Queen’s Speech

Baroness Noakes Excerpts

Monday 16th May 2022 Lords Chamber

[Baroness Noakes (Con)]

My Lords, it is a pleasure to follow my noble friend Lord Young. I agree with what he said on road pricing, although I suspect there will be several more Queen’s Speeches before that sees the light of day.

The gracious Speech contained a number of Bills designed to underpin growth in the economy, as a number of noble Lords have pointed out; I certainly support that aim. I also support the majority of the Bills, although some will need careful scrutiny. My litmus test for any legislative programme is that it should have less intervention by the state and more encouragement of private sector enterprise. At first sight, not all the planned Bills pass that test with flying colours.

Noble Lords will not be surprised to find that I warmly welcome the Brexit freedoms Bill. However, I have to say that I felt rather world-weary when the gracious Speech announced that business regulations

“will be repealed and reformed.”

We have heard all that before. Fundamentally, the business sector wants to be left to get on with the job of creating wealth and jobs. That means fewer regulators, fewer regulations and less invasive regulation. I shall be delighted if the Government really deliver a paradigm shift this time, but I am not holding my breath.

Creating growth in the economy is the only way to escape from the economic position in which we find ourselves. The Government’s policies on Covid have left us with significant levels of debt, as well as an NHS backlog that will be expensive to deal with. As we have heard, the Government’s task was made much harder by the emergence of high and persistent inflation. There was nothing in the Queen’s Speech on the impact of inflation on the cost of living, but more action will undoubtedly be needed.

My right honourable friend the Chancellor of the Exchequer has no easy options. Debt is already too high. Equally, the tax burden is far too high, and we need tax cuts rather than more taxes if we are to create an environment that encourages investment and growth. The Chancellor will be well aware that windfall taxes are not problem-free solutions, as they undermine our attractiveness as a destination for inward investment.

The Labour Government handed monetary policy over to the Bank of England 25 years ago and told it to keep inflation low. The Bank of England has failed in this core mission. Global central bank groupthink has kept quantitative easing in play for far too long, and loose monetary conditions have led to the inevitable rise in inflation and the spectre of a wage and price spiral, as a number of noble Lords have identified. The Governor of the Bank of England was tone-deaf when he suggested that people should not expect wage rises to cover inflation. He needs to get out more and understand how precarious the finances of many people in this country are.

Over the last 25 years the Bank has been loaded with many extra tasks. It has also accumulated extra objectives, the latest being to assist in the transition to net zero. It is perhaps not surprising that the Bank of England has lost its way. Central bank independence will be a policy failure in the UK if it continues to exist without proper accountability, and I suggest that the Government really need to start to focus on this.

This brings me to the financial services and markets Bill, which I am looking forward to scrutinising—although my noble friend Lady Penn may not welcome that. Those of us who took part in the last Financial Services Bill know that there is a big outstanding issue of securing proper parliamentary scrutiny of the actions of the Bank when it gets additional rule-making powers as part of the repatriation of powers from the EU. The Bank’s failure to deliver its core inflation mission highlights that we need a wider debate during the passage of the Bill about the accountability of the Bank and how best to achieve it. We cannot simply trust the Bank to get things right.

There were many things that should have been in the Queen’s Speech but were not. The one thing I particularly regret is the lack of commitment to a radical simplification of our ramshackle tax system, but in view of the advisory time limit, that will have to be a speech for another day.