Queen’s Speech

Lord Stevenson of Balmacara Excerpts

Tuesday 10th June 2014 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I start by congratulating the two excellent maiden speakers. The noble Lord, Lord Bamford, made some direct and very sensible suggestions about the UK earning its way through engineering and utilising our manufacturing capacity, but also by investing in training. The endorsement from my noble friend Lord Young, who had visited the noble Lord’s training centre, brought that directly into our discussions. I also thank the right reverend Prelate the Bishop of Durham for his fascinating story about his personal journey to his current see, his tour d’horizon of Durham and the north-east and his commitment to represent the north-east in this House. By a curious quirk of fate, I think that I was responsible for responding to the maiden speech of his immediate predecessor, so without having to do much research I happen to know that he was the 73rd in the line and that the third was another Wilfred. We do not get many Wilfreds, as I said at that time, so I am always pleased to be able to reflect on that and make sure that they get the credit they deserve for having such a ridiculous name.

Looking at how the contributions panned out in this discussion, it is interesting that the majority have been on the business, employment and pensions side of the debate. Of course, we also have it in our title to deal with other issues. Despite a late run from those interested in agriculture and the environment, I am afraid that the preponderance of the debate was in the former areas. I will not pre-empt the Minister, who I am sure will want to go through in some detail the individual contributions made by many Members right around the House across the range of issues. However, I hope that when he comes to respond or when he reflects later, he will wish to write to us about some of the points—particularly the interesting points made by the noble Lord, Lord Tugendhat, about the changing foreign policy context and his concern about the lack of an ability to stop takeovers which might be damaging to viable and successful British-based companies. I would be interested to hear the Minister’s comment on those points.

It is difficult to believe that the irrepressible noble Lord, Lord Holmes of Richmond, ever has a sore head but he did go on about his pensions experience, so I hope that we will get some interest on that. I also hope that the Minister, when he responds, will pick up the important points made on taxation by my noble friend Lady Hollis. We heard quite a lot about the dark side of the flexible contracts which are represented mainly by zero-hour contracts, although there are other variations. That was raised by my noble friends Lady Hollis, Lord Monks, Lady Donaghy, Lady Turner and Lord Young. I also thought that some important points were made, particularly by the noble Lord, Lord Aberdare and my noble friend Lord Macdonald, about the new rules for apprenticeship schemes, which need addressing.

The noble Lord, Lord Mitchell, took us into a digital world and I would be interested to know whether the Minister felt that there was anything in his suggestion for a digital Magna Carta. I am sure that is not just a scheme for a rather elaborate and high-tech exhibition during the anniversary year but reflects a deeper concern about the way that the internet can sometimes get out of control and cause problems, and that some code of conduct—some Magna Carta, as my noble friend put it—would be a good way to go.

The noble Lord, Lord Clement-Jones, made a very important point about visa problems in higher education and in particular on the question of post-doc students. Our universities are suffering badly from this and I would be grateful if the Minister could pick up on that. Also, how can we not have a full and well documented response for that innocent pensioner, the noble Lord, Lord Smith of Clifton? His story of wandering in the deeper recesses of BT and the Inland Revenue must have made the Minister sad, so he must respond. We want to know the real story—even if it is £3.17, as the noble Lord said, there could be a lot of them.

The noble Lord, Lord Bourne, said that we should not discount this year’s Queen’s Speech just because it had a small number of Bills. We do not discount it on those grounds but because when we consider it, the key question is: does it help revive the economy, generate good and well remunerated jobs, ensure that good quality and affordable education and training is available and that good affordable housing is accessible? Does it reassure us that nobody will be left behind? The answer to those questions is that it does not. The Bills do not address the severe cost of living crisis in Britain, where food bank use is soaring, even among many working people, where personal debt levels are dangerously high, where wages have fallen in real terms as essentials such as food and energy prices rise, where too many people are trapped in part-time jobs or with low hours or exploitative zero-hours contracts, and where millions cannot afford to buy their home and are trapped into renting low-quality properties at ever rising rents.

Several noble Lords touched on the question of personal debt, which again seems to be financing our recovery. I share the disappointment that there is little in the legislative programme about the problem debts that are facing millions of our fellow citizens. I declare my interest as chair of StepChange Debt Charity, which is the UK’s largest provider of free-to-client debt management plans; we deal with more than 500,000 clients every year who have problems with personal debts. I think that the Minister is aware of our work in this field, and we are looking forward to talking to him about our recent report, Life on the Edge, which shows how a lengthy period of low or no wage growth and rising living costs has left millions of households stretched to their absolute financial limit.

Individuals and families are paying a high price for the high levels of personal debt. The economy suffers too. Debt is a brake on people’s capacity to work or return to work, and on their aspirations and potential. It leads to mental health problems and family and relationship breakdowns, and has an adverse impact on the wider community. Equally, all society benefits if we tackle this problem. Otherwise, such people all too often turn to high-cost credit, and the recent work announced by the Financial Conduct Authority has shown that we still have much to do to drive bad practice from this sector.

I believe that the time has come to have a mature conversation across all parties about a national strategy for personal debt. In particular, I suggest that we need to look north to Scotland to see how its statute-based system operates. We need to build personal financial resilience so that the poorer members of our society are not paying the highest prices for essential goods and services, there are better safety nets and there is a more formal role for creditors in helping those in financial difficulty.

