Budget Statement

Lord Palumbo of Southwark Excerpts

Monday 4th December 2017 Lords Chamber

[Lord Palumbo of Southwark (LD)]

My Lords, once again we meet to debate the Chancellor’s offering of ritualistic cliché and fractional tinkering around the edges of vast, intractable problems—this time exacerbated by the need to save his job, the high drama of Brexit and the existential threat of a Marxist Government. We were offered such insights as:

“We are at a turning point in our history, and we resolve to look forwards, not backwards … to seize the opportunities ahead of us”.—[Official Report, Commons, 22/11/17; col. 1060.]


This was accompanied by a series of safety-first measures. The climax was a pyrotechnic display of policies to kick-start the housing market. But when the smoke cleared, one was left oddly dissatisfied—and, of course, the measures will not have the promised effect.

Noble Lords will recall promises, written in blood, to balance the books by 2015, to increase productivity, to slay the welfare beast and, yes, even to boost housing. Perhaps Budgets should begin with a scorecard, independently produced, showing promises made versus outcomes achieved. Of the many truths in politics, one stands out: the Budget will not change much. So it might be worth pausing to examine the economic background to this predicament.

We are now almost 10 years into the biggest exercise in monetary easing in history, one which was meant to turbocharge growth on the back of healthy inflation. Instead, relative to the trillions which have been spent, growth has been anaemic; and worse, the yield curve no longer exists. Noble Lords will recall 10-year rates at 10%, but now they are barely 2%, and negative in some places, while a quarter of a percentage point shift in rates is front-page news.

The Chancellor got one thing right:

“The world is on the brink of a technological revolution”—[Official Report, Commons, 22/11/17; col. 1046],


he announced. But he left it at that. He failed to craft a Budget through the prism of this truth. Instead, and as ever, it was a tweak here and a tinker there.

We need to step back and accept that a lot of what we learned at school no longer applies and that new technology is acting as a massive deflationary force, as the noble Lord, Lord Haskel, referenced with Just Eat. Margins everywhere are collapsing. Look at financial services and the effects of AI. I have seen this first hand. I recently sold a business after it was disintermediated by technology, and my new business is disrupting the office market, which at last is facing technology’s sharp edge. Today, as soon as an inefficiency is spotted, a young genius moves in for the kill like a “Blue Planet” predator, disintermediating, disrupting, driving down margins. Uber, Amazon, Spotify, Deliveroo, Airbnb, Google, Netflix—all devastating deflationary forces which disenfranchise the real economy. They are moving so fast that the combination of easy money and fractional tinkering will have no effect.

Ten years post 2008 and the measures which were then necessary, our direction of travel is clear. Look at our debt mountain, the toxic by-product of democracy’s largesse. In moments of lesser terror, we feel in our gut that we are living in a new paradigm—that the old rules no longer apply, that the edifice of confident promises will one day shatter and that something has to give. Even since the Budget, RBS has announced job losses due to technology, and Morgan Stanley has reported on the effect of a Corbyn Government on the economy and sterling. Clearly, we need remedies beyond cliché and tinkering. Yet to suggest we legislate for no deficits; require estates to contribute to old-age care; means test the winter fuel allowance—as the noble Baroness, Lady Bakewell, eloquently suggested—free TV licences and bus passes; require drug, alcohol, smoking and food abusers to contribute to their medical care, or charge for missed GP appointments, would be electoral suicide. Any proposal advocating the need for personal responsibility is anathema in current-day politics.

As a result, the Budget is designed to satisfy short-term needs and deal with urgent political imperatives rather than meet the reality of current economics and build a platform for long-term stability. Still, the time of ritualistic cliché and fractional tinkering may be drawing to a close.

Women: Contribution to Economic Life

Lord Palumbo of Southwark Excerpts

Thursday 6th March 2014 Lords Chamber

[Lord Palumbo of Southwark (LD)]

My Lords, I thank my noble friend Lady Northover for bringing this debate forward and allowing me the opportunity to contribute today. I would also like to thank noble Lords too numerous to mention for their warm welcome. It is an honour to be speaking for the first time. I owe a debt of gratitude to the excellent staff who have helped me navigate my new life as a Peer. Throughout the past few months I have been gently admonished and warmly supported in equal measure. Finally, I thank my noble friends Lord Strasburger, Lord Alliance, Lady Suttie and Lady Scott of Needham Market for their support and encouragement, none of which is taken for granted.

While businessmen such as myself can be a little abrasive in their day-to-day dealings, I have chosen this Motion for my maiden speech for the cross-party nature of the issue. Despite recent stories demonstrating the numbers of women in work, there is still more to do to ensure that women can work should they want to. It is not just for women to make this case, we should all do so. I do not think anyone in this Chamber would disagree with this. The great imponderables of affordable childcare and flexible working still disproportionately shackle many women of working age. This will change only if we work together. I believe that the best solutions are found when people from all parties put their heads together and differences aside.

It will not surprise your Lordships to know that I did some research on maiden speeches before today. Indeed, it may not have taken me four months to deliver my own had there not been such a wealth of material available. The noble Baroness, Lady Kennedy of The Shaws—already mentioned by my noble friend Lord Holmes of Richmond—put it perfectly in her own, exceptional, speech. She said,

“the idea of cross-party co-operation on major national issues seems so incontrovertible”.—[Official Report, 19/11/97; col. 600.]

I believe in the role of this place, its personalities and its power to deliver on major national issues. It is often women who drive change and bridge partisan divides. Only last week, we were privileged to be addressed by the German Chancellor, a role model for pragmatism and progress, not to mention her thoughtful views on the future of Europe. I should also mention my dear friend Dame Tessa Jowell, who sits in the other place and had the foresight to work across party lines to make the Olympics such a success.

Twenty-five years ago, I started a nightclub in a disused warehouse five minutes from where your Lordships now sit, on the other side of the river. It did not open until midnight and served no alcohol. It was a difficult beginning and had all the problems of a late-night business, not least frequent visits from the right honourable Member for Bermondsey and Old Southwark. Building a business from scratch has been the biggest challenge of my life. Trying things out, making mistakes too numerous to mention, has been a difficult but also life-enhancing experience. Over the years, the business has expanded into live events, recorded music and digital media. What was previously a disused warehouse is now the proud headquarters of a global enterprise. It is this journey which has shaped my views on the topic of today’s proceedings.

The late-night entertainment and music industries are by their nature male dominated. While my own appearance might not immediately give this away, the world I inhabit is as muscular as you can imagine. At the Ministry of Sound, women occupy four of the nine most senior director positions and there is roughly a 50:50 male to female ratio at intermediary and junior levels. I do not hold up my organisation as an exemplar, but the empathy and common sense of women has played a key part in building my business over the years. The issue then becomes how to strike the right balance when women want to start a family. There are a plethora of rules and regulations, which are fine as far as they go, but there is a difference between following the rulebook and creating an atmosphere of empowerment. Recently, we have been in discussions with a woman to join the business in a senior position. She is uncertain, as she wants to start a family within two years. Our view is that she would be able to build her team within this timeframe and that her skills outweigh the perceived inconvenience of flexible working.

We will have done our job if starting a family is seen as career enhancing, not a problem, and something which goes beyond the strictures of HR—support rather than compromise. While I am sure there will be many excellent suggestions made in this debate, it is perhaps more difficult to legislate for the attitude to which I refer. If we can win hearts and minds, so as to encourage a more embracing type of behaviour, I believe that businesses of all types will change for the better.