Queen’s Speech

Lord Lea of Crondall Excerpts

Monday 13th May 2013 Lords Chamber

[Lord Lea of Crondall]

My Lords, as the first speaker from these Benches following the outstanding maiden speech of the noble Baroness, Lady Lane-Fox of Soho, I add that, as someone who has always been in difficulty in working my computer, let alone shopping online, I stand in awe of anyone in that line of business. Perhaps I can get some private tuition.

I welcome the role that the Bishops are taking on as the only territorial representatives in this House, as well as now having the financial expertise of the most reverend Primate the Archbishop of Canterbury, in both cases indicating a relationship to real people in real communities.

I wish also to refer to the highly political 16-minute speech of the noble Lord, Lord Forsyth. No attempt was made by the Whips on the government Benches to remind him that eight minutes had been advised. It was a 16-minute speech, and I trust that the government Chief Whip will now confirm that we can all have 16 minutes, especially in our case, as my noble friend Lord Bhattacharyya seems to have disappeared.

[Lord Forsyth of Drumlean]

My Lords, I am most grateful to the noble Lord. I think that I was interrupted, and also no time limit has been specified for this debate.

[Lord Lea of Crondall]

There is an advisory limit of eight minutes. I inquired and that was stated. I do not know whether anyone would like to confirm that that is the case.

[Lord Wallace of Saltaire]

My Lords, as the question has been raised, the Chief Whip gave the advice that if Members were to keep their remarks to eight minutes we would finish at 10 o’clock. I am advised that it is traditional in debates on the Queen’s Speech not to enforce the advisory rule, so it is entirely open to noble Lords still to be here at one o’clock in the morning if they so wish. However, if anyone were to go on for a very long period, I dare say that noble Lords would have ways of making their feelings on this known.

[Lord Lea of Crondall]

My Lords, I have no wish to produce the result whereby people are here at one o’clock in the morning. I simply say that I hope no one thinks that there is any discourtesy if, in the light of what has been said, one does not stick to eight minutes.

As my noble friend Lord Eatwell pointed out in his magisterial analysis of the short term, austerity will not improve our tax revenues, nor will it reduce our tax expenditures. There are perhaps three timescales over which one can analyse economic prospects: short, medium and long, by which I mean for the short term possibly three to four years, for the medium term 10 to 15 years, and for the longer term perhaps 20 to 30 years. The post-war architecture of the world economy—Bretton Woods and so on—goes back no less than 70 years. The IMF and the World Bank were the main institutions created at that time. Surprisingly—it is hard to think that it is true—the European Union in all its manifestations now goes back for the best part of 50 years. It is partly in view of the extraordinarily peremptory and dismissive speeches made by the noble Lords, Lord Forsyth and Lord Lawson, in recent days that I will concentrate on the second and third of those timescales.

Their recipe for leaving the European Union and indeed for the future of the nation as a whole is, in my view, catastrophic. It is going down an ideological road and is far from an objective analysis of our economy and our place in the world. It is also as far removed from pragmatism and empiricism as something that went on in the Labour Party in the 1980s, and that is where the Conservative Party will wind up if they follow that line. In the short term, it will be, as I said, catastrophic. Figures published today by the TUC, which has done some analysis of the statistics of the International Monetary Fund, suggest that by 2017 our per capita income in Britain will have increased by precisely 0.0%. I know it sounds extraordinary that a figure should be as precise as that but it works out that our living standards, our per capita income, in Britain will have risen by precisely 0.0% since 2008. Given the vast increase in the quantum of the top 1% and, indeed, 10%, that explains the deep cut in living standards for the median and the vast majority of the British people who, not surprisingly, are angry and disorientated as a result, and are prepared more readily to listen to sophists such as Mr Farage and others nearer to home.

I acknowledge that the EU as a whole has not had a very much better record, although perhaps I may draw attention to the fact that per capita incomes in the same series in Germany and Sweden—two examples of northern Europe—will both be projected to have risen by 10% in this period, a point to which I will return. In passing, I will also mention that on a couple of occasions I have asked my noble friend Lord Eatwell a rhetorical question about how we will pay for this, that and the other without increasing the deficit. The noble Lord, Lord Forsyth, says that we have to get on urgently with filling up the potholes. Perhaps he will pay for it himself but I assume that it will come out of public expenditure.

