Queen’s Speech

Baroness Jowell Excerpts

Wednesday 25th May 2016 Lords Chamber

[The Commercial Secretary to the Treasury (Lord O'Neill of Gatley) (Con)]

My Lords, it is a privilege to open this debate following Her Majesty’s gracious Speech last week. I thank in advance my noble friend Lord Ahmad of Wimbledon, who will be wrapping up the debate later today.

It has been a year since I had the honour of joining Her Majesty’s Government. In fact, it was the occasion of Her Majesty’s Speech that allowed me to deliver my maiden speech before noble Lords last year. That day, I spoke of my determination to put an end to the underperformance and wasted talents of our towns and cities beyond the capital, especially in the north. I said that I wanted to help the UK make the most of our relationships with the most important emerging economies across the globe. I also said that I would be continuing the work I started before I joined the Government to establish how the world ought to respond to the stark threat posed by antimicrobial resistance.

The rise of superbugs resistant to our current drugs is a huge problem, and one that is getting worse. If we do nothing, the human and economic costs will be dreadful indeed. In fact, as we have shown in our review, by 2050 superbugs could kill 10 million people a year—the equivalent of someone dying every three seconds. I am delighted to inform noble Lords that we published the recommendations of this review last week, setting out not only the areas where we need to take action but how we can pay for it. So on all these fronts, without doubt it has been a busy year for me.

The views of your Lordships—including at times robust ones—have been of considerable assistance to me throughout, because the issues that we have debated and discussed in this House are ones of genuine complexity. As noble Lords will be aware, there are no silver-bullet responses to such critical questions as how best we can strengthen our economy and plan ahead for the future. So I look forward to the discussions we will have over the course of today, and indeed this year.

I now turn to the measures set out by Her Majesty the Queen last week to reflect the determination of this Government to follow an economic plan that will lay the groundwork for the long-term good of the country. For me, there are three main parts to that plan. First, we need to strengthen our economy to guard against future shocks. To do this we must not only bring public finances under control but address some of the more persistent and enduring challenges we have faced in the UK, such as low productivity growth and our current account deficit, which I touched on earlier.

Secondly, we need to make the right investment choices now to keep our economy growing over the coming years and decades. Thirdly, we must continue to do more to give everyone in this country the opportunity to do well at all stages of their lives and in all parts of the UK.

Today we have the chance to take a broad look at the Government’s plans to achieve these three aims, particularly during the next legislative session, as we look at some of the measures being taken forward by the Treasury, the Department for Transport, the Department of Energy and Climate Change, the Department for Environment, Food and Rural Affairs, and the Department for Communities and Local Government.

I will start with the very foundation of our strategy for the future: the Government’s work to fix the public finances. There has been clear progress to date. The deficit as a share of GDP was at its post-war peak in 2009-10. The independent OBR currently forecasts that the deficit will be eliminated by 2019-20, so the UK can go into the 2020s with a surplus. However, despite the considerable deficit reduction achieved, our debt to GDP ratio still stands at a very high level—indeed, its highest level since the late 1960s—at 83.7% of GDP. Reducing this figure is important, and therefore aiming for a surplus remains the most sensible fiscal policy to prepare for the inevitable future economic shocks that will come our way.

This Government have repeatedly stated their commitment to making sure that we live within our means. That is why spending has been reduced to 40% of our GDP in 2015-16, compared to 45% in 2010-11. Welfare savings of £12 billion are being delivered, and a further £3.5 billion of efficiency savings will be made by 2019-2020 to make sure that the public get the highest possible value from every pound that is spent.

But while it is important to keep spending under control, that is only one part of a sensible economic plan for any country, ours included. On its own it is no guarantee of long-term security and prosperity. It is equally critical that we invest where investment is needed, and put the policies in place now that will unlock growth in the future. Indeed, we are accelerating capital expenditure of £1.5 billion to make sure that the public start to see the benefits of our investment somewhat earlier. We are also legislating to put the independent National Infrastructure Commission on a statutory basis. This will play a crucial role in setting out a clear vision of the future infrastructure needed to ensure that our economy is fit for 2050.

Beyond that, it is also worth summarising the main ways in which the Government are investing in the future. First, we are rebalancing the economy. Your Lordships will know by now, I hope, how strongly I believe in the importance of rebalancing our economy, so it will come as no surprise when I turn first to our plans to develop the northern powerhouse and the Midlands engine for growth, because I am clear that accelerating regional growth is one of the best policies to deliver game-changing benefits to the entire UK. That is why we are so focused on the north and Midlands.

We are making record levels of investment in the transport networks of these regions: over £18 billion in this Parliament. Let me add—I touched on this earlier in Oral Questions—that there are increasing signs of overseas private investment in infrastructure in those regions of the UK. We are also setting aside well over £0.5 billion to help small and medium-sized businesses. We are creating more enterprise zones, which have already attracted thousands of jobs and more than £1 billion in private sector investment. We are funding new flood defence schemes and improvements in educational attainment.

Secondly, I will touch on devolution, which is closely associated with this.

