Autumn Statement

Lord Horam Excerpts

Thursday 4th December 2014 Lords Chamber

[Lord Horam (Con)]

My Lords, I congratulate my noble friend Lord Rose of Monewden—I hope I have pronounced that correctly—on his maiden speech. We will all be interested to hear from him on business matters. I understand that he also has experience of turning round failing hospitals. As a former health Minister I shall be very interested to hear about that as well.

As this is the last Autumn Statement before the general election, it obviously has more than a whiff of politics about it. As an economist and as a politician, I have sometimes felt torn in two by the conflicting priorities that these occasionally impose—but not on this occasion. For the first time, the Chancellor of the Exchequer has seriously hit the holy grail of economic policy, which is economic growth with low inflation. He has done that partly through his own efforts, which have been somewhat more Keynesian, as the noble Lord, Lord Desai, implied, than he might perhaps have thought earlier on. He has also done it because of the enduring legacy of the Thatcher and Major years.

My noble friend Lord Lawson of Blaby referred to those years, but did not mention that he himself played a central part in the microeconomic management from which we still benefit. Ed Conway, the “Sky News” economics editor, wrote in the Times the other day:

“Europe is still awaiting its Thatcher moment”.

That is because of the regulations and problems of the labour market which are still prevalent, particularly in southern Europe. Even Germany has problems because it is still waiting for its Keynesian moment. It does not understand that there has to be some expansion from time to time in order to get the economy going. Believe you me, if you are in the eurozone and you have not had a Thatcher moment and you still have not had a Keynesian moment, you are in real trouble. That is the difficulty they face—and it will impinge on us in due course.

I welcome particularly the centrepiece of the Statement about infrastructure development. As a former transport Minister, I welcome the points about roads and railway development, although, as the noble Lord, Lord Adonis, rightly pointed out, under both Governments, far too often these have been stop-start projects. We should not forget one thing, which is that we have done particularly well on broadband. When this Government came to power, the UK was one of the worst countries in western Europe for broadband development; now we are the leader. That is a very good example of how government policy should be conducted.

Also in the context of infrastructure development, as a Lancastrian I particularly welcome the emphasis on the north of England. The HS3 project has everything going for it and makes total sense. I hope that my noble friend Lord Deighton is listening carefully: I hope that the Government will proceed with HS3 whatever happens to HS2. HS3 should take priority because it is good value for money and makes sense.

I think that we should proceed with fracking in a sensible way, while obviously taking the environmental concerns into consideration. Jim Ratcliffe, a fellow Lancastrian and the founder of Ineos in Scotland, took the right approach when he said that we should increase greatly the amount going to local communities as a benefit from fracking. He proposed that 6% of the revenue sales should go to local people, 4% to the owners of the land and 2% to the communities. That compares dramatically with the figure of 1% which the Government are proposing at present. If we are going to get going on fracking, we have to do something dramatic. Cheap energy is the new cheap labour. Now that China’s wage levels are coming up to ours, cheap energy is absolutely crucial and also has geopolitical implications in terms of the new Cold War with President Putin in Russia. This is something of vital importance which I hope the Government will focus on.

Finally, I will say something about low pay, which has rightly been mentioned by a number of noble Lords opposite. It has been reported that at the moment there are some 300,000 people in this country who have a job but are not getting even £6.50 an hour for it. That is a scandal. When Frances O’Grady, the general secretary of the TUC, recently came to speak to Conservative Peers, I asked her what should be done about this issue. She said that the first thing we have to do is enforce the minimum wage provisions. That is not being done as extensively as it should be in this country. I hope that the Government will listen to what Frances O’Grady said because she is a very sensible woman.