King’s Speech (4th Day)

Lord Callanan Excerpts

Monday 22nd July 2024 Lords Chamber

[Lord Callanan (Con)]

My Lords, I welcome the noble Lord, Lord Vallance, to the Dispatch Box and congratulate him on his maiden speech. Almost all of us have made a maiden speech in this House and some of us have also spoken from the Dispatch Box, but few of us have made our maiden speeches at the Dispatch Box. It is a nerve-wracking thing to do and those who have done it will have been impressed by the noble Lord’s coolness and humour—what we old Brussels hands would call his sang-froid.

The noble Lord, Lord Vallance, was a reassuring presence on our television screens during the pandemic. He was calm, informed and, not least, neutral and impartial. Of course, he has now given up that neutrality and impartiality, becoming the latest in a long line of public officials to join Labour—what I believe is known in Whitehall as “doing a Sue Gray”. Let me say that over the seven years that I spent in government, covering three departments, I worked with many fantastic officials whose neutrality I never had cause to doubt. I know from talking to many of these officials that many senior civil servants are uneasy, to put it mildly, about how easily some of their ex-colleagues become party political the moment they leave the service—although, in fairness, not Sue Gray, who became party political before she left the Civil Service.

I seem to remember the noble Lord, as Chief Scientific Adviser, recommending that Britain restore lockdown measures in December 2021, a call echoed at the time by the Labour Party. Luckily, those calls were ignored and in the event SAGE’s alarmist predictions of up to 6,000 more Covid deaths per day were shown to be utter nonsense. It was a moment that comes very rarely in politics, when two alternative policies can be tested against events. One of them was shown to be nonsense. There will doubtless be times when we revisit these moments across the Dispatch Box. For now, I welcome him and wish him well in the important job that he is undertaking on behalf of the Government.

[Noble Lords]

Oh!

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[Lord Callanan (Con)]

My Lords, let me to this unusually full gracious Speech—bulging, we might almost call it—which contained a great many measures. Your Lordships are going to be kept very busy indeed because, given the size of the Government’s majority in the other place, I am not sure that there will be much critical scrutiny happening. However, like everyone else in this House, I am sure, I really do want Britain to succeed. That means that we want the Government to succeed. We on these Benches will support any measure that advances the goals which we share—above all, the Government’s stated priority of boosting economic growth.

We know what brings growth. It is sound money—I was pleased to hear the noble Lord’s commitment to sound finance—a balanced budget, competitive taxes, a strong private sector, light but effective regulations, public services that deliver for those who need them, a world-class education system and free trade. Almost all of us can agree on those things, but delivering them means making tough choices rather than just talking about tough choices. Only yesterday, we heard the new Chancellor hinting that she would roll over at the first signs of militancy from the public sector trade unions. That “tough choices” rhetoric lasted all of a fortnight. Labour has promised not to raise taxes on working people, and that is good. Let us see how it works out in practice. The pandemic, even without the extra lockdown, pushed taxes to the limit. Bringing them down is a vital part of any growth strategy.

It is worth observing in passing that all taxes are, one way or another, paid by working people. A corporation no more pays corporation tax than your TV set pays its own licence fee. A bank no more pays the bank levy than your house pays council tax. All taxes are paid by human beings—whether directly or as employees, suppliers or customers. When taxes on savings or inheritance go up, the money, ultimately, always comes from working people.

Can we please be spared the tired cliché of, “Oh, dear, we’ve looked at the books, and things are worse than we thought”? It is worth reminding ourselves of the figures; the last time Labour left office, in 2010, employment was at 70.4%; now, when Labour returns, the figure has risen to 74.4%. Labour bequeathed the Conservatives 7.8% unemployment; the Conservatives are bequeathing Labour 4.4%. When my party took over, the deficit stood at 10.3%; as we leave, despite the pandemic and the energy crisis, it is 3.1%. Let us please not have any nonsense about uniquely difficult legacies or about things being worse than expected. According to the OECD, which has just upgraded its growth predictions, things are better than expected and Britain is outperforming every major European economy.