What is the bigger economic picture that we face in this country? Just to put the numbers another way, the loss of output in these 10 years below our earlier potential of roughly 2% growth per annum comes out at some extraordinary numbers. If you look at the cumulative loss against that trend, by the year 2017 it will work out at some £3 trillion—£3,000 billion. It will not be £30 billion or £300 billion but £3,000 billion. People can work it out for themselves. The noble Lord, Lord Forsyth, is looking puzzled but if he does a bit of mental arithmetic he will find that that is in the right ball park. I know he does not have time to work all that out in the time of my speech but perhaps later he will realise that my figures are accurate. We are talking about figures that are worse than the slump in the 1930s after the parallel banking crisis of 1929, from which we only recovered the full scale of our potential during the late 1930s and the Second World War, as, of course, did Germany and the United States.

As to my own prescription or views regarding these matters, I do not begin by wanting to be orthodox in terms of Labour Party policy. I do not think that that is the role that one is necessarily here to play. I am generally orthodox but I just should like to draw attention to one or two features of the trade deficit. It is not that we cannot grow our economy in the European Union. If the EU per se is the reason for some incompatibility because of so-called red tape, how is it that Germany, despite absorbing a very weak East German economy over the past 20 years, has a GDP per head of 121—if we put EU equals 100—while ours is 109?

Germany, of course, which relies much more than we do on something as old fashioned as manufacturing, is rarely mentioned by the new ideologues. They seem to think that there is something magic about the City of London. For every £2-worth of goods or services—in the statistics they come to the same thing—we now export, we import £5-worth. This is, in part, to do with our exchange rate. Of course we cannot go on devaluing the pound without our living standards falling. However, if we want to regain our competitiveness, I could argue at the same level of abstraction as the noble Lords, Lord Forsyth and Lord Lawson, who think they are brilliant economists—I do not think that I am a brilliant economist but at least I can see the fallacies in what they are saying—but what is wrong with saying that although we are now stable at 85p to a euro we would be more competitive at parity with the euro? That is a devaluation of 15%. With the growth of our educational system and our whole industrial policy, perhaps that would ensure that we stay, for once, at parity with the euro.

I do not anticipate great enthusiasm for what I have just said but is it not a fact that our trade deficit is a fundamental issue both within the European Union and outside it? Simply asserting that we have got to trade with the rest of the world in no way addresses that fundamental question. As for the European side of growth, that, too, goes back to Lehman Brothers five years ago. It is not as if the whole of the European slow growth was created within the European Union.

The other point which needs to be put to these new iconoclasts is whether they would stay in the European Economic Area along with Switzerland, Norway and Iceland. There is plenty of red tape in the European Economic Area. We signed the EFTA treaty in Stockholm leading up to its creation in 1960 and there have been rules on state aid and so on. The noble Lord who referred to the acquis, the noble Lord, Lord Spicer, who is not in his place, is correct in that if we were a member only of EFTA we would be following all of the acquis without having a seat or a vote at the decision-making table. Would he be happy to be in that position? He has given no clue as to the scenario we would be expected to vote for if he had his way.

The third and final fallacy—I am still three minutes off my 16 minutes—concerns relying on the City of London. The noble Lord seems to want to have it both ways. Either it is the centre of Europe’s financial system and dependent on our being part of the EU for its strength, or it will somehow have a comparative advantage in its own right without our being part of the European Union. The noble Lord must have missed the speeches by leading officials in China, the United States and elsewhere, who have said that of course our share of world investment would be considerably at risk if we were to leave the European Union.

In conclusion, “Stop the world, I want to get off” is a policy which I am sure the British people, when they are told the truth—we are told that we have to get them to understand the truth, but that is a bit difficult when the Murdochs, the Daily Telegraph, Daily Mail and so on do not allow them to know it because for the most part they censor it—will reject. On the state of British public opinion, I shall read out three or four statistics taken from a new survey produced by YouGov/The Fabian Society looking at the attitudes of the younger generation, those aged between 18 and 34. They were asked:

“How convincing or unconvincing do you find the following statements in favour of the European Union? … It has given people the freedom to travel, work and live in other EU countries”.

Some 60% found it “fairly convincing”. Perhaps I should send an e-mail to the noble Lord, Lord Lawson, in France saying that I hope he is happy that that has enabled him to live there.

“The EU has agreed common standards of workers’ rights, consumer protection and played an important role in guaranteeing the social rights of individual citizens”.

