Autumn Statement

Lord Horam Excerpts

Thursday 3rd December 2015 Lords Chamber

[Lord Horam (Con)]

My Lords, I congratulate my noble friend Lord Carrington of Fulham on his excellent introduction to this short debate. If I can supply one small omission, it was Gary Player, the golfer, who said, “It’s funny, the more I practise the luckier I get”. My noble friend was commenting, of course, on the supposed luck of the £27 billion extra which the Office for Budget Responsibility discovered in the past few months. However, it was not luck. First, the Chancellor created the Office for Budget Responsibility—so it was an independent body which came up with this new figure—and, secondly, he has created the conditions in which the Office for Budget Responsibility could come up with such a figure. So, as my noble friend rightly pointed out, he deserved his luck.

As a consequence of that, we are exactly where a good, sensible Government should be. We have steady growth of roughly 2.5% per year and we are reducing the deficit in a steady, gradual way over the period of a Parliament. Whether we will achieve a small surplus at the end of this Parliament I rather doubt—the pressures on public spending are so great that, if we do not achieve that, I will not be bothered—but, none the less, we are heading in the right direction.

As someone who learnt his economics in Cambridge at the high point of Keynesian economic study, I am comfortable with a Chancellor who puts at the heart of the economy the need to keep economic growth going. That is the fundamental point of economic policy. If you get that right, most other things fall into place. I am not sure whether the noble Lord, Lord Skidelsky, who is a distinguished biographer of Keynes, will wholly agree with that because, as we know, no one economist ever agrees with another. None the less, I think that is the heart of the matter.

Let me put the central point of my short remarks to my noble friend Lord O’Neill of Gatley, who will be winding up shortly. This is a wonderful opportunity to invest in infrastructure and housing. Andrew Haldane, the chief economist at the Bank of England, pointed out that the Bank of England has worked out that interest rates are at their lowest since Babylonian times, 4,000 years ago. I hope the Bank of England’s historical research is rather better than its forecasting of interest rates but, if it is right, this is a unique opportunity for us to invest in the infrastructure and housing we so badly need.

On infrastructure, I am thinking of: obviously, HS2; more important in my view, as a northerner, HS3; more roads; as a former London MP, a third runway at Heathrow, please, for the sake of the London economy and others; power stations; and fracking. I was pleased to see in the review £1 billion extra for a shale gas sovereign wealth fund to help benefit local communities with the achievement of further fracking. That is good news. On housing, there is a vast gap to be filled. As the Chancellor said, one of the biggest social failures of our age is the failure to build enough housing. In particular, will the Government pay attention to low-cost rented social housing, which is as important as housing for people to buy?

All in all, this was a one-nation review, by a one-nation Conservative Chancellor, in a one-nation Conservative Government, and as a one-nation Conservative I applaud it.

Queen’s Speech

Lord Horam Excerpts

Thursday 4th June 2015 Lords Chamber

[Lord Horam (Con)]

My Lords, I add my warm welcome to the two maiden speakers, the noble Lords, Lord O’Neill and Lord King. Both are economists, as am I. I tend to think that economists ought to run the country, but I doubt that I would carry the House with that thought. None the less, the noble Lords are very welcome, particularly since we are having an economic debate. Perhaps we could leave it that economists might be rather better than lawyers at running the country; that might be something that the House would agree to.

A recent issue of the Spectator purported to list the top priorities of what it called “Cameron’s inside gang”. It did not actually spell out what “Cameron’s inside gang” was, which might have been more interesting, but it listed the priorities. They were,

“keeping economic growth going, getting an acceptable deal from Europe, securing the Union at home, showing that their policies benefit the poorest in society and ensuring that more houses are actually built”.

That rather cheered me up: first because there were only five priorities. Usually Governments have a long laundry list of issues that they say they are going to prioritise, but five is quite enough. Secondly, I rather agree with the priorities. You can say, with Groucho Marx, that if you do not like them, I have others—but if I had to settle for five at the point of a gun, those five are not too bad.

My problem is—and this is what I want to say a few words about—the difficulty there will be in achieving priority one, keeping economic growth going, and priority five, getting houses built. On economic growth, the US recovery is proving feeble, the BRIC countries, which were made famous by the noble Lord, Lord O’Neill, are slowing down and our exports are suffering. Jaguar Land Rover sales fell by 20% in the first quarter. Manufacturing is not doing particularly well at the moment. The international situation is not very promising and growth is rather fragile.

