Queen’s Speech

Baroness Wilcox Excerpts

Wednesday 16th May 2012 Lords Chamber

[Lord Cope of Berkeley]

That an humble Address be presented to Her Majesty as follows:

“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most Gracious speech which Your Majesty has addressed to both Houses of Parliament”.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, it is a privilege for me to open this debate, which my noble friend Lord Sassoon will wind up later today—much later today, because 58 Peers are down to speak.

I look forward greatly to the maiden speech of the right reverend Prelate the Bishop of Durham. He brings a broad experience to this House and it will be very welcome to hear him give us some more information on that.

The measures laid out in Her Majesty’s gracious speech reflect the Government’s ongoing efforts to revive the fortunes of the economy, to create the best possible climate for business investment and to steer the UK firmly in the direction of growth.

As my colleague, the Business Secretary, pointed out in another place, the global financial crisis destroyed roughly 10 per cent of our economy. Recovery to date has been slow and halting; ongoing turmoil in the eurozone will especially make further progress equally challenging.

We can look with some satisfaction to the creation of more than 600,000 new private sector jobs within two years, almost twice as many as have been lost in the public sector, and to today’s news that unemployment is falling. That is heartening, but there are still too many families missing a breadwinner. This, above all, is testament to the misguided economic stewardship of the previous Government. Theirs was a flawed approach, predicated on ever greater debt, overly dependent on an unstable banking sector and neglectful of manufacturing.

I regret, therefore, that the noble Baroness, Lady Royall, is moving her amendment. It is only two years since Labour was thrown out by the electorate. I echo the Prime Minister in noting that her party’s only solution to overborrowing, overspending and excessive debt is more of the same. We stand firmly by the measures we have taken to date: tackling the deficit, reducing burdens on business and maintaining low interest rates. This latest legislative programme is again focused on economic rebalancing, rewarding hard work and delivering sustainable growth.

At the same time, we recognise that simply passing more laws will not in itself create the change we need. The Foreign Secretary reached the heart of the matter in today’s Times:

“Governments never have and never will create wealth solely through their own efforts. We can pave the way, but it will be talented and hardworking British people and companies who propel our country towards a prosperous future”.

I intend to devote much of my speech to those Bills which focus most directly on addressing that issue, although I will also cover key measures, including pensions and local government. Under the banner of the enterprise and regulatory reform Bill, we are promoting the UK’s transition to a green economy. The UK green investment bank—a global first—has initial funding of £3 billion to March 2015. Its mission as an independent institution will be to mobilise private finance in green infrastructure, helping to give UK businesses a head start in nascent markets.

Secondly, the Bill will tackle anti-competitive behaviour and ensure more open markets by establishing a new Competition and Markets Authority. Assuming the functions of the Competition Commission and the competition functions of the Office of Fair Trading, it will speed up existing processes within clearer time frames. Regulation is sometimes unavoidable, but it must never be excessive. Some burdens will be entirely done away with under this Bill; others may face sunset clauses. In addition, we will extend the primary authority scheme, allowing more businesses—especially SMEs—to access consistent advice on specific regulatory issues. The new arrangements will save many more small businesses from time-consuming, and often duplicative, inspections.

Many SMEs also regard the current operation of employment tribunals as a disincentive to expansion and hiring extra staff. We agree that it is absolutely necessary to protect people from abusive employers and no measures in this Bill will dismantle those protections. It is also important, however, that where disputes do arise, employers and employees receive help to resolve them without facing the costly and time-consuming employment tribunal process. I trust your Lordships will agree that this objective can be best achieved through helping parties to settle any dispute before a tribunal claim is lodged. We will encourage greater use of settlement agreements and streamlining the tribunals process itself, including a new rapid resolution scheme.

A similar desire to improve the lot of small businesses informs the Groceries Code Adjudicator Bill, designed to protect their interests as supermarket suppliers. Retailers, of course, should not be prevented from securing good deals on behalf of consumers, but nor should they be able to take unfair advantage of farmers and other small suppliers. I know that noble Lords on both sides of this House are eager to see the adjudicator introduced.

The adjudicator will have the powers necessary to uphold the code. As importantly, he or she will support investment and innovation in the supply chain by stopping supermarkets passing on excessive risk and costs to suppliers. That means serving the long-term interests of consumers and the economy, in which agriculture and food manufacturing are major segments.

This wish for business to be both successful and responsible explains another section of the enterprise Bill. In this case, we are seeking to re-establish the link between performance and reward at director level. In March, we issued proposals on giving shareholders binding votes on directors’ pay, and invited comments. We are now considering the consultation responses.

Britain needs a resilient banking sector that lends to productive business in the real economy. Our conclusion, following the independent commission led by Sir John Vickers, is that essential banking services must be ring-fenced from other activities and that insured depositors should have priority over unsecured creditors in cases of insolvency. The banking reform Bill will make these changes to foster financial stability and achieve a more resilient banking sector. The retail ring-fence will separate the vital services on which households and SMEs depend from more volatile wholesale and investment banking. This will insulate those services from the effect of shocks elsewhere in the financial system and ensure that if banks get into trouble, problems can be resolved without taxpayer support. The Government will complete all primary and secondary legislation by the end of this Parliament, and banks will be expected to implement the ring-fence as soon as practically possible thereafter.

We are legislating in two other sectors of vital national importance. The energy Bill will reform the electricity market to guarantee supply, reduce emissions more cost-effectively and improve regulatory certainty by making government and Ofgem better aligned. It ensures that the Office for Nuclear Regulation will be able fully to meet the future challenges of regulating the nuclear industry, as the first new power plants since the 1980s are built. Overall, the Government want to see a balanced portfolio of renewables, including new nuclear and carbon capture and storage, with gas playing a role during the transition and as back-up. The draft water Bill, meanwhile, will increase choice for business and public body customers, meaning they can obtain more competitive prices and demand more tailored services. The existing competition regime for water supply will expand to cover sewerage and there will be greater opportunities for new firms to enter the water and sewerage market.

Perhaps your Lordships will allow me to conclude by highlighting three other elements of the Government’s programme. The Local Government Finance Bill, introduced in another place in the previous Session, will shortly be debated in your Lordships’ House. Creating growth, reducing debt and handing back power to local people are at the heart of this Bill. It will incentivise local authorities to go for economic growth by reforming the business rates system, make councils more accountable to taxpayers and give local authorities autonomy in providing for their most vulnerable people. The local audit Bill, which we are publishing in draft for consultation and pre-legislative scrutiny, includes proposals to abolish the Audit Commission and open up local public audit to the private sector. We estimate that this could save £650 million of public money over the next five years.

Finally, following the agreements reached with trade unions for the three largest unfunded schemes, the public service pensions Bill will deliver affordable, sustainable and fairer pensions, and ensure that costs and benefits between employers, workers and other taxpayers are balanced more fairly. Pension benefits that have already been earned will be protected. These pensions will remain among the best available, continuing to provide guaranteed, index-linked benefits in retirement. Equivalent private pensions would cost around a third of an individual’s pay. Those closest to retirement will not see any change regarding when they can retire or any decrease in the pension they receive at normal retirement age.

The fundamental principles behind this programme are clear. As my right honourable friend the Prime Minister made clear in his reply to the debate on the Address in another place, this is a coalition Government prepared to confront the long-term challenges which this country faces. We are a Government prepared to roll up our sleeves and deal with the deficit. We are a Government determined to unleash the private sector, to encourage growth across our country and to sort out our financial services. We are a Government who back hard-working people. We are a Government acting for the long term and in the national interest.