King’s Speech (4th Day)

Lord Udny-Lister Excerpts

Monday 22nd July 2024 Lords Chamber

[Lord Udny-Lister (Con)]

My Lords, I congratulate the noble Lord, Lord Vallance, on both his maiden speech and his appointment as Science Minister. Having worked with him in Downing Street, I cannot think of anybody better qualified to fulfil that role.

In the short time I have, I will draw on three areas: economic development, international trade regulation and the new national wealth fund. On international trade, it will come as no surprise that all the talk of resetting the UK’s trade and investment relationship with the EU has caused much concern that the new Government will seek opportunities to reverse the Brexit process and set the UK on a course for ever greater alliance with the European Union. I fear not only that any shift in this direction would undermine the democratic will that was mandated by the British people in 2016 but that ever closer alignment, particularly on regulation, would stunt the growth and innovation space that our businesses so desperately need against the backdrop of these most challenging economic circumstances.

I have long said in your Lordships’ House that excessive regulation strangulates our businesses from achieving their maximum output and I therefore caution the new Government to think carefully before locking the UK’s businesses into new and excessive EU regulation. If His Majesty’s Government are sincere in their desire to secure the highest sustained growth in the G7, they must think seriously about the negative consequences that EU regulation has had on our businesses in the past and how the world is tilting towards the Indo-Pacific—we are, after all, now members of the CPTPP—which in the next 10 years will represent approximately 40% of trade, compared to the EU, which will represent only 18%. Greater alignment with EU regulations and rules, therefore, may not be in the best interest of the many thousands of SMEs which underpin the nation’s prosperity and ability to deliver future job creation.

The previous Government were committed to a global outlook when it came to international trade, and there remain many compelling reasons why we must continue to look outwards. In this interconnected world, the future prosperity of the nation depends on our ability to engage fully with the world. Now is not the time to become insular. We should be bold and pragmatic in our approach. I therefore hope that any trade strategy produced by the Government will seek to build on the time-proven principle that free trade is the mechanism that delivers growth and prosperity to our island home. Correspondingly, trade barriers and unnecessary tariffs work against efficiency and good value.

In the short time I have left, I also want to congratulate the Minister on his commitment to the new national wealth fund. However, £7 billion is a paltry sum. However, having been involved when working at No. 10 with getting the Treasury to commit £250 million to the joint life sciences fund with the UAE, I can only begin to imagine the battles that have already taken place and will, I am sure, come in the near future. Just to put it in a little bit of context, if I may, the UAE through its sovereign funds has already invested £16.5 billion in British infrastructure and companies, so we have a long way to go.

The new national investment fund must have a clear remit to match funding and use its leverage to encourage others to go into areas where they need to see some government commitment to both reduce risk and show commitment. That last point is so important. If the British Government will not show commitment to something, why on earth should an overseas sovereign fund start to show commitment to this country? We need to be able to put money on the table. The last Government’s investment was a good case in point, with the £500 million they invested in OneWeb when it was going under. The company was rescued because of that £500 million. The money that it was then able to raise, another £2.5 billion, was enough to save the business and, incidentally, the Government made money out of it.

In a year’s time, I hope we can see that the £7 billion, plus other moneys, have been deployed in areas where the private sector needed some support. I, for one, will not complain if sensible risk is taken and we do not get the results in the short term that we want, but I will be highly critical if, at the end of this term, we find that the investment fund still has money in the bank and has not been deployed.