I am also concerned about the Government’s stance. Here I get into questions of Keynesian economics and so forth. The Government are saying that they are giving top priority to growth, according to the Spectator, but the economic section in the manifesto is all about deficit reduction, and the Queen’s Speech also centred on this. This reminds me of the beginning of the last Parliament, when priority was given to deficit reduction, and expenditure, particularly capital expenditure, was cut pretty drastically. The result was that the rather feeble growth went into reverse. Macroeconomists at the Lords seminar on austerity under the chairmanship of the noble Lord, Lord Bilimoria, which I attended before Christmas, suggested that this might have cost us 4% in GDP growth over the two years at the beginning of the last Parliament.

Only after the infamous “omnishambles” Budget did the Chancellor realise that the advice he was getting was wrong and quietly change tack, becoming rather more Keynesian. As someone who learned his economics in Cambridge during the post-war Keynesian heyday of the 1950s, I can only commend that, as well as his political flexibility—but I do not want to see the emphasis on deficit reduction repeated in the first Budget of this Parliament. That would be a serious mistake.

I would much prefer the Government to stick to their general proposition that they will give priority to maintaining economic growth and, consistent with that overriding objective, keep firm control of current government expenditure and endeavour to reduce the deficit year on year. I believe that the Chancellor now has real credibility as a result of his success—plus, for the first time in many years, a decent majority in Parliament—and the markets would not mark him down for adopting such a posture. It would be much more sensible that trying to meet the rather implausible figures that were mentioned in the Queen’s Speech.

My second and final point is about housing policy. The fact is that housing policy in the UK has been a disaster for the last 40 to 50 years. In 1968 we built 425,000 houses. Last year it was 140,000, but we need 250,000 a year. As a result, prices have soared and we spend £24 billion a year on housing benefit—a huge sum that, if it were spent on actually building houses, would revolutionise the situation. As John Kay, the FT columnist, put it the other day, the trends over the past 40 to 50 years,

“are … entirely explicable by reference to changes in … policy”.

In other words, it is our fault—or rather the fault of Governments and Parliaments over the past 40 or 50 years.

Now the Government want to go back to selling more social housing—this time, that owned by housing associations. This is a mistake. It does nothing to increase supply: indeed, it will reduce it. I therefore endorse the remarks made on Tuesday by the noble Lords, Lord Kerslake and Lord Best, in this Queen’s Speech debate. Since the Government appear determined to bring forward a Bill to transfer housing in this way, I beg them to subject it to pre-legislative scrutiny so that expert opinion on housing can be fully heard by both Houses of Parliament. Then we will see exactly what people who really know about the housing situation think.

To be fair to the Government, they have relaxed planning controls and encouraged the assembly of large parcels of land. I believe that the cost of land is a fundamental issue that has to be tackled in a radical way if we are to get more housing. I also believe, as the noble Lord, Lord Kerslake, said, that in Greg Clark we have an extremely able Secretary of State to deal with these matters. The fact is, though, that if we are going to get a decent housing situation for our children and particularly our grandchildren, with the sort of benefits that we enjoyed when we were young, we must have a much bigger and bolder effort by government to deal with the housing problem. Harold Macmillan did it in the 1950s when he oversaw the building of 300,000 houses a year, and if the Government are going to be truly a one-nation Conservative Government, they should be emulating him.

National Infrastructure

Lord Horam Excerpts

Thursday 22nd January 2015 Lords Chamber

[Lord Horam (Con)]

My Lords, as others have done, I congratulate the noble Lord, Lord Adonis, on introducing this debate. We all respect his great record in transport and education. Equally, I am glad that my noble friend Lord Deighton is answering for the Government because he is the great implementer, as the noble Lord, Lord Adonis, admitted in his remarks. Indeed, with the two of them together, the House of Lords leads once again over our colleagues in the House of Commons; I do not believe that it could field two such Ministers as we have today leading our debate.

Undoubtedly, infrastructure planning has been a problem for this country for many years, stretching over many different Governments. The noble Lord, Lord Adonis, said that we were now 27th in the league of international comparisons. I thought it was 24th but, whether it is 24th or 27th, it is far too far down for a country that is fifth overall in the economic league tables. Now we have the annual infrastructure plan, which is an excellent idea and has cleared up some of the chaos that we were left in by the previous Government due to their bad planning over PFI and their penury on the macroeconomic front. That has helped to bring an element of stability to the whole situation but it is not enough.

