level for manufacturing. Some may think that nothing extra is needed other than to cut red tape, employment rights and taxes. Yet if you agree that government has a part to play in shaping the manufacturing sector and that government has a role in fulfilling the ambitions and expectations that we have for manufacturing, somehow all of these threads have to be drawn together.
They have to be drawn together because all these issues that I have tried to outline are crucial for the success of our manufacturing sector. The serious thinking has to be coherent if it is to be effective. On 29 November, in the Financial Times, a poll of manufacturers reported that most directors of companies participating in the survey cast doubt on the Government’s efforts to encourage a shift in investment and output towards manufacturing. I am sure they had their views confirmed yesterday, when they heard how the Prime Minister is going to the euro summit all fired up to defend the interests of the City. Would it be presumptuous to join the front page of this morning's Guardian and ask: what about the interests of manufacturing? I hope the Minister is going to tell us that the Government have a coherent and balanced policy, and a plan to use all the levers of active government to support, enable and empower manufacturing, from prime contractors down through the supply chains. I beg to move.
Baroness Garden of Frognal
If noble Lords will forgive me for just one moment, the timing for this debate is very tight. Back-Bench speeches should be no longer than six minutes, so when the “6” comes up noble Lords should please finish their contribution.
Gambling Commission: Health Lottery
Debate between Lord Haskel and Baroness Garden of Frognal
Baroness Garden of Frognal
My Lords, the noble Lord raises an important point about the issue of whether the Health Lottery will impact on the National Lottery. We are well aware of the vast amount of good work that the National Lottery does for the arts and a whole range of charitable organisations in this country. This is the first time that a lottery has been set up in this mode, with 51 society lotteries under an umbrella. It is a new model, which is why we are looking to the Gambling Commission to report back to the Government on how it is going to operate. Of course, the Health Lottery has been going for only eight weeks so it is early days as yet to see how it will pan out, but I hope that the noble Lord will rest assured that the Government are monitoring the situation.
Lord Haskel
Following on from my noble friend Lord Faulkner’s question, should the Minister not be speaking up for those charities that give 50 per cent of their income rather than those that give only 20 per cent?
Baroness Garden of Frognal
My Lords, I am sorry if I was not speaking up loudly. One indeed commends the society lotteries that give on average 51 per cent to good causes overall, which is a much more significant proportion than 20 per cent. The question remains whether this will be a form of raising additional funding for good causes, and only time will tell whether that is the case.