The response showed that 48% found that statement “fairly” or “very” convincing against 15% who did not.

“Co-operation between EU countries is the best way to tackle the big issues of our time, like climate change, the global financial crisis and international terrorism”.

Some 49% said yes, while 18% said no.

“The EU has helped keep peace in western Europe since the second world war”.

Some 47% agreed and 17% did not.

Perhaps I may say in my final sentence that, so far as peace in the world is concerned, it is essential that Germany, France and ourselves are in the same Europe with a common defence approach vis-à-vis the rest of the world. That point will become clearer and clearer as this debate continues.

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[Lord Bilimoria]

My Lords, the gracious Speech said a lot of really good things: build a stronger economy so that the United Kingdom could compete and succeed in the world; strengthen Britain’s economic competitiveness; ensure that interest rates are kept low and that people who work hard are properly rewarded; invest in infrastructure—I could go on. It is terrific.

However, when I was making my maiden speech, as the noble Baroness, Lady Lane-Fox, did today, in the same debate on the economy, I was advised, “Don’t worry about what’s in the gracious Speech; you can speak about things that are not in the gracious Speech”. I congratulate the noble Baroness on an excellent maiden speech. I am delighted to have a fellow entrepreneur in the House, and on the Cross Benches too. She spoke passionately about online inclusiveness, and I am sure that from now on all Peers will be online. Of course, we already are.

What is missing? What has been picked up in a huge way is Europe. The noble Lord, Lord Forsyth, said that to him this was like Groundhog Day—déjà vu. I am not going to go into that topic. Europe is going to go on for a long time. The eurozone crisis has not gone away. There are regular lulls before the storm, but that storm is still about to come and it will be a perfect storm. I believe that we need to start with a clean sheet of paper and renegotiate our position in Europe. I say every day, “Thank God we are not in the euro”.

As an economy, we may have lost our triple-A rating but our interest rates are low and our inflation is relatively low. However, although we have avoided a triple dip, we are bumping along the bottom. We need to generate growth. What worries me is the Government’s priorities in achieving this. Why did we waste so much time pushing through employees giving up their rights for shares? This was against the will of business. It was twice sent back by the House of Lords to the House of Commons. It has gone through in a watered-down way. The lesson that I have learnt from this is that I could see very clearly that the Government had not consulted business properly first or listened to it. One of my favourite sayings in business is that good judgment comes from experience and experience comes from bad judgment. Will the Minister confirm that the Government have learnt from this mistake?

[Lord Lea of Crondall]

If the noble Lord will forgive me—this is a slightly sensitive subject—in regretting that noble Lords did not press their amendment, he may just be reminded that it was a Cross-Bencher, the noble Lord, Lord Pannick, who had put up an excellent performance on the first two occasions, who withdrew the amendment.

[Lord Bilimoria]

The noble Lord, Lord Pannick, did an excellent job, and the noble Lord is absolutely right. Will the Government accept, learn and consult business more in future?

The spending review is about to come along. Are the Government on target, given that, as the noble Lord, Lord Forsyth, said, our borrowings are increasing and will double to £1.5 trillion? We have to bring government expenditure as a proportion of GDP down. Is there a target of 40% of GDP for government spending? Could the Minister confirm that?

With regard to priorities, immigration has reared its head again. I am really worried about this. The gracious Speech mentions dealing with illegal immigration, the bad immigration that harms our country, and yes, we need to deal with that. Unfortunately, though, the signals that are being sent out, reinforced by highlighting immigration in the gracious Speech, are about discouraging and deterring the immigration that we benefit from. The number of Indian students has gone down by more than 40,000. In fact, recently we had a former head of immigration from Australia in the UK, and he said that every day in Australia they pray and thank God for the existence of the UK Border Agency. It has been proven unfit for purpose; that is why it is being dismantled. We are harming our competitiveness. If students do not come here, they go to Australia, Canada and the United States. It is one of our biggest strengths. We need to send out a very clear signal that we want immigration to benefit this country and that we appreciate the good immigration that has benefited it.