Urgent attention needs to be paid to two things that I want to stress to the Minister, which I hope he will pay attention to. The first is that we need to get going on fracking. There is an important decision being taken shortly—in the right direction, I hope—by Lancashire County Council. I speak as a Lancastrian who knows the area of Bowland extremely well; it is where I was born. That decision needs to go the right way. If it does not go the right way, I hope that the Government will intervene and overrule the council. We need to make progress on this matter, otherwise we will be left behind in this very important area of energy development.

Secondly, affordable housing was mentioned by the noble Lord, Lord Adonis, and in a very important speech by the noble Lord, Lord Rogers of Riverside. I agree with both of them: our housing record is appalling. We need between 200,000 and 250,000 houses a year. Even Harold Macmillan in the 1950s was able, from an almost standing start, to get up to 312,000 houses in two years. He was able to do that only by a careful and dynamic plan from the centre, organised by the Government. It will not be enough to rely on private housing providers. They will not build the houses in the right places for the country or for the people who need affordable housing. What is happening in London now is a disgrace in terms of the number of houses and flats that are being built and immediately sold off-plan to foreign buyers and are not available to people who live in London. That must not happen any longer if we can possibly avoid it.

I therefore say to my noble friend: I want to see in the next Conservative manifesto something very concrete on fracking and something very concrete on affordable housing.

Autumn Statement

Lord Horam Excerpts

Thursday 4th December 2014 Lords Chamber

[Lord Horam (Con)]

My Lords, I congratulate my noble friend Lord Rose of Monewden—I hope I have pronounced that correctly—on his maiden speech. We will all be interested to hear from him on business matters. I understand that he also has experience of turning round failing hospitals. As a former health Minister I shall be very interested to hear about that as well.

As this is the last Autumn Statement before the general election, it obviously has more than a whiff of politics about it. As an economist and as a politician, I have sometimes felt torn in two by the conflicting priorities that these occasionally impose—but not on this occasion. For the first time, the Chancellor of the Exchequer has seriously hit the holy grail of economic policy, which is economic growth with low inflation. He has done that partly through his own efforts, which have been somewhat more Keynesian, as the noble Lord, Lord Desai, implied, than he might perhaps have thought earlier on. He has also done it because of the enduring legacy of the Thatcher and Major years.

My noble friend Lord Lawson of Blaby referred to those years, but did not mention that he himself played a central part in the microeconomic management from which we still benefit. Ed Conway, the “Sky News” economics editor, wrote in the Times the other day:

“Europe is still awaiting its Thatcher moment”.

That is because of the regulations and problems of the labour market which are still prevalent, particularly in southern Europe. Even Germany has problems because it is still waiting for its Keynesian moment. It does not understand that there has to be some expansion from time to time in order to get the economy going. Believe you me, if you are in the eurozone and you have not had a Thatcher moment and you still have not had a Keynesian moment, you are in real trouble. That is the difficulty they face—and it will impinge on us in due course.

I welcome particularly the centrepiece of the Statement about infrastructure development. As a former transport Minister, I welcome the points about roads and railway development, although, as the noble Lord, Lord Adonis, rightly pointed out, under both Governments, far too often these have been stop-start projects. We should not forget one thing, which is that we have done particularly well on broadband. When this Government came to power, the UK was one of the worst countries in western Europe for broadband development; now we are the leader. That is a very good example of how government policy should be conducted.

Also in the context of infrastructure development, as a Lancastrian I particularly welcome the emphasis on the north of England. The HS3 project has everything going for it and makes total sense. I hope that my noble friend Lord Deighton is listening carefully: I hope that the Government will proceed with HS3 whatever happens to HS2. HS3 should take priority because it is good value for money and makes sense.

I think that we should proceed with fracking in a sensible way, while obviously taking the environmental concerns into consideration. Jim Ratcliffe, a fellow Lancastrian and the founder of Ineos in Scotland, took the right approach when he said that we should increase greatly the amount going to local communities as a benefit from fracking. He proposed that 6% of the revenue sales should go to local people, 4% to the owners of the land and 2% to the communities. That compares dramatically with the figure of 1% which the Government are proposing at present. If we are going to get going on fracking, we have to do something dramatic. Cheap energy is the new cheap labour. Now that China’s wage levels are coming up to ours, cheap energy is absolutely crucial and also has geopolitical implications in terms of the new Cold War with President Putin in Russia. This is something of vital importance which I hope the Government will focus on.

