King’s Speech (4th Day)

Viscount Chandos Excerpts

Monday 22nd July 2024 Lords Chamber

[Viscount Chandos (Lab)]

My Lords, I enthusiastically welcome my noble friend Lord Vallance of Balham to this House and to the Government Front Bench and congratulate him on his inspiring maiden speech. I have high hopes and confidence in the ability of him and my other noble friends on the Front Bench—not least my noble friend Lord Livermore—and their colleagues in the House of Commons, to deliver on the excellent measures set out in the gracious Speech and those that will follow in subsequent Sessions of this Parliament. I should also, as a fellow but less distinguished recovering banker, congratulate the noble Lord, Lord Petitgas, on his admirable French philosophical maiden speech.

In its editorial last week on the King’s Speech, the Financial Times said:

“While the previous conservative administration generally believed in a small government, centred on correcting market failures, Starmer envisages the state as more of a force for good”.


If the Financial Times, which I generally revere, was trying, like some noble Lords opposite, to present the bogeyman of big government, I believe that it was drawing a false distinction. The new Government’s programme is based on impeccable social market principles, being centred on the market and intervening directly or indirectly through regulation only where there are market failures. The difference between this Government and the last is in the recognition of the sheer scale of market failure that needs to be addressed, and urgently, as well as in the competence and determination that will be brought to bear on these challenges.

Partnership with the private sector and private funding is, as my noble friend Lord Wood said, at the heart of the Labour Government’s approach, whether in housing, renewable energy, infrastructure or innovation. I will speak briefly about two aspects of this.

First, I welcome the national wealth fund and its sensible approach of continuity, which builds on the UK Infrastructure Bank and the British Business Bank. I was amused by the semantic grumbles of noble Lords opposite about it not being a sovereign wealth fund—not that many of the wider population would, quite sensibly, be alert to the finer points of this definition. I was amused by the irony that, if ever there was a period in which a sovereign wealth fund should have been established in the UK, it was during the Conservative Administration from 1979 to 1997, which coincided with the peak surplus from North Sea oil production. Instead, the revenues were frittered away and the exchange rate pushed to eye-watering levels, with unnecessary damage to UK industrial competitiveness. Economic mismanagement was not confined to only the most recent Conservative Governments.

I welcome too the proposed pensions Bill and the important reforms to the pension fund industry. These are vital, as my noble friend Lady Drake much more expertly spelled out, but if ever there was an area in which the devil is in the detail it is this.

The noble Lord, Lord Morse, struck a note of caution, with which I agree, about the difficulty of balancing the obligations of trustees and managers to deliver the best possible risk-adjusted returns through asset class and geographical diversification with the desire to encourage investment in UK companies and innovation. Although returns from private investment funds—from infrastructure to buyouts, from expansion to venture capital—can be superior to those from public market funds, the disbursement of those returns between different managers and funds is, according to authoritative Cambridge Associates data, much more extreme. It is hard enough to invest in these asset classes as successfully as, say, Wellcome Trust or the Yale University endowment, without any geographical or sectoral bias. We must be careful not to harm the overriding interests of pension fund members through well-intentioned but ill-judged private investments.

I therefore look forward to the Bill being brought forward for consideration by your Lordships’ House in due course, along with the other legislation to deliver this excellent programme for government.