Economic Prosperity and Employment

Lord Hoyle Excerpts

Thursday 18th July 2013 Lords Chamber

[Lord Hoyle]

My Lords, this House is at its best in debates like this. Everyone who has taken part has tried to be constructive and point the way for the future. We would not be having this very useful debate if it had not been introduced by my noble and good friend Lord Haskel.

I was very pleased that the noble Lord, Lord Bradshaw, talked about engineers because they are not very often talked about anywhere. I say that because I started my career as an engineer in the railway workshops at Horwich. Although locomotives, particularly steam locos, look extremely glamorous when they are going up and down the track, it is not quite so glamorous when you are working in a smoke-box and doing repairs on them. I followed what he was saying on taking National and Higher National Certificates. If you live in a village they know everything about you, and I remember two people talking about me in my own village. One was saying that I started as an apprentice engineer and then took my National Certificate, then my Higher National Certificate, then my Post-National Certificate. The other one said, “You’ll tell me he’s won the ruddy Grand National as well in a moment”.

I start from the importance of manufacturing industry in those days when it was all about manufacturing. From the 1970s onwards we lost about 30% of our manufacturing industry. It was not fashionable to talk about manufacturing industry then; it was all about the service industry. My noble friend Lady Turner and I know this perfectly well, as service industries were a recruiting ground for our trade union activities. We have to have a balance and do all that we can to help the manufacturing industry to succeed. Manufacturing industry went down from 32% in 1970 to 11% in 2010 but, despite that, 46% of our exports are from manufacturing industry. That is why we need to look at where the growth areas are in those fields. We would all agree that the one great manufacturing industry that remains is the aerospace industry, where our success is quite remarkable. I could mention the defence industry but we have to be very careful, given the press reports on some of the countries that we are exporting to—that is a debate for another day, isn’t it? There is room for growth in the pharmaceutical, micro-electronic and chemical industries.

This has been a very progressive and helpful debate. I agree with almost everything said by my noble friend Lord Mitchell. There is a need for a business investment bank to help to promote industry and small industry in particular—a business investment bank that leads and, as my noble friend rightly said, is backed by regional banks. We need to do all that we can and I hope the Minister will agree that the Government ought at all times to favour British industries in its procurement if they possibly can. In this way, and by going for research and development, we can begin to reverse the decline that has occurred in manufacturing industry. If we do that, we have a great future in this country.

As my noble friend Lord Haskel said, Germany, quite unlike us, has always relied on the manufacturing sector. It is the most successful country in Europe and we can learn a lot from it. As my noble friend Lady Turner also said, we must increase the participation of employees and look at the German model of including employers and trade unions in management. They have benefited from that and there is a lot that we can learn.

I see that my five minutes are nearly up. I hope that the Government, who have a central job to do, take note of a lot that has been said in this debate. There is a big role for the future of a business investment bank, backed by regional banks. If we do that, not only will we benefit, but all of us in the country and the country as a whole will benefit as well.

Banking: Royal Bank of Scotland

Lord Hoyle Excerpts

Tuesday 1st February 2011 Lords Chamber

Asked By

[Lord Hoyle]

To ask Her Majesty’s Government whether they have any plans to limit bonuses to be paid to senior Royal Bank of Scotland staff.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, UK Financial Investments manages the Government’s shareholding in the Royal Bank of Scotland on an arm’s-length and commercial basis. The Government are clear that remuneration policies at banks need to reward long-term sustainable performance, not incentivise short-term excessive risk taking. We have made it clear to RBS that it should have a smaller bonus pool than last year.

[Lord Hoyle]

I thank the Minister for that reply. Is there not something lacking when we cannot take firmer or more positive action in a bank in which we have 83 per cent of the shareholding? Does it not give the green light to the banks to carry on in the same way, while innocent people are losing their jobs because of the folly of the bankers, who are seen to be very close friends of this Government? The Government have talked tough and acted weak. Is there not a smell of hypocrisy about?

[Lord Sassoon]

I am grateful to the noble Lord, because it enables me to point out that we are hamstrung in dealing with the bonus situation at RBS. The previous Government signed an agreement with RBS that did not cover the payment of bonuses this year, which means that our hands are tied. I wish they were not. It was the wholly inadequate agreement that the previous Government signed that leaves us where we are.

Lord Forsyth of Drumlean: My Lords, will my noble friend confirm that 50 per cent tax will be paid on every pound that is paid in bonuses; and that 12 per cent national insurance will be paid by the employer, plus 2 per cent by the employee? Therefore, 63 per cent of the bonuses—I think that is the right number—will come back to the Exchequer at a time when it needs revenue. If the money is not paid in bonuses, presumably it can be offset against losses and the Exchequer will receive nothing.