On infrastructure and High Speed 2, the noble Lord, Lord Forsyth, hesitated, but in his fantastic speech moving the Motion for an humble Address, the noble Lord, Lord Lang, spoke about High Speed 2 being a good investment in infrastructure from which our grandchildren will benefit. It is high speed being delivered at slow speed. Will the Minister confirm exactly when this project will be completed? It is an example of long-term thinking, which is great. The Minister spoke about Crossrail. I congratulate the Government on Crossrail. It is a fantastic initiative, started by the previous Government, which will benefit our economy, but nobody has spoken about Heathrow and the desperate need to improve our air services. We need that third runway at Heathrow. Why are the Government just postponing it?

What about a balanced economy? There is nothing in the gracious Speech about a balanced economy. When I am asked about my business, I say with pride that first and foremost we are manufacturers. Are the Government keen on promoting manufacturing? What are they going to do about that? We should be maximising our competitive strengths.

The tourism industry brings more than £115 billion to this economy. Expanding Heathrow would help tourism, but the most photographed building in the world is the Eiffel Tower. The second most photographed building in the world is our wonderful Palace of Westminster. The reason it is second is because we are not in the Schengen scheme for visas. There are so many people, particularly from China, who come to Europe, come as far as the channel, but do not come to the UK because a Schengen via for 25 countries is cheaper than a UK and Ireland visa. We should join Schengen. Anyone who has a Schengen visa should be able to come into this country. The reason we do not join Schengen is that we are worried about our border security. I have just spoken about the UK Border Agency. Why are the Government continually postponing imposing exit checks at our borders? They need to be brought in soon. We know who is coming into our country, but we do not know who is leaving. We need to have those exit checks. Will the Minister inform us of when they are going to be introduced?

Another of our competitive strengths is higher education, but there was not one mention of it in the gracious Speech. Earlier this month it was mentioned in this House that the University of Cambridge has achieved more Nobel Prizes than any other university. That is something of which we should be proud. That is in spite of the fact that we spend less as a proportion of GDP on R&D and innovation than the OECD or the European Union. We spend half the proportion of GDP on R&D that South Korea spends. When it comes to higher education funding, overall we spend less as a proportion of GDP than the EU average or the OECD average and way below countries such as the United States. Why is it that the United States always bounces back quickly? Why is it so competitive? Why is it so productive? Why it is so innovative? It is because it invests more than we do as a proportion of GDP in innovation and higher education. Why do the Government not do more of this?

Will the Minister confirm that we are going to be promoting clusters? There are three big clusters in the world: Silicon Valley, Boston-Cambridge in Massachusetts and Cambridge in the UK. We need to promote more clusters. Birmingham, for example, is a prime location for a manufacturing cluster. Will the Government promote clusters more proactively?

The noble Lord, Lord McFall, spoke about the financial sector. I remember speaking in the debates about Northern Rock. That was six years ago. The nationalisation of Northern Rock was rushed through in six months. It has taken us six years to get to reforming our banking system. That is scary. I am very hopeful, and I congratulate the Government on appointing Mark Carney, a Canadian, to come in and head our Bank of England. Can the Government confirm that, apart from inflation targeting, they will now encourage the Bank of England to also have nominal GDP growth targeting as well? On SMEs, which other noble Lords have spoken about, I keep hearing that they cannot raise finance. In fact, I have heard that the enterprise finance guarantee scheme loans are falling. Can the Minister confirm that? They should be increasing at times like this, when businesses desperately need finance.

On a positive note, I am delighted with the efforts that the Government are putting in through UK Trade and Investment to promote British businesses doing business abroad. I am delighted to hear that the UK India Business Council, which is funded by UK Trade and Investment and of which I am the founding chair, is now to be opening up within India. The British high commission in India has opened up two new deputy high commissions in Hyderabad and Chandigarh and will increase the number of people on the ground helping to promote British business in India. This is fantastic. As the noble Lord, Lord Forsyth, concluded, we must promote and encourage our businesses not just in doing business with Europe, but in doing business with the emerging markets such as India—the BRIC nations.

The Government are doing a fantastic job through their marketing campaign, “Great Britain”. The “Great Britain” campaign tries to promote Britain with confidence aboard. I suggest that we need a “Great Britain” campaign to promote Britain within Britain. We do not appreciate enough the amazing strengths that we have as a country. We have the best of the best in the world in just about every field you could imagine, whether it is the creative industries or the legal and accounting professions, and manufacturing including beer, automobiles and aerospace, as well as sport, film and theatre. Our universities are, along with America’s, the best in the world. London is the greatest of the world’s great cities. I could go on.