Finally, I will say something about low pay, which has rightly been mentioned by a number of noble Lords opposite. It has been reported that at the moment there are some 300,000 people in this country who have a job but are not getting even £6.50 an hour for it. That is a scandal. When Frances O’Grady, the general secretary of the TUC, recently came to speak to Conservative Peers, I asked her what should be done about this issue. She said that the first thing we have to do is enforce the minimum wage provisions. That is not being done as extensively as it should be in this country. I hope that the Government will listen to what Frances O’Grady said because she is a very sensible woman.

Budget Statement

Lord Horam Excerpts

Thursday 27th March 2014 Lords Chamber

[Lord Horam (Con)]

My Lords, I heard the speech of the noble Lord, Lord Desai, last year, and I greatly enjoyed it as he always talks with such wisdom. I enjoyed it even more this year. If one had to conduct a Desai test before Budgets, this one would definitely pass by comparison with some of the others. During his long career in politics and economics, the noble Lord, Lord Desai, founded the Centre for the Study of Global Governance. I do not know whether he would agree, but whether it is global governance or national governance, successful governance is always a balance between competence and fairness. One can reinforce the other.

If we look at the Budget from that point of view, it was a distinct success on the side of fairness. I echo what my noble friend Lord Sheikh said about raising the income tax threshold. That was one of the most significant things in the Budget and one of the top two or three priorities. Liberal Democrats claim great credit on this front, and I would give them a fair measure of credit, but none the less it was clearly a success, whoever claims it. When Labour left office people were paying income tax on £5,600 a year. It was scandalous that they paid income tax on such a low level of pay. The income tax threshold is now rising to £10,000 a year and from next year it will be £10,500. It cost £12 billion to make this change, which is undoubtedly a big ticket item by any standard, but it was the right thing to do.

The Chancellor has also accepted the Low Pay Unit’s recommendation for raising the minimum wage and is generally encouraging about the living wage. The noble Lord, Lord Haskel, mentioned that in his speech and I entirely agree with what he said. It is not just a matter of rewarding people for their restraint, which has been considerable in the past three or four years, but producing an economy that has an incentive for higher productivity. Subsidising low wages is no good at all in the long run. There may be some sort of consensus, at least on the Back Benches, about this issue. That is also an area in which the Government are absolutely on the right lines. Companies that are cash rich can certainly afford higher pay now. Given that inflation is less than 2%—1.7% on the latest reading—there should be no adverse effect on that.

With regard to competence, the Chancellor clearly was right to keep a firm grip on government spending. I recognise that there has been a lot of criticism of him over the past two or three years from what I call a Keynesian point of view. As someone who read economics at Cambridge when the influence of Keynes was very high in the late 1950s and early 1960s, I can well understand that point of view and where it is coming from. The noble Lord, Lord Hollick, made that point and others will no doubt do so. I see the noble Lord, Lord Skidelsky, in his place. As the biographer of Keynes, I defer entirely to him.

None the less, it is fair to make two points. First, as the noble Lord, Lord Desai, said, to some extent we are in a post-Keynesian situation. Things have moved on since Keynes was alive and doing his marvellous work in economics, for which we are all still greatly indebted. Secondly, the Chancellor has been extremely flexible. He has considered these points and has steered a middle course—a third way, if you like—between a classic Keynesian point of view and a non-Keynesian point of view. He has been flexible and sensible. The noble Lord, Lord Hollick, quoted Anatole Kaletsky as saying that the Chancellor is a stealth convert to Keynesianism. The Chancellor has proved able to learn from experience and reality and has provided a way forward which makes total sense to me. That is now history. We are now at the turning point. We have economic growth again and the question is how this can best be sustained. As I said, companies have cash in the bank, demand is increasing, which is what they need, and it is a good time to ramp up incentives to invest. Therefore, the Government’s approach is welcome.

As has been pointed out, we also need more public investment. We are a small and crowded island with strong democratic procedures in place. Therefore, it is always hideously difficult to get public investment going with any sense of urgency. However, I am sure that, given the background of the noble Lord, Lord Deighton, and his success in the Olympics, we have the right man in place to get public investment going.

In that context, as one who was born in north Lancashire and takes his title from that area, I am all in favour of fracking. I am certain that a sensible regime that both rewards the local communities that sit on top of the Bowland shale and allows the exploitation of gas and oil to proceed to the benefit of the economy and our economic security can be constructed. However, at the moment, mixed signals are coming from the Government about this. The Prime Minister is saying that it can be done quite quickly, possibly during the course of this year—there may be evidence on the ground—but the companies are saying something quite different and that we might not get a reasonable amount of production until the end of the decade. I would be grateful if the Minister could clarify the situation. It is important to have a good understanding of what is happening in this area.

