Queen's Speech

Lord Marlesford Excerpts

Wednesday 2nd June 2010 Lords Chamber

[Lord Marlesford]

My Lords, in 1966, Iain Macleod said of George Brown:

“There is a society for being nice about Mr Brown and I pay my dues like everyone else”.

Our Mr Brown’s fame, if not his name, will endure, as has that of another in whose mouth ambition turned to ashes: the flawed hero of the Scottish Play.

However, Mr Brown did have two achievements. For the first eight years of his chancellorship, he was a prudent steward of the sound economic situation which he inherited in 1997. That had resulted from the radical changes made by the Chancellors of my noble friend Lady Thatcher: the shift to indirect taxation of my noble and learned friend Lord Howe and the 40 per cent top tax rate of my noble friend Lord Lawson. Mr Brown kept public spending on a tight leash. He thus contributed to Mr Blair's second and third election triumphs. We should perhaps forgive him a lot for starting so well. Secondly, he constructed a series of plausible excuses for keeping Britain out of the euro. It is an historic bequest.

But, today, a new cloud hangs over the world economy. The fatal internal contradiction of the euro has raised the spectre of sovereign debt default within the EU. A single currency requires economic management, and economic management is about more than monetary policy. It is now clear that countries sharing a single currency must be subject to an overall fiscal policy and thus a dimension of political union. Setting targets under the 1997 stability and growth pact is not enough.

There is little point in seeking to fine those who are going bust. They must either perish or be bailed out. In the euro area, the second is the only real option. The earlier arrogance of France and Germany, when they said that they were too big and important to be subject to the rules and escaped a fine, has not helped today.

For the smaller and more reactive countries, membership of the euro has merely masked reality from their Governments, the European Commission and indeed the international financial community. They have no interest policy to bother about, no exchange rate indicators of economic performance and little worry with inflation. They can borrow and spend to keep unemployment at bay. In Spain and Ireland, a property boom provided a mirage of prosperity. Italy has a subterranean economy, largely managed by criminals and protected by corrupt politicians. We may end up with a bi-valve Europe: the euro area with integrated economic management and the rest of us with much more economic sovereignty.

What is the lesson in all this? Surely it is that whether you are a family, a small business, a big bank or a Government, ultimate survival depends on prudent housekeeping. How right Mr Brown was to use repeatedly the word “prudence”; how wrong he was to abandon it. The top priority is now to reduce both the budget deficit and the government debt. We here must all help with ideas. Let me put in my pennyworth.

Some quangos are completely out of control. They need to be cut back drastically. Many have become irresponsible pressure groups. They waste taxpayers’ money on madcap schemes and impose huge compliance costs on the private sector and other parts of the public sector. Natural England is an example. Many of us remember last year, when it imposed on the Highways Agency a cost of £600,000 to erect bridges for bats over a new bypass in Cornwall. Now it wants to introduce, at considerable cost to the taxpayer, sea eagles to Suffolk, where they have never been and are neither needed nor wanted by those who are trying to make a living from the land such as pig farmers—I declare my interest as a Suffolk farmer, but not a pig farmer.

The Civil Service needs tighter management. The economic outlook will ensure no shortage of good candidates for a tougher Civil Service. First, from now on, those hired should be pensionable at 65 rather than 60. Secondly, on fringe benefits, why, for example, should civil servants have an extra day of holiday after every bank holiday, known as privilege days?

Finally, I have a proposal to reduce unjustifiably high salaries paid to some in the public sector. Applications for posts where the pay level is expected to be above £100,000 should be submitted together with a sealed tender of salary wanted. Applicants would still state their case for getting the post and the selectors would draw up a final shortlist. At that stage, the sealed tenders of applicants would be opened and the selectors could take account of the salaries asked for by the candidates. I suggest that this could lead to some remarkable results.

Let us be clear. Wasteful public spending cannot keep an economy afloat. But it can sink it.