[Baroness Jowell (Lab)]

On the Minister’s point about educational attainment, does he accept that readiness for school in young children is one of the key indicators of subsequent achievement? Does he share my concern that, last September, 40% of children starting primary school for the first time were deemed to be unready for school? That is the most likely predictor of subsequent educational failure. Will he share with your Lordships’ House how he intends to address that as part of the wider commitment to maximising educational attainment?

[Lord O'Neill of Gatley]

My Lords, the noble Baroness raises a very interesting point which should perhaps be discussed later or looked at in a separate debate in this House. I would say that there are considerable data about many challenges here. Specifically as it relates to the northern powerhouse, for example, an interesting oddity in contradiction to that piece of evidence is that primary school attainment in places such as the north is not so dissimilar to that in London and the south-east. It is at the secondary level of education where the relative gap emerges. That is a topic worthy of considerable discussion in this and the other place.

Let me return to the issue of devolution. It is important not just in terms of what we spend or how we spend it but what we do to give local leaders more influence, along with greater accountability. Your Lordships will have followed the historic devolution deals and will know of my great personal involvement in them. We are very proud of that over the past 12 months in cities across the UK. At its highest level, that means that we are introducing elected mayors, including in my own home city area of Greater Manchester. Elected mayors are important because they provide the accountability needed if the fullest level of devolution is to be granted. This remains the Government’s direction of travel. The local growth and jobs Bill will allow the local government sector to retain 100% of its business rates to boost growth in local areas, with the Greater London Authority, Liverpool and Manchester piloting the way forward.

Transport is another essential way to prepare for future growth: making sure that we have the transport infrastructure in place that will support and enable it. In this Session, we will see the passage of the HS2 Bill through this House, following its receipt of a resounding majority in the other place.

Passenger demand for rail has more than doubled since privatisation in the 1990s, and it has risen even faster on certain popular intercity routes. So by linking London with the major cities of the north and Midlands, and freeing up considerable capacity on the existing rail network, HS2 will give us the space that we need to meet growing travel demand, which could not be possible through upgrades to existing lines alone. We have also given the green light to dramatically improving train journeys between Leeds and Manchester.

We will improve our buses through the Bus Services Bill. This will tie into our devolution agenda by giving more powers to local authorities to set the standards of service in their areas, as well as better informing passengers. Lastly, the modern transport Bill could change the face of transport both for the individual person and for our businesses. Whether that is the development of commercial spaceports, getting driverless cars on the road, or enabling deliveries by drones, this is a Bill which will support the emergence of exciting, cutting-edge technologies.

As I also mentioned, it will all be about helping people to get on in their lives. That is the final aim that I would like to touch on. From childhood, through their working lives and on to retirement, our aim is ultimately to help British people to get on in their lives. That means building our economy based on lower taxes, helping people to take home more of what they earn. That is why, of course, the personal allowance has been increased to £11,500 and the higher rate threshold will rise to £45,000 in 2017. Over the course of this Parliament, those measures will take over 1 million taxpayers out of income tax, and will see over 500,000 fewer people paying the higher rate.

This year also saw the national living wage come into effect, which will benefit over 1 million workers, with a full-time national minimum wage worker earning £900 more a year. We also want to provide better choice and flexibility over saving, as well as more incentives to do so. The lifetime savings Bill will introduce the lifetime ISA to help young people in this country to save for their future. It will also bring in another important government-backed savings scheme, help to save, designed to help people on low income save for a rainy day.

Her Majesty’s Speech also outlined our commitment to investing more in the health of our young people. Sugar consumption is a major factor in childhood obesity, and our soft drinks industry levy will mean more funding to support things that will help, not harm, young people, whether that means more money for physical education in schools, or getting children to have a nutritious start to the day at a breakfast club.

Lack of housing remains an important issue for people in this country, and we are investing billions in housing over the next few years, including in what will be the most ambitious affordable housing programme since the 1970s. The neighbourhood planning and infrastructure Bill will also be a crucial reform to building new homes, not only speeding up the planning process but giving local areas more of a say about planning decisions that will affect their neighbourhoods.

We also want people to have more rights as customers. That is why the better markets Bill will introduce legislation that will not only open up our markets and boost competition, but also give people more power and choice to switch between, for example, energy providers, as well as more protection when things go wrong.

Finally, as noble Lords will be aware, grass-roots charities often perform a vital role in extending the support and help people need to get on in life. To support them in raising the most money they can to do this, we will be reforming the gift aid small donations scheme through our small charitable donations Bill, making it easier for new charities, as well as smaller charities, to get the funding that they deserve.

In conclusion, we will continue to take action to ensure security, sustainability and strength in our economy for the long term. That rests, without doubt, on our work to control public spending, but it is equally dependent on the success of our work to rebalance the economy, put in place the infrastructure we will need in the future and help people get on in life. The legislative programme for the next parliamentary Session, as Her Majesty’s gracious Speech set out, represents important steps forward in achieving these aims. I look forward to hearing noble Lords’ comments and views on them throughout today’s debate.