Queen’s Speech

Lord Liddle Excerpts

Tuesday 10th June 2014 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I cannot possibly match the knowledge of the noble Lord, Lord Holmes of Richmond, on the subject of pensions, nor that of my noble friend Lady Drake in her wonderful speech. I would like to talk about what I see as the central problem in the Queen’s Speech and the Government’s policy, which is a woeful inadequacy in addressing what I think is the central challenge facing Britain: how our nation earns a living in this harshly competitive global age. Unless you answer that question there can be no decent jobs, no fairness at work and no opportunity for the many.

The gracious Speech had a few glancing nods in this direction—we are promised a small business and enterprise Bill, and we wait with interest to see what it contains—but to my mind it is a disparate group of nods on the competitiveness agenda: a deregulation target here, an infrastructure initiative there and a bit of licence for fracking as long as it is not in too many people’s back gardens in Sussex. What is lacking in the Speech and in the coalition’s policy is a comprehensive agenda for partnership between Government and business, a partnership that would address the major problems of stagnant productivity and the quite terrible balance of payments deficit that the nation now faces, that would pursue the rebalancing of our economy, which was promised in 2010 but on which we have yet to see any significant result, and that would build a new progressive capitalism that tackled the fundamental flaws in our economic model that were exposed in the 2008 crisis.

I believe that the coalition had a huge opportunity to build such a partnership in 2010. It could have done more to develop the agenda of industrial activism that, in a lowly capacity, I worked with my noble friend Lord Mandelson to develop. The coalition could have taken advantage of the widespread consensus in business that fundamental reform of our economic model was necessary, not least to rebuild public confidence and trust in business itself. The speech of the noble Lord, Lord Tugendhat, was an example of how we need to think again about many of the assumptions that we have taken for granted in the past three decades.

Yet despite the best efforts of the Business Secretary, the Chancellor never seems to have been very serious about this bigger agenda. Yes, he made some speeches, but essentially Mr Osborne took a bet on a “business as usual” recovery, created by a quite unprecedented monetary stimulus and supported by a fiscal deficit that remains unsustainably high. What we are seeing is a lifting of the economic boats that have run aground on a rising tide of mortgage, household and public debt, and that will not go on. I remember that Mr Osborne used to make great fun of Gordon Brown’s hubristic boast that he had abolished boom and bust; my fear is that the coalition is creating the conditions for a return of boom and bust on an epic scale, which will once again weaken the productive base of our economy.

I hope that on this side of the House we can develop this kind of critique of the coalition in the coming year. In my view, Labour now has a great opportunity to restore its reputation as the party of business. Part of that is because of politics. In the recent elections UKIP did well, but not so well as all that; it may have reached its ceiling in Newark, and I suspect that it may be downhill all the way for UKIP now. However, the impact of UKIP will be to push the Conservative Party in a UKIP direction, both on immigration and on Europe. On both of these issues, that is contrary to the vital interests of both business and our nation.

With business and the Conservatives drifting apart, Labour has now to show that it has credible policies to back up the call for a more responsible capitalism that Ed Miliband made in 2011. I emphasise the word “capitalism” there. We need flesh on the bones of how we are going to reform corporate governance. What are going to be the new rules for mergers and takeovers? How are we going to get greater transparency in the way our savings are managed, less extravagant fees extracted and more responsibilities of ownership exercised? How are we going to rethink our financial system, because there is a real problem of finance for growing companies when banks struggle to satisfy capital adequacy requirements and to meet prudential limits on their operations? Labour has got to have answers to these questions and put them forward.

We have also got to build on the many positive initiatives that the coalition has taken, such as the Catapult centres, which actually come from the Mandelson era, to help research discoveries turn into marketable products and services. I also believe that the expansion of higher-level apprenticeships should enable us to create a non-conventional ladder of opportunity to technician status and university degrees. Labour has to demonstrate how it can break the terrible confusion and deadlock at present holding back essential infra- structure investment.

So there is a golden opportunity to build a partnership with business, but Labour has to show that it understands the world in which business leaders operate, how their survival depends on making a profit, where often the bulk of those profits are not made in Britain, and where the world is awash with alternative investment opportunities to investing here. Of course, business cannot escape criticism where its actions are contrary to the public interest, and it is right that it should be so criticised, but Governments cannot force private businesses to invest. They can only create the framework conditions in which business can respond.

I see this as a great opportunity, a great moment. All my political life, I have believed in a Britain that works together, in a party of the centre left that reaches beyond the confines—now outdated, I think—of class in order to work with business and construct a social and industrial partnership for the good of the whole country. That sense of urgency and partnership is totally absent from the coalition’s policies, and it is the ground on which I dearly hope Labour will stand in the 2015 election and beyond.