The question before us is: will the measures flagged up in the King’s Speech lift burdens from our productive sector or, indeed, pile them higher? Let us consider some of them; first, the Budget Responsibility Bill. The Conservative Government established the Office for Budget Responsibility in 2010 after seeing what happens when borrowing is pushed up. Its job was to provide independent analysis of the UK’s public finances; at the time, Gordon Brown had left us with a deficit forecast to rise to 11.8%. Now, to repeat, the deficit is 4.4% and is forecast to fall to 1.2% in five years’ time. But is it really for quangos to determine our fiscal policy? Is it not, in the end, the job of our elected colleagues, primarily in another place? There needs to be a balance, and I am not sure that granting ever more powers to the OBR gets that balance right. After all, who holds the OBR to account when, as frequently happens, it gets its advice wrong? I have no doubt that criticisms will be made of fiscal policy in the years ahead, but they should be made, in the first instance, in this Parliament.

As for the national wealth fund Bill, its name skates fairly close to breaking the Trade Descriptions Act. It does not create a sovereign wealth fund. Indeed, it is far from clear what it will do that is not already covered by the UK Infrastructure Bank or the British Business Bank that were both established and capitalised by the previous Government, and which are up and running and already investing in the green industries of tomorrow.

I was delighted to hear of the Government’s commitment to planning reform and new infrastructure, as we need both. This is not new: I was part of a ministerial working group in the previous Government trying to work on reducing those delays. I hope noble Lords opposite will not mind if I share one observation based on that experience: the only way to get things built quickly is to hack through the thickets of, first, judicial review and, secondly, excessive environmental regulation. We will see what Labour makes of those tough choices.

Taking tough decisions is not the same thing as talking about those tough decisions. Noble Lords opposite will remember opposing an amendment to the then Levelling-up and Regeneration Bill that would have unlocked 100,000 new homes, and Labour so far has been silent on whether it will use the powers in the Levelling-up and Regeneration Act to reform those bureaucratic EU legacy laws, environmental impact assessments and strategic environmental assessments. If it does, we will, of course, support it, but I predict that unless these particularly difficult issues are tackled—and they are difficult—we will not see infrastructure being built any faster.

The noble Lord referred to the employment rights Bill. I understand that some trade unions think that they hold IOUs for the financial largesse bestowed on Labour to pay for the election campaign, but the most basic employment right is the right to be employed in the first place, something that is ensured by our flexible labour laws.

The Blair Government understood this, which is why they opposed the EU’s attempts at the time to enforce job-destroying legislation on the UK. When I was an MEP, I was happy to work alongside the then Labour Ministers and Government to mitigate some of the worst effects. How sad it is to see Britain, outside the EU, about to adopt unilaterally that which the Blair Government opposed when we were still a member of the EU.

Businesses are already sounding alarm bells, warning against French-style trade union laws. Alex Baldock, the head of Currys, Matthew Percival, a director at the CBI, Rupert Soames, its president, and Archie Norman, chairman of M&S, are among the business leaders warning of unintended consequences and a loss of investment if we go ahead. There is no point in having generous workers’ rights if we have fewer and fewer workers in the first place. If we adopt French-style labour laws, nobody should be at all surprised if we end up with French levels of unemployment.

But I promised to be positive—

[Noble Lords]

Oh!

[Lord Callanan (Con)]

—about worthwhile reforms and I am delighted to see the audit reform and corporate governance Bill in the gracious Speech. I oversaw a development of these proposals when I was a BEIS Minister but, unfortunately, I failed at the time to persuade No. 10 that they mattered enough to make the legislative programme. It is good to see them back and I welcome them.

The lockdown is now three years ago and the global financial crisis is but a distant memory. The last of post-Covid inflation has ended, the deficit is falling, we are close to full employment and there is every reason to be optimistic about the future. If Labour can deliver on what it promised, grow the economy, tread more lightly and, over time, bring taxes down, it will have the support of this Front Bench.