Queen's Speech

Lord Haskel Excerpts

Wednesday 2nd June 2010 Lords Chamber

[Lord Haskel]

My Lords, I, too, congratulate noble Lords opposite. I wish them every success. I also welcome the fact that a new generation has taken over. This is particularly apparent to me because the people with the real power in this Government are the same age as my children. Of course, it is absolutely right that a new generation should take over but there is one thing that worries me. My children and their friends hardly seem to be able to organise themselves, never mind organise the country, so the more mature members of the Government—such as the noble Baroness, Lady Wilcox, who opened this debate with such skill—will have to practise both ministerial and other skills. Indeed, her magic is already working. Instead of fighting each other, the boys and their gangs are playing together. This calms everybody down—especially those who do not really want to play because they do not like the rules—so well done there.

Today’s debate is about business and economics, and I start with the politics of this. When we last had a Conservative Government—when I first came into your Lordships’ House—we were told that we had to choose between a strong economy and a fair society. The two were mutually exclusive. It was John Smith and new Labour that turned that argument on its head, and for 13 years we had a Government who believed in a strong economy and a fair society going hand in hand. Indeed, that is what brought me into politics, and that is why under Tony Blair and Gordon Brown this country has become more prosperous, better educated and a healthier, nicer, more tolerant and greener place to live. I say to my noble friend Lord Myners: yes, I am proud of that. However, what I want to know is: will this Government continue with this policy? Even in an age of austerity, it must be right.

Turning to banking, it is wrong to delay action in favour of a technical review. During the election campaign one thing that came over strongly was how angry people are at having to bail out the banks and the effect that that has had on the real economy. The election may have toned it down, but the anger is still there and it will come back with compound interest. Inevitably, that will lead to a sense of betrayal. Wholesale reform is required now, not reviews and tinkering with regulation.

The coalition agreement has quite a lot to say about regulation and red tape. All new Governments start with a promise to cut red tape and regulation, but this Government promise to cut it and introduce new regulation at the same time. On the page of the coalition agreement which promises cuts, we are told that the banking regulatory system will be entirely reformed and bonuses will be regulated. My noble friend Lord Myners spoke about that. We are told that regulators will have new powers to define and ban excessive interest rates on credit cards and other examples are scattered through the document, such as the right to request flexible working and equal pay. I hesitate to ask how all this will operate with the one-in one-out rule, especially when the public use their promised right to challenge regulations. In reality, you have to deal with market failure; that is what you want the citizen to tell you about. Of course, poor and outdated regulation needs to be cut, but the real threat to innovation and enterprise is the absence of competition through unregulated market failure. By concentrating on the populist and ignoring the important, the Government have got this the wrong way round.

Innovation and enterprise brings me to the business section of the coalition agreement, where there are indications of some of the ways in which the Government will help business, but on the overall context within which business operates the paper is silent. Will we continue to be a champion for open markets and, if so, how will we achieve this when we all agree that economic power is moving east? Although these new strong economies have joined the G20 to play by the existing rules, we know that their participation is about writing new rules. Unless those rules create a level playing field, our commitment to being an open market champion could make us very vulnerable. I think we should know what the Government's views are on world trade.

Perhaps the Government do not really care. In spite of their fine words, maybe the Government have no confidence in British business and industry. After all, on page 7 of the coalition agreement, they refer to it as “rubble”. We have many fine businesses in this country—my noble friend Lord Bhattacharyya listed some of them—and to refer to them as “rubble” is a disgrace. That is yet another example of this Government's apparent fondness for running down Britain. I am sure that many noble Lords opposite feel rather embarrassed about that. We all go into politics to make a difference and I hope that this coalition will make a difference, not just to the country, but for the country.