Another source of personal debt is of course the contingent tax liabilities that students are incurring in higher education. As my noble friend Lady Warwick said, there is now a growing consensus that the higher education reforms introduced by the coalition since 2010 are a complete disaster, yet we look in vain to find a higher education Bill. In a country where living standards are under acute pressure and where the deficit still looms so large, I agree with the noble Viscount, Lord Ridley, that innovation is the one sure way out of austerity. That is why our universities are so important. They are the powerhouses of the knowledge economy. They need to be bigger, stronger and more central to our economy in the years to come. Britain needs to put science and innovation at the heart of a strategy for long-term economic growth. Unless we grow smarter, we will grow poorer. What has been created over the past four years is not sustainable in cash terms. It does nothing to boost the science base, to diversify student choice, to bring universities and business together or to deliver effective progress toward better social mobility. This is something that we will definitely need to return to.

The small business, enterprise and employment Bill, which will be reaching the House towards the end of this year, has been covered by a number of people and I do not want to go into it in too much detail. It really is a very weak Bill, and the common theme across this motley collection of measures seems to be that the majority of its proposals were in fact first raised by the Labour Party, often in debates here in your Lordships’ House, although of course they were summarily rejected by Ministers.

The issue of pub companies was raised at the end of our debate. Labour has consistently called for a statutory code to give pubs the protection they need and ensure that landlords get a fair deal. Ministers have dragged their feet on this issue for more than three years, during which time hundreds of publicans have lost their livelihood. We are pleased that the Government have now accepted many of the arguments that they repeatedly vetoed in the House of Commons, but we fear that the watered-down reforms will not address the large increase in pub closures that we have seen. The changes that Ministers have announced do not include a free-of-tie option or the genuinely independent rent reviews that Labour and campaigners have been calling for. Instead, the proposed code includes parallel rent assessments, which will give tenants greater information but not the right to exit the beer tie.

We welcome the measures on late payment. Ministers have repeatedly promised to tackle this scandal, which severely affects the cash flow of small firms. The previous Labour Government legislated so that late payments at least incurred interest; alongside that, they established the prompt payment code. However, we want to see greater transparency to help to prevent late payment, including through reporting requirements on payment performance in companies’ accounts.

On business lending, any scheme that helps small businesses to access finance is welcome, but the record of the Government in getting the banks to lend to small businesses has been one of complete failure. Every scheme, from Project Merlin to Funding for Lending, has completely failed to deliver. Figures published this week show that in the first quarter of this year net lending to SMEs by Funding for Lending participants actually fell by £700 million, and in the past year net lending to SMEs has fallen by £3.2 billion. The press notice says that the main purpose of this Bill is to,

“build a stronger economy by supporting small business as they compete”,

but it is hard to see where the real needs of the majority of small businesses are being addressed.

The world is changing faster than we can comprehend with global economic forces moving south and east. This is creating huge opportunities in a world where the global middle class is expected to treble to 5 billion people in the next two decades. So surely what we needed in this Queen’s Speech was a Bill that would transform our economy and back our businesses to make the most of the new opportunities there so that we can innovate and grow our way to higher standards of living for all our people.

I absolutely accept, and I am sure it is common ground between the parties, that the 2008 crash exposed long-standing structural problems in our economy. The economy was unbalanced by sector and region, short-termism in our corporate culture led to low levels of business investment and low productivity, and a dysfunctional finance system and a stubborn and increasing trade deficit all did their work.

Although some growth has finally arrived, as my noble friend Lord Liddle said, it is not the balanced and sustainable growth we need, so prices are still rising faster than wages and the continuing cost of living crisis for many means that individuals are, on average, £1,600 a year worse off compared to 2010, so business as usual is not good enough. To set the foundations for future success, we need to take a different approach.

The noble Lord, Lord Higgins, challenged us and said that we did not have a strategy for the economy, but Labour has a long-term plan to earn and grow our way to higher living standards. Our goal is a high-productivity, high-skilled, innovation-led economy. To get there, we absolutely accept that we need more British-based businesses creating good jobs, investing, innovating and exporting.

If elected in May 2015, we have already announced that we will take action on immediate pressures that businesses face. We will help 1.5 million businesses by cutting business rates in 2015 and freezing them in 2016. We will reform the energy market to put transparency and competition back into the industry, as well as freezing energy bills until 2017, saving the average business £5,000. We will boost real competition in the banking sector. To lay the foundations for long-term success, Labour’s plans include radically reforming vocational education and apprenticeships putting employers in the driving seat, creating a higher skilled workforce, driving up productivity and underpinning higher wages. We will support lending to businesses by creating a proper, independent British investment bank and a network of regional banks with a responsibility to boost lending in their direct area.

We will support green growth by backing the 2030 decarbonisation target, giving the Green Investment Bank borrowing powers and prioritising investment in science and our innovation system. We will establish a small business administration to champion small business at the heart of government. We will devolve powers to cities and regions to boost growth and rebalance the economy, allowing local knowledge to solve local problems and we will encourage longer-term decision-making in business and government through rules and incentives for business that reward a longer-term focus, and an ambitious industrial strategy to support long-term growth.

It is clear from the recent election results that too many people do not feel a sense of personal or community well-being. They feel insecure and ill equipped to deal with change and harbour a deep sense of unfairness. Like my noble friend Lady Sherlock, I feel that the gracious Speech failed to respond to the needs of the people for security, fairness and stability. What we need is a legislative programme that will tackle the challenges ahead to restore real growth, tackle debt and build an economy that works for all our people, not just for those at the top. With this Queen’s Speech, the Government had an opportunity to respond to some of these challenges, but I fear that that they have failed to do so.