Economy

Lord De Mauley Excerpts

Monday 7th June 2010 Lords Chamber

[Lord Haskel]

To ask Her Majesty’s Government what steps they are taking to bring more balance between different sectors of the economy.

[Lord De Mauley]

My Lords, our economy is indeed too narrowly focused on just a few industries and a few regions. Growth must be spread across the country, making full use of talent across the United Kingdom and across business sectors. The Government’s central task is in fostering the right conditions for business and innovation to succeed. In specific answer to the noble Lord’s Question, we are carefully considering the recommendations made in the Dyson review: improving the current system of financial regulation, halting the rise of red tape, supporting apprenticeships and creating a green investment bank.

[Lord Haskel]

I thank the Minister for that response. Is he aware that, three days after I put this Question down, the Prime Minister rushed off to Yorkshire and made a speech exactly on this topic? Does that demonstrate the power of Question Time in the House of Lords or the urgency of the issue? In his speech in Yorkshire, the Prime Minister used many fine words such as “supporting growing industries” and providing the,

“long-term … support our economy needs”.

Can the Minister explain exactly what those words mean in terms of government action?

[Lord De Mauley]

My Lords, I congratulate the noble Lord on being so prescient. As he identified, the Government believe that we need to reduce our reliance on one or a small number of sectors, particularly the financial sector. The most important element will be to foster and encourage technology, especially high-tech manufacturing, an area in which I know the noble Lord takes a special interest. That is why we commissioned the Dyson report, which identified five key challenges for government, including the education of scientists, engineers and technicians, exploiting knowledge better and financing and supporting high-tech businesses, which the Government are examining closely. No one suggests that this is going to be easy. We have already announced a number of reforms to simplify business taxes and to reduce red tape, which are critical to encouraging and helping business.

[Lord Razzall]

My Lords, does the Minister accept that when the noble Lord, Lord Mandelson—whom I understand we now have to refer to as the third man—held office before the election, he produced a huge number of initiatives aimed at many of the things to which the Question asked by the noble Lord, Lord Haskel, directs itself? Would he think it helpful if the Government could quite soon indicate which of those initiatives they propose to cancel or retain?

[Lord De Mauley]

My noble friend is quite right. On 17 May, the Government announced that a separate review process is under way to examine spending commitments made since 1 January. It includes some of the projects to which my noble friend referred. Where projects are good value for money and consistent with the Government’s priorities, they will go ahead. Where they are not, it would be irresponsible to waste money on them. The Treasury has been asked to fast-track a decision to give clarity as soon as possible to the companies and the work on which they are focusing. A decision is expected soon.

[Lord Kinnock]

My Lords, can the Minister tell us whom we should believe, especially in view of the impact on the economy and employment of government policy on public expenditure? Should we believe Mr Clegg, who says that there will be no going back to the days—as he put it—of Thatcher, or Mr Cameron, who tells us that the cuts are going to be so savage that they will change the way in which we all live? Which of them is telling the truth, because they are opposites?

[Lord De Mauley]

My Lords, the noble Lord, Lord Kinnock, will not be surprised to hear that I do not necessarily agree with him. I respectfully suggest to him that his line of questioning on job losses, in particular, is somewhat flawed in that it ignores the near certainty that job losses on a massive scale will occur if cuts are not made because of the danger of rising interest rates and their effect on business.

[Lord Lang of Monkton]

My Lords, as the Minister addresses the difficult inheritance that he has to deal with, will he bear in mind the fact that the greatest imbalance in our economy is between the public sector and the private sector and that without a healthy and diverse private sector there can be no effective public sector? Will he ensure that this thought is kept at the forefront of his deliberations and those of his colleagues?

[Lord De Mauley]

My Lords, I could not agree more with my noble friend.

[Lord Myners]

Does the Minister expect to see the banking industry’s economic contribution grow or contract in importance?

[Lord De Mauley]

My Lords, the noble Lord, Lord Myners, has put his finger on a very important point. He is right to point out that it is important that the banking sector does not contract. We need to rebalance by bringing up manufacturing and other sectors.

[Lord Ryder of Wensum]

My Lords, further to the question posed by the noble Lord, Lord Kinnock, will my noble friend please clarify whether Portugal, Spain, France, Germany, Italy and Ireland have already announced or undertaken public expenditure reductions on a greater scale than we have here in the United Kingdom in order to address the public and the private sectors and to reduce our massive deficit?

[Lord De Mauley]

My noble friend is, of course, absolutely right.

[Lord Eatwell]

My Lords, does the Minister recall that the Prime Minister referred in his speech to the need to expand manufacturing industry? Does he agree with the Financial Times that the recent recovery in manufacturing industry—it is now growing faster than at any time since 1987—has been aided by the significant fall in the pound? Does he also agree that this illustrates the importance of maintaining demand to stimulate investment and growth?

[Lord De Mauley]

My Lords, I cannot find fault with the noble Lord’s argument that the fall in the pound has helped our exports. It is important that we maintain all efforts to promote our manufacturing industries and, indeed, exports.

[Baroness Howarth of Breckland]

By accepting that a great deal of effort needs to be made with the deficit, does the Minister not believe that there is some danger in setting the public and the private sectors against each other? There are many in the public sector whom the Government, and certainly their Liberal Democrat colleagues, depend on to deliver services to our most vulnerable people. What are the Government going to do to maintain that balance?

[Lord De Mauley]

My Lords, the noble Baroness is right that there is a balance. The public sector performs an extremely important function and nothing that the Government are doing should be taken to undermine that.