We may be bumping along the bottom as an economy, but we should never take for granted the amazing strengths that I wish the Government would get behind—strengths which we should spread with confidence throughout our country. Then we will be able to generate growth with confidence.

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[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, I am probably the only person in the Chamber who sat and listened to every single one of the speeches made today. It is with some lack of confidence that I say I will be able to respond to all the points that were made. I will do my best. It may require me gabbling a bit but I will provide as many responses as I can. This has been an important and good debate. I always enjoy the Queen’s Speech debate because it is very wide-ranging—I apologise to the noble Lord, Lord Patten—and we get a whole lot of views.

In his opening speech—many, many hours ago—my noble friend Lord Deighton laid out the Government’s programme for the next Session. Since then, we have had more than 40 commendable speeches, to which I will endeavour to do justice in the short time available to me. Where I have been asked direct questions, if I do not answer them I will see that a letter is sent to the noble Lord concerned.

I, too, congratulate our new noble friend, the noble Baroness, Lady Lane-Fox. Many others have complimented her on her speech, very justifiably, and I, too, would like to say how fortunate this House is to have her in our midst. She will not know this but I knew the previous Baroness Lane-Fox very well and respected her very much as a great supporter of the disabled. She was one of the first people to really put the needs of disabled people on the map, of course being disabled herself. She was a great person and I am sure that the noble Baroness will follow adequately in her shoes.

The comments started off with a sort of mish-mash of disagreement about what has happened with the economy. I found rather rich the suggestion that the Government were not doing the right thing to put it right. On a number of occasions in this House, I have gently reminded noble Lords on the other side that this deficit was not of our making. We inherited it after 13 years and now to suggest that we should borrow our way out of this situation, when we were borrowed into it, is something that will require more time for debate than I have today.

Despite the considerable efforts that have been and are being made by the Government, the country is still facing difficult economic challenges. The departments represented in today’s debate—my department, the Department for Communities and Local Government; BIS; the Department for Transport; and the Treasury—are the most involved in providing the essential measures that can assist recovery and stimulate growth.

The Government have been consistent in basing their policy on an unwavering commitment to fiscal responsibility and introducing measures aimed at ensuring that this country is one of the best places in the world to do business.

We have had many speeches on the economy, on both its strengths and its weaknesses. The Government’s key objective is to reduce the deficit, and spending consolidation is a vital part of this. Interesting speeches on this were made by the noble Lords, Lord Eatwell and Lord Empey, and the noble Baroness, Lady Wheatcroft. The Government have consistently looked to prioritise growth and enhance spending. The Chancellor announced in the Budget that the Government would increase their infrastructure spending plans by £3 billion per annum, paid for through permanent reductions in current spending. This will mean £18 billion additional investment by the end of the next Parliament.

The noble Lord, Lord Empey, suggested that individual departments and civil servants should have a duty to make savings and to understand what they were doing—I think that that is more or less what I would interpret it as. We are currently engaged with departments to identify more savings from their budgets ahead of the spending review on 26 June. There will be a zero-based review of capital to identify the highest-value-for-money growth schemes. As noble Lords have said and understand, capital growth is essential to support the growth strategy.

Public investment as a share of national income, thus GDP, will be higher on average between 2010-11 and 2020-21 than under the whole period of the previous Government despite much greater constraints on the public finances. This means that the Government will never cut capital spending to the levels planned by the previous Government, who intended to cut it by 7% more than in our plans. This would have meant £3.4 billion less investment by 2014-15.

We have made good progress on coalition agreement commitments and business plan delivery. Our focus now is on maximising the impact of our policies, particularly to achieve growth at a local and national level. That means devolving powers and responsibilities and giving business as much freedom and support as possible so that it can flourish. As my noble friend Lord Tope has pointed out, my department has been instrumental in passing funding and responsibilities to local government to help to promote business activity.

A final part of this localisation is covered by the measures announced in the gracious Speech of the local audit Bill. I shall not go into the details tonight because it looks as though we are going to have a lively time with it, but I know that we will be starting consideration of that in the next few weeks. The legislation will enable local authorities to be more independent of central government in selecting their auditors and managing their finances.

We have had a number of contributions today on transport and transport infrastructure. It is correct that we are investing more on major transport projects such as HS2 and Crossrail. Despite the strictures of my noble friend Lord Forsyth, we are investing also in local roads, rail and transport schemes. I am pleased that, in general, speeches today have supported that investment.