Just as important as infrastructure are human skills and it is for that reason that I am strong supporter of what the Secretary of State for Education is doing. In all fairness, he is building on the work of the previous Labour Government in initiatives such as Teach First and the academy programme, but he is pushing forward with a vigour—some might say a ruthlessness, but a relentlessness anyway—that is, I hope, transformational. This is hugely important. It is just as important as infrastructure investment.

All that is very good but I must stress, as we have all done in different ways, that the economic recovery is fragile and there are some clear threats on the horizon. One, of course, concerns the economic measures which it may be necessary to take to deal with the political situation in Ukraine. Soft power should be used—I am right behind that—but it may come with a big economic penalty. It is an economic penalty we should pay, but it will none the less be there.

The second threat comes from deflation in the eurozone. Undoubtedly, the European Central Bank has done a good job in averting disaster and restoring a good measure of confidence. However, it now faces a much harder task in avoiding a prolonged period of Japanese-style deflation. If that materialises, we shall certainly suffer in the UK.

A further threat comes from the situation in China. For some years now, the Chinese economy has been propped up by debt-fuelled investment—I do not know what the noble Lord, Lord Desai, thinks about that—much of which has been squandered on speculative property ventures, useless infrastructure and excess manufacturing capacity. Now the day of reckoning is coming in China, I fear. There will be defaults of companies and credit will have to be reduced. That will have a considerable impact on the rate of growth of the Chinese economy, which will hurt us and the whole world.

Finally, we have our own imperfections. We are still not very good at exports; productivity is behind our rivals in Europe; and we are still too dependent on debt, rising house prices and domestic consumption. Therefore, there is undoubtedly a great deal to do. There is no room for complacency. The Budget has reinforced my view that the Government are heading in the right direction and I hope that they will keep to it.

Economy: Inflation

Lord Horam Excerpts

Tuesday 11th March 2014 Lords Chamber

Asked by

[Lord Horam]

To ask Her Majesty’s Government what assessment they have made of the latest report of the Office for National Statistics on the consumer prices index and its impact on household budgets.

[Lord Newby (LD)]

My Lords, the consumer prices index measure of inflation decreased on an annual basis to 1.9% in January 2012 from 2% in December. This is the lowest rate since November 2009, which is good news for families and businesses. In its December economic and fiscal outlook, the Office for Budget Responsibility forecast average nominal earnings growth to rise more rapidly than CPI inflation this year.

[Lord Horam (Con)]

I wonder whether my noble friend saw the excellent speech by the chairman of the Engineering Employers’ Federation last week in which he said that he thought now was a good time for employers to give a good wage increase to their employees to make up for the restraint they had exercised during the years of Labour’s great recession. Does he agree with this sentiment? Does he further agree that it would be even more excellent news if, in the Budget next week, the Chancellor thought it fit to raise, once again, the income tax threshold, thus reinforcing our commitment to the low paid?

[Lord Newby]

My Lords, I agree with the EEF on the desirability of wage increases, particularly for those on lower incomes and not only, as has happened all too frequently in recent years, for those on the board. I also agree that raising the income tax threshold further is an excellent way of helping people on modest incomes and I hope that we can do more of it.

Families: Cost of Living

Lord Horam Excerpts

Thursday 31st October 2013 Lords Chamber

[Lord Horam (Con)]

I, too, congratulate the noble Baroness on having brought about this debate. She made a thoughtful speech because she acknowledged in her introduction that these are global trends. Whether you look at America, Canada or this side of the Atlantic in Germany, France or Britain, inequality has increased over the past 10 years. People on low incomes and middle incomes have been squeezed and in many instances their standard of living has reduced over long periods. The noble Lord, Lord Monks, also made an issue of the balance between profit and labour. That has in many cases gone the wrong way. I agree that there would have been a reason for that if investment had been as high as we would have liked it to be but obviously that has not happened, and that changing balance is an important part of what has gone wrong in the past few years for all sorts of reasons.

However, as the noble Baroness, Lady Prosser, said, tackling these big issues is difficult for any Government, whether they are Labour, Conservative or coalition. None the less, we have to be positive. There is no point in sitting back and letting all this flow over our heads. We have to do what we can. In that respect, the initiative by the leader of the Opposition, Mr Miliband, at his party conference was notable and certainly made a big political impact, if nothing else. Sadly, I am afraid that such an initiative is unlikely to bring the relief to ordinary people that they would hope for. In particular, the truth is that if there were to be a 20-month freeze it would be easy for companies to get around that, either by increasing their prices in anticipation of the freeze or, if it happened, looking at their situation and increasing their prices afterwards by more than they would otherwise have done. So the net effect over quite a short period may not be much different from what it would have been anyway. I am afraid that that is the difficulty of introducing freezes of that kind.

