Queen’s Speech

Lord Horam Excerpts

Monday 16th May 2022 Lords Chamber

[Lord Horam (Con)]

My Lords, I am sorry that I cannot follow the noble Lord, Lord Wigley, down the path of Welsh affairs, not being Welsh, although I will say that the Senedd parliamentary building is one of the finest I have ever seen, as parliamentary buildings go. Of course, the architect was an Englishman, or Anglo-Italian: Richard Rogers.

I want to say something about the cost of living crisis, which is really severe, particularly for poorer households. The Government must take some urgent action to deal with this matter. First, as the noble Lord, Lord Low of Dalston, pointed out in his sadly foreshortened speech, benefits under our system went up by only 3% when inflation was already at 7%. On that alone, poorer households are worse off. We need therefore to look at the whole range of benefits affecting poorer people, particularly to have them well targeted. Universal credit needs to be looked at again immediately. I know this is difficult because it is hard to change universal credit during the 12-month period. There are also people transferring from other legacy benefits to universal credit as we speak—during this year. None the less, it has to be done, because we cannot wait for people in poorer households to be recompensed properly.

Secondly, there is a case for looking at some move to reduce the increase in energy prices, perhaps with some windfall tax on the energy companies, as in the proposal which the Labour Party has put forward. As the noble Baroness, Lady Kramer, pointed out, those companies are awash with cash: £8.5 billion is going into share buybacks, which simply means that they have so much money they do not know what to do with it and are giving it back to their shareholders. Some of that should be sent towards those who are suffering the higher energy prices, since those are massive. Neither of these things can wait until October. They must be done as soon as possible, and certainly before this House rises in July.

In addition, we need to look at a wider issue; namely, some straightforward Keynesian move to stimulate the economy. Classically, in this situation you would reduce VAT. Those who are of my age will remember that when VAT was first brought in by Lord Higgins in 1973—sadly, we no longer have the benefit of his wisdom here—it was with an automatic regulator, so that you could put VAT up or down according to the state of the economy. It is perfectly possible to do that, classically. Therefore, there is a case for reducing the 20% level of VAT to 17.5%. Sadly, there would be a big price for that, as it would cost £19 billion, which is something that the Chancellor may balk at. Instead, he may therefore go for a reduction in income tax, as a penny off its standard rate would cost only £5 billion as opposed to the £19 billion for a meaningful VAT reduction. I hope that will follow sensibly in the Autumn Budget to augment the other measures I have suggested.

This will of course mean an increase in our debt. Debt is already running at roughly 100% of GDP, which is extremely high by historic standards, but the fact of the matter is that all countries are in the same position: Canada, America, Japan, France and Italy all have higher deficits as a percentage of GDP than the UK, so we are not an outlier on this. We should never be cavalier in looking at debt. None the less, we can afford to take the sort of measures that would particularly help the lower-paid households which I have described. That is urgent and should be firmly and right centre in the Government’s sights.

Employment: Terminal Illness

Lord Horam Excerpts

Monday 17th December 2018 Grand Committee

[Lord Horam (Con)]

My Lords, I too am grateful for the opportunity to support my noble friend Lord Balfe in this important debate. I am also glad to hear the remarks of the right reverend Prelate the Bishop of Chichester, which went much wider and were very moving in the context of bereavement, terminal illness and degenerative disease.

I want to approach this from a slightly different angle, if the Committee will bear with me, because it may not be obvious to begin with. I have just finished reading a book by Professor Sir Paul Collier, The Future of Capitalism. He is the professor of economics and public policy at the Blavatnik School of Government in Oxford and makes an interesting point which is relevant to this debate, narrow though it may seem in that context. He says that the ethos of a typical company has been changing. I imagine that he is probably now in his 60s or possibly even his 70s, but as a young man he was brought up in Sheffield, where there were lots of steel companies. As he says, at that time everyone was proud of producing wonderful steel. Sheffield was the steel city of the world and, on the whole, workers were treated well, with strong trade unions and strong rights.

My first job was with Rowntree’s, which is well known as a part of the Quaker tradition. It has now been taken over by Nestlé while the other big Quaker confectionery company, Cadbury’s, has been taken over by an American company. Those companies built houses for their workers and had a proper approach to welfare. There was also the Rowntree Trust, which was involved in social policy.