I was asked specific questions by the noble Lords, Lord Faulkner and Lord Bradshaw, and the noble Viscount, Lord Simon. They were all kind enough to give me advance warning of these, so I shall briefly respond to them now. The noble Lord, Lord Faulkner, asked about Crossrail having a station at Reading or Maidenhead. I know that he has recently had a written response from my noble friend Lord Attlee and that my noble friend is happy to speak to him again on this subject if he wishes. Network Rail’s Crossrail works on the Great Western main line are already under way in a number of places. However, the works at Maidenhead that might not be needed if the route was extended to Reading are not due to commence until 2016, so there is plenty of time to deal with that.

The noble Lord, Lord Bradshaw, asked about the acute shortage of railway rolling stock and whether Her Majesty’s Government would get out of the way of investment by indicating in franchise agreements a presumption of the carry-over of such stock.

The Government’s rail Command Paper stated that bidders should not be fettered in their future use of rolling stock and should have more market freedom. That was endorsed by the industry’s rolling stock strategy, published in February 2013. The Government already make use, where appropriate, of Section 54 of the Railways Act, under which we can require a new operator to take on the previous operator’s rolling stock.

Finally, the noble Viscount, Lord Simon, was concerned about young drivers’ road safety. We are intent on reducing the number of accidents involving young drivers. That is a top priority and we have already taken steps to make the driving test more realistic by introducing independent driving and stopping the publication of test routes. A Green Paper considering a range of options for improving the safety of newly qualified drivers will be published later in the spring.

My noble friend Lord Forsyth asked about the modernisation of transport, to which I have just referred. We are undertaking the biggest modernisation programme for the railways since the Victorian era. We are working with local authorities and businesses to target investment where it is most needed, and we have established the independent Airports Commission to make recommendations on how to safeguard future international aviation capacity. The noble Lord, Lord Bilimoria, asked about that. Sir Howard Davies will be delivering a shortlist of credible proposals by the end of this year. He will also identify ways in which we can make better use of existing capacity and, as part of his final report in summer 2015, the commission will provide materials to support the Government in preparing a national policy statement.

We have of course made a commitment to HS2, which I am glad was largely supported by speakers from around the House. We believe that that will change the economic geography of the nation. The noble Lord, Lord Bilimoria, also asked us about timescales. I can tell him that we aim to produce a paving Bill this year. The target for Royal Assent to the paving Bill is November this year. The hybrid Bill for phase 1 will be introduced by the end of 2013, with 2015 the target for Royal Assent. We expect that the hybrid Bill for phase 2 will be introduced in 2018. Construction of phase 1 will start in 2017 and construction of phase 2 will start in the mid-2020s. We hope to have the first line open in 2026.

The general support for HS2 is a great help. The noble Lord, Lord Faulkner, gave stirring support for it. I agree with him that it is not just about high speed. It will unlock the enormous potential opportunities that cities including Birmingham, Manchester and Leeds have to offer, making them more attractive places to locate and do business. HS2 will bring jobs on the railway to the cities that it will serve. HS2 Ltd estimates that about 9,000 jobs will be created to construct the new London-Birmingham route, with a further 1,500 permanent jobs created in operations and maintenance. All in all, it is something to look forward to and support. However, we have not just been working on HS2. We have also been investing in other railway and road structures in an ongoing programme to ensure that it is not just new lines that are supported but current ones.

We know that at least 90% of businesses are small and medium-sized enterprises and that they have not found it easy to access finance in the past few years, so we have created a business bank, which will deploy £1 billion of additional capital to address gaps in the supply of finance to small and medium-sized enterprises. That will enable them to access loans and give them certainty to bid for contracts both within this country and beyond. We are providing further help by reducing corporation tax from 28% to 20% by April 2015. In addition, we will be providing a £2,000 contribution towards employers’ national insurance contributions if they take on extra staff and so help the unemployment situation, which my noble friend Lord Sheikh welcomed.

My own department has been at the forefront of promoting infrastructure support, which, as other noble Lords have said, is important to the future of the economy. Creating the right conditions for increasing infrastructure projects is essential to stimulate growth, particularly through the construction industry, so we are building on an existing commitment to an £11 billion housing investment in this spending review. In this year’s Budget, a further housing package totalling £5.4 billion was announced. The noble Lord, Lord Eatwell, suggested that there should be more concentration on new housing. I remind him that we have recently launched an equity loan scheme for help to buy, and that will provide £3.5 billion of investment, focusing on new-build home ownership. It will also boost construction. That has been well received and well taken up.