I heard what my noble friend Lady Tyler said. I prefer to look at the green subsidies, but not because we want to change them in any way. All three parties have, quite rightly, had a part to play in bringing in green subsidies to produce decarbonisation and to contribute to dealing with climate change. However, as my noble friend rightly pointed out, the way they are now weighted on gas and electricity prices means that they hit the poorest hardest, because those prices are regressive, whereas taxation is progressive. If a way could be found of shifting some of that burden from prices to taxes, we would make progress. I have no knowledge of what the Government may do but I know that not only Simon Hughes but the Prime Minister made a point about this. Much though I like my right honourable friend Mr Hughes, I think it is more important that the Prime Minister takes this on board and I am glad that he has. I hope that some progress can be made in this very delicate area.

When it comes to looking at the sustained effect on gas and electricity prices, one should also look at a well regulated competitive situation. I stress good regulation, as well as good competition, as both together are needed. I think that it was the managing director of Ovo Energy, Mr Fitzpatrick, who said precisely that to the Select Committee in the other place—that sometimes the “six”, as they are called, look like a rather cosy cartel which is immune to competitive good practice. People coming into the industry need to have that competitive good practice so as to make the energy companies bring down their costs and thus their prices. Those two arguments should be looked at by the Government, as we want to make a sustained impact on this problem.

I would point out to the Opposition that the Government, as my noble friend Lady Tyler said, have done quite a lot to keep down prices and costs for ordinary people. For example, mortgages have been at their lowest ever rates. The average bill for energy prices is £1,500 a year—a very high level for the average household—but mortgages are obviously even higher. They are a huge cost in many people’s budgets, and keeping them down has been a massive achievement by this Government.

Council tax has been frozen. My own borough of Hammersmith and Fulham has brought down its council tax charges three years in a row without any reduction in the quality of public services. That is a huge achievement by a Conservative council. The Government have also cancelled planned rises in fuel duty three years in a row. Fuel duty now stands at 13p per litre less than it would otherwise have been. The noble Baroness, Lady Tyler, mentioned childcare. That has been something on which the Government have honed in, and I am glad to say that the Labour Party is also talking about it. As a grandfather who occasionally looks after five grandchildren, I am aware that the cost of childcare is a real issue. I think that we should pay attention to that and be glad that the Government are doing so.

As was said earlier, we have also raised the tax threshold and are in the course of raising it further, so there will be help from April onwards. The lowest point of the threshold will be £10,000 a year, bringing a saving of about £705 to the average family. Frankly, that is a terrific saving. Therefore, there is help, and I am glad about that.

Again, I make the point to the Opposition that, as a result of all these measures that have been brought in under the coalition Government, inequality has in fact reduced. The fall in the income of the top 20% of the population has been 6.8%, whereas the income of the bottom 20% of the population has risen by 6.9%, I am talking about income, not living standards, and I accept that prices have gone up even more. The noble Lord, Lord Davies of Oldham—a good friend of mine—made the point the other day in Question Time that inequality was in the DNA of the Conservative Party. I am afraid that inequality was in the DNA of the Labour Party when it was in power: the Gini coefficient, which is the acknowledged measure of inequality, reached its highest point ever in our history under a Labour Government. Now, we are becoming more equal because of the measures that a Conservative Government are taking. I do not think that we will take any lectures from him or anybody else on inequality. In practice, the Labour Party talks a lot about equality but the Conservative Party has delivered more equality than the Labour Government ever did.

Obviously there is a big political battle going on but I will close by saying that we need to be positive, as the noble Baroness said, and do what we can to help low-paid families and people facing tough times at the moment. I agree with all those, including the noble Lord, Lord Monks, who said that there should be strenuous efforts to make the Low Pay Commission work effectively. A lot of work needs to be done in that area. The minimum wage is £6.31 and the London living wage is £8.55; there is a big gap between the two. I am talking about London only at the moment. We need to home in on this issue and make sure that people’s cost of living is reduced by as much as possible and that they have the income to cover it. There is hope but we must be positive. I am pleased that this debate has taken place as it has raised an issue that is important to every family in the land.