Paul Collier’s book is very interesting, because he relates it to the nature of capitalism and how we deal with workers. His point is that since the 1970s, things have changed slowly. We have steadily introduced the idea of a company producing not the best product it can but shareholder value, which rules the roost. Companies are now expected to adhere to shareholder value in their basic philosophy. The professor has worse examples than that. For example, he mentions that at Goldman Sachs, people were sent out to find suckers to sell their products to. That is the level we have got to in some parts of our financial industries. As a consequence, this is in effect globalisation. Globalisation has been immensely good in many ways. It has lifted millions of people out of poverty in China and India, but it has had a downside. It has meant greater inequality, less care than there perhaps was previously for workers’ rights and, generally, poor- quality jobs.

This growing inequality is one of the things that I think led to Brexit, for example, to the rustbelt in America, the protests in France and the problems in the Mezzogiorno of Italy. With that downside there is less care for the workers, as opposed to the overall demand of a company to maximise profits and pursue consumer satisfaction, at the expense of workers’ rights and experience.

The obvious answer is more active government. I was glad that my noble friend made the point that there is a possibility of doing something through a statutory instrument to address this issue. I hope that the Minister has something positive to say about that. Today I understand that Greg Clark, the Business Secretary, is setting out some further examples of how the Government are tackling workplace problems and worker rights and I hope this can be included in that general agenda as well as in the specific question which my noble friend raised.

As Professor Collier states in his book, the truth is that government cannot do everything. I think the right reverend Prelate will agree with this point. We also have responsibilities. Companies have responsibilities and individuals have responsibilities as well as the state. The state simply cannot cover the waterfront and get all this done. It is simply too much to ask, especially when we have this wretched Brexit and the bandwidth of government is totally occupied with other matters. Companies have to reacquire—this is the point that Professor Collier makes in the book—the moral and ethical dimension which many of them once had but which is less prevalent today. My noble friend mentioned some companies which have already adopted this idea of help with degenerative or terminal illness, and I was glad to hear that, but he also mentioned that it was not mentioned in the advice given to his daughter and daughter-in-law who are in the HR field, so clearly there is a real problem about companies not recognising the issue.

My plea is not only for the Government to look at this issue and do something about it but that companies, perhaps through the TUC campaign, get on board. It is wonderful that Jacci Woodcock is here today. I am delighted to see her; we are full of admiration—I certainly am—for all that she has done. It is remarkable and it will be a great tribute to her if we could rack up examples of companies voluntarily doing something about it, not waiting for a statutory instrument to be passed by your Lordships’ House and the House of Commons. That would be a wonderful tribute to the work she has put in.

Industrial Strategy

Lord Horam Excerpts

Monday 8th January 2018 Lords Chamber

[Lord Horam (Con)]

My Lords, my first experience of a debate on industrial strategy was rather dramatic. In the early 1960s, I was a young reporter with the Financial Times, and in that capacity I was sent up to Scarborough for the Labour Party conference. Jim Callaghan was Chancellor of the Exchequer and made his big Chancellor’s speech. Half way through, Hugh Scanlon—a name to conjure with then but perhaps forgotten now; he and Jack Jones were the two great trade union leaders—got up and said, “But Jim, where’s the plan?”. Jim Callaghan looked a bit nonplussed for a second or two, but sitting next to him on the platform was George Brown, Secretary of State for Economic Affairs at the time, with the economic document that his department had produced. Jim grabbed it, held it up to Hugh and said, “Hughie, there’s the plan—that’s what we’ll do”. It was a great rhetorical moment and it brought the house down with cheers. I still do not know whether it was planned between Hugh Scanlon and Jim Callaghan or whether it was indeed an entirely spontaneous reaction to Hugh Scanlon’s impromptu remark, and I will not find out now. None the less, it was an example of that period of economic planning, of which the noble Lord, Lord Hennessy, will be well aware.

