Queen’s Speech

Lord Haskel Excerpts

Tuesday 10th June 2014 Lords Chamber

[Lord Haskel (Lab)]

My Lords, when opening this debate, the Minister said that his proposed legislation would encourage trust. I am very glad he said that because during April there were two popular polls about people’s trust in business, one for the BBC and one for the Financial Times. Both said that 61% of us did not trust business. I am not making a political point. Half of those who felt this way identified themselves as Conservatives. The Minister is right: there is a warning there that it would be wrong of us to ignore.

Most of us know why this is happening. My noble friend Lady Donaghy just said that it was to do with conditions of employment. For years, some of us have been victims of mis-selling by the banks. We have not been getting a square deal from energy companies. As my noble friend Lady Hayter told us, we have not been getting a square deal from landlords. We have not been getting a square deal from rail operators or pension managers and suppliers of public services from the private sector have been disgraced. This is in contrast with booming executive pay and a long line of companies which arrange their affairs so that they almost cease to pay corporation tax, leaving the rest of us to foot the bill.

My noble friend Lady Sherlock reminded us in her opening speech that for years there has been little alignment between the financial markets, our long-term interest, jobs and the common good. This dissatisfaction applies to Government too. As problems arise, so they are dealt with on an ad hoc basis, reacting to events—or to labour policies. This is what my noble friend Lord Liddle called a disparate agenda. This fiddling only adds to uncertainty. It also contributes to the complexity and inefficiency of our public finances. Noble Lords can read the whole depressing story in the recent Institute for Fiscal Studies paper, Tax Without Design.

What can we do to help bring back public trust in business? The answer lies in an intellectually coherent strategy that provides a framework for all of these activities. In his memorable maiden speech, the noble Lord, Lord Bamford, called it a coherent industrial strategy, and I agree. It provides a basis for long-term decision-making. BIS likes to think that we have a long-term strategy, but that is news to everybody else. To succeed, this strategy has to be respected. To make sure it is adhered to throughout government, I would like to see it enshrined in law. We have laid out a strategy in law for health, for climate change, for education and for austerity for our public finances, so why not for business?

What should this business strategy—a strategy with teeth—contain? In part, my noble friend Lord Liddle told us when he called for a comprehensive ethical agenda. We know that most business leaders are committed to high ethical standards: they know that this builds trust. The problem is to convince and communicate this to everybody else in their organisations. Well, there are UN global guidelines that respond to this. Those guidelines, as part of a business strategy in a legal framework, will help rebuild trust in business. We are virtually having to do this with the banking industry.

Quite rightly, business organisations call for certainty so they can plan for the longer term. This means that long-term institutions, such as the Technology Strategy Board, which is so important in developing the technology that the noble Baroness, Lady Wilcox, told us about, have to be given protection of law so that, like the RDAs, they cannot just be abolished on a whim. Part of the answer is not just to regulate, but to rebalance.

Whatever the outcome of the Scottish referendum, surely significant to all of us is the need for more local accountability, which means getting away from the culture of doing deals with central government. I join the Public Accounts Committee in asking why, of the £309 billion set aside by the Government since 2010 for promoting growth in the regions, only £400 million has been allocated. The noble Lord, Lord Heseltine, in his paper, No Stone Unturned, speaks to this. We see many contributing to economic progress, but fewer benefiting. A proper, legal industrial strategy will help us break free from markets that work only for themselves. The noble Lord, Lord Tugendhat, spoke about this. Read the speeches made by the Governor of the Bank of England to the recent inclusive capitalism conference: that will convince noble Lords, even if I do not.

Public investment must also feature, as the noble Baroness, Lady Sharp, just told us. After all, we know, on very good authority, about the benefits of public investment in science. Of course, the strategy must also protect the public interest, by, for instance, stating clearly that tax allowances and incentives are for investment, not for financial dodges. The gracious Speech mentions fair pay and job security, and yes, the Government are trying to stimulate manufacturing, which is so important to the right reverend Prelate the Bishop of Durham. However, all of this is insufficient, random and, most importantly, it lacks coherence.

What about the politics of this? A strategy of this kind reflects the politics of hope. It challenges the insecurity created by blanket austerity. It connects with Europe 2020 and completing the single market. It puts immigration into a non-racial context. Most importantly, it faces up to the huge scale of the challenge facing us, instead of just tinkering with it. Of course, no law will build economic revival and growth—business will. However, the task will be infinitely harder if we fail to win back that 61% of the population who no longer trust business. I am certainly content with the Motion to thank Her Majesty for the gracious Speech, but like many noble Lords—some of whom I have mentioned—I regret that it does not contain an industrial strategy. That will obviously have to be left to a Labour Administration.