Queen’s Speech

Baroness Turner of Camden Excerpts

Monday 13th May 2013 Lords Chamber

[Baroness Turner of Camden]

My Lords, I have decided to speak in this debate because I feel that many of the problems that we all face stem from the policies on the economy. We all know what the problems are—unemployment, declining living standards, public sector cuts and general feelings of dissatisfaction that became manifest during the recent elections. It is now generally accepted that we need growth and that the economy needs to be rebalanced. The lack of balance is obvious in the growth of the south-east compared with the decline in the Midlands and the north. Areas where once mining, steel and shipbuilding provided often highly skilled employment to the local population are instead now areas of high and continuous unemployment.

My own union, Unite, has frequently drawn attention to the need for government policies to do more to support manufacturing industries. It says that while Britain remains an engineering powerhouse, it is suffering from a crumbling infrastructure, a growing skills shortage and years of neglect from successive Governments, particularly that of the Thatcher Administration. There is concern that manufacturing is not now showing the growth that is required. Unite believes that this is because of subdued domestic demand, particularly in the construction industry. The cutbacks in public expenditure have also had an impact on manufacturing.

The union calls for an active industrial strategy to be developed, similar to that already existing in Germany. There is now apparently an increased interest in the German strategy, with the New Statesman devoting its recent issue to the subject, while today we have had well informed contributions on the same subject from the noble Lord, Lord Tugendhat, and my noble friend Lord Monks.

Unite also draws attention to the relative success of the automotive industry in the UK, where the Automotive Council, which involves the union, works extensively to promote the industry. It also believes that there should be a strategic investment bank. The Government have of course committed themselves to the establishment of a Green Bank, but a strategic investment bank could provide access to funding for innovative companies, including small businesses. The contribution that unions make to the training of their members is often overlooked. The TUC has always had a skills training programme called Unionlearn, and refers to this in its current statement on the economic situation.

During the previous Session of Parliament we considered two pieces of legislation that one might have thought would have addressed some of these problems: the Growth and Infrastructure Bill and the Enterprise and Regulatory Reform Bill. Both have now been accepted by both Houses, but both contained provisions weakening employment rights, making it more complicated and costly to sue for unfair dismissal, changing legal requirements relative to accidents and illnesses through work and making it more difficult for workers to obtain compensation. Then there was the peculiar provision whereby workers surrender employment rights, fought for by previous generations, in return for shares. I and a number of noble Lords opposed those provisions—unfortunately, without success. The Government appear to believe that a system in which workers are regarded as disposable—hired when needed and sacked without rights when no longer required—will improve the economic situation. I think that they are wrong. The support of the workforce is necessary if companies are to succeed. Will Hutton, the director of the Work Foundation, put it very well when he said that,

“it is only through workforce engagement and commitment that successful innovation can be achieved. Care must be taken to ensure that procedures and processes embody fairness—in performance management, in promotion, in setting bonus targets, and in resolving disputes. In this respect trade unions can be important custodians of good faith processes, and as communication routes that uphold the authenticity and integrity of management actions”.

Of course, trade unions insist on good pay and conditions. One of the problems about the private sector, where union organisation is low, is that the pay is too low as well. The benefits system is actually subsidising employers who pay low wages. That has an effect on the housing market too, where housing benefit has to be provided to ensure that families are not rendered homeless. We have discussed these issues in the House in the past, when I and other noble Lords have said that rents are too high and pay is too low. The TUC is calling for the introduction of the living wage, in the hope that this will lift families out of poverty.

These are all important aspects of the economic situation that we have been experiencing. The austerity measures that have been introduced and are continuing have not helped—indeed, quite the contrary. A determined effort by the Government is needed to introduce measures to stimulate the economy, particularly by assisting the financing of innovative companies in manufacturing and other industries that can contribute to growth.

The measures already taken in regard to apprenticeship training are welcome. These are necessary in light of the unacceptable level of youth unemployment. However, we probably need to go much further, particularly for vulnerable and poorer disadvantaged children. The role of unions in developing such schemes should not be underestimated.

We need to rebalance the economy. We cannot rely on financial services, important as they are, to produce the growth we need. The Government should reconsider their current policies. They need to change direction.