We come back to this again and again. As my noble friend Lord Heseltine made the point in his own document Industrial Strategy, this is the 10th time since the war that we have come back to an industrial strategy of some kind. There is a good reason for this. The fact is that government inevitably has a huge effect on industry and the economy generally through procurement, financing research and development, education and training, the defence department, technology and all such things. Therefore it makes total sense, even in a de minimis way, to get it all together in a mature and sensible way and to give it sensible leadership so that it can support the market economy in a sensible, professional and valuable way. That is why we have to do it. In addition, as was pointed out by my noble friends Lord Prior and Lord Heseltine, other countries are doing it ruthlessly—for example, China, which has a huge economy, and a tiny economy such as Singapore, which now has a higher standard of living per head of population than we do, because it has done that in spades. Even Saudi Arabia, for heaven’s sake, is now getting its act together with the rather more forceful leader it now has, and, as my noble friend Lord Prior points out, even the USA also does it—rather less obviously than the other countries, but it does it. The fact is that we need a properly thought-through industrial strategy if we are to survive and prosper in the world. Therefore, it is simply a question of whether we have the right priorities and whether we are going about it in the right way.

Surely a central priority that has come out again and again in this debate is investment in infrastructure, as the noble Lord, Lord Mair, has just pointed out, and in skills—a point made very clearly by the noble Lord, Lord Stunell. On page 172 of the document there is a shocking table showing fixed capital investment as a percentage of GDP. For every year from 2005 to 2017, the UK is consistently at the bottom—not just bottom in one year but in all the years mentioned. Even Italy is ahead of us. Germany is at 20%, we are at 15% to 18%, France is at 23% and so on.

Along with the huge problem of low infrastructure spending, we have problems with the digital economy, as pointed out by the noble Lord, Lord Mair. On page 152 of the document, there is another appalling table showing broadband speeds among the G7. For once, we are not at the bottom, but we are very low down and far from the top. This problem lies with BT. What is BT doing? It is depriving us of the facility to watch Champions League football and the Ashes test matches, although at the moment that is not a bad thing, given our performance. None the less, it is depriving us of the chance to watch these things for free, while it is not doing its job of getting speedy broadband distributed to rural areas throughout the country. Indeed, some urban areas do not have satisfactory broadband.

I am pleased that the Government will shortly put into law the right of every consumer to have high-speed broadband by 2020. They were right to face down the industry, which wanted a voluntary arrangement, and to go for a legal requirement by that year, but to liven up BT in this area they need to back that up with further recognition that more competition is needed. Plenty of people are willing to provide the competition and there is plenty of investment that recognises that this is a good area into which to put cash.

Another important area is skills. Technical education has been a Cinderella subject throughout my lifetime. The noble Lord, Lord Hennessy, made the point that people were talking about this 150 years ago, but the fact is that we are still failing in this area. In 2016, only 1,800 18 year-old school leavers in the entire country started higher apprenticeships. That is an astonishing and appalling figure. The latest statistics on apprenticeships show a 60% drop in the take-up of apprenticeships. Clearly something is going wrong here. The fact is that the bureaucracy is not delivering on a very aspirational and sensible policy. Therefore, I hope that whoever is the new Secretary of State—I have not heard the news today on whether the Secretary of State is to carry on or whether there will be a new one—

[A noble Lord]

She is carrying on.

[Lord Horam]

Splendid. I hope the Education Secretary makes technical education a top priority. For far too long we have given priority to academic education; we now need to help the non-academic children in our society.

Finally, as a Cambridge economist, I agree with the point made by the noble Lord, Lord Eatwell, about the trade gap. The fact is that this has been bad, it is bad and it is getting worse. We pay for the trade gap only by borrowing or selling off assets. At the moment, exports account for only 25% of our GDP. In Germany, the figure is 45%. Even France and Italy are ahead of us in exports as a percentage of GDP. Only 10% of all the companies in this country are in the export field. Admittedly, most companies are small and therefore do not export. The figure is higher among medium-sized companies and 40% of large companies export, but the figure is still not that high.

If I may boast for a moment, I started an economic consultancy after leaving Cambridge and shortly after leaving the Financial Times. It is a medium-sized company, with 250 employees, and we export 92% of all our product. I have never seen a trade agreement—I do not know what they are. If you have a good product and a good marketing system, you can export; there is no problem with doing that. Therefore, this is clearly something to which we have to pay attention.

Finally, we should also be careful about selling off too many of our national assets. Alex Brummer’s book, Britain for Sale, points to the dangers of that. Foreign ownership often brings in efficiency and competence, which we need, but all too often national interests are not really followed by the new owners of these organisations. Therefore, I think we need a national interest test as well as the security and consumer tests that we have in relation to foreign takeovers.

I am sure that in these tumultuous and uncertain times we need an industrial strategy. This time, I hope that the one we have started will be sustained.