We have introduced a mortgage guarantee scheme from January 2014 to provide guarantees to support £130 billion of high loan-to-value mortgages. We are undertaking a build-to-rent scheme, the funding for which has expanded from £200 million to £1 billion, to support the development of more new homes. The affordable homes guarantee programme doubled the support for a further 15,000 new affordable homes in England by 2015, and we have the right to buy.

The noble Lord, Lord Shipley, and I disagree that none of this will generate more housing and boost construction. It will, and that is what we are aiming for. However, it involves a huge investment of money in both housing and construction.

The Government published our full response to the Heseltine review in March 2013, confirming that 81 out of 89 recommendations had been accepted in full or in part, including the creation of a single local growth fund. The size of the pot has not yet been agreed but it will encompass quite a lot of other pots.

The Government have also established 24 enterprise zones, and those are creating jobs as we speak. The right reverend Prelate the Bishop of Birmingham rightly pointed out how Birmingham was doing, particularly with the city deals. Birmingham clearly has a good future and is working extremely hard to ensure that it is at the top of the tree and ready to take on any responsibilities to come its way. It is estimated that the first wave of city deals will create 175,000 jobs over the next 20 years and 37,000 new apprenticeships.

In addition to the Autumn Statement, 2012 saw the announcement of government investment of an additional £980 million in schools in England by the end of the Parliament, the funding for 100 new academies and free schools. All these promote growth and investment.

The noble Lord, Lord Bilimoria, made a passionate plea for more pressure on trade, including selling the UK in the UK. The Government are encouraging investment in exports as a route to a more balanced economy, and we have set out our ambitions to increase total annual UK exports from £488 billion in 2011 to £1 trillion by 2020.

My noble friend Lord Sheikh and the noble Lord, Lord Bilimoria, promoted the need to pursue trade with Africa as well as with India and China. We understand the need to extend that, and I know that my noble friend Lord Deighton will be taking notice of that.

[Lord Lea of Crondall]

The Minister has mentioned Africa and China. Does she recall that a number of noble Lords have mentioned Europe? Does she think that it makes no difference to the prospects for investment in Britain if we have one hand on the door handle to exit from the European Union?

[Baroness Hanham]

I was not ignoring Europe. I was speaking directly to the points that were made about India and Africa. Of course our trade with Europe is extremely important, both imports and exports. I do not think anybody is going to want to unbalance that. The noble Lord’s point is well made and I was not trying to underestimate its importance. Trade with the rest of the world is also extremely important.

In January 2013, the Government introduced a one-in, two-out system of deregulation whereby no new regulation is introduced unless it is offset by deregulation of twice the equivalent value. That will be part of the discussions we will be having later when the deregulation Bill comes forward.

I have a sheaf of papers here and about two minutes to deal with them. The noble Lord, Lord Eatwell, spoke about the banking reform Bill. The Government are going to give careful consideration to the recommendations made by the Parliamentary Commission on Banking Standards, including those it makes in its final report. We will consider tabling amendments to the Bill when and if appropriate. The Government have committed to ensure that both Houses will have enough opportunity to consider and debate any amendments tabled.

The noble Lord, Lord Bilimoria, asked about promoting trade beyond Europe. UKTI is working with the Foreign Office and applying a range of criteria to prioritise its focus on emerging and high-growth markets.

The noble Lord, Lord McFall, and the noble Baroness, Lady Kramer, asked about the break-up and sale of RBS and other banks. The government shareholdings in RBS and Lloyds Banking Group are managed on a commercial and arm’s-length basis. UKFI works closely with those banks to assure itself of their approach to strategy. Its objectives are to create value for money for the taxpayer and to devise and execute a strategy for realising it in an orderly and active way over time.

My noble friend Lord Forsyth suggested that quantitative easing has exaggerated the liabilities of pension funds because of low interest rates. We recognise that quantitative easing is a major tool designed to affect the economy as a whole to meet the 2% inflation target over the medium term. Over 2011-12, companies with defined pension schemes have seen their scheme deficits more than double from around £100 billion to £250 billion, but the recent fall in gilt yields cannot be ascribed to quantitative easing alone. Factors such as flight to safety from the eurozone also have an impact.