Queen’s Speech

Lord MacGregor of Pulham Market Excerpts

Thursday 5th June 2014 Lords Chamber

[Lord MacGregor of Pulham Market (Con)]

In the time available to each of us it is necessary to confine ourselves to a limited number of points and even then to deal with them only in staccato fashion. I warmly welcome the Queen’s Speech and wish to make four points.

However, first I wish to congratulate my noble friend on the Front Bench on his speech. I thought he made an outstanding case for the work on infrastructure that the Government are doing at the present time. I do not intend to repeat the many points he made, but I wish to say how fortunate we are to have him taking the ministerial lead on infrastructure. I believe that we are greatly benefiting from his skills, experience and track record.

I turn to my first point. I wish to follow the noble Lord, Lord Razzall, and dismiss the suggestion by some Labour Front-Benchers that this is a lightweight package from a Government who have run out of steam. I well remember, as Leader of the House of Commons and therefore chairman of the committee making recommendations to Cabinet, the discussions for the programme leading up to the 1992 general election. There are always many candidates for legislation. Every department has a shopping list, and there are always many more candidates than can be entertained in any one year, but that is particularly the case in an election year. The legislative programme has to be shorter than usual in that year. There is no scope for spill-over legislation. Even in those days, when we did not know when the election would be called, provision had to be made for that. Today, with a fixed-term Parliament, we know that the Session will be short. There will certainly be many other things to occupy Parliament: the implications of the Scottish referendum, whichever way the vote turns out, and much debate on EU matters and an EU referendum in advance of the general election, to name just two. I believe that the Government have judged the weight of the Queen’s Speech absolutely correctly.

Secondly, I warmly welcome the economic measures—the charter for budget responsibility, to deal with spending taxpayers’ money responsibly, something which throughout my parliamentary career I have always felt to be of the utmost importance. In this context, I recommend that all with an enthusiasm for this should read the book Conundrum co-written by my successor as Member of Parliament for South Norfolk, Richard Bacon, which is based on years of work by the PAC and demonstrates how much more still needs to be done on this front of spending taxpayers’ money responsibly. I welcome the emphasis on start-ups and small businesses. My first ministerial job was as Minister for Small Businesses. In fact, I was only the second such Minister in the DTI. Much progress has been made since those days. The contribution of these businesses is much more widely acknowledged, but clearly more can be done, and I warmly welcome that. Above all, I welcome the emphasis on the long-term plan to build a stronger economy and reduce the deficit. I believe that the Chancellor’s determined pursuit of his strategy has been masterly and he has seen off his critics. It ill behoves the shadow Chancellor to criticise, given the very important part that he played in the previous Government’s huge overspending and the increase in government debt, which left us so vulnerable when the international crisis came.

I have great respect for the noble Lord, Lord Adonis, but I was astonished by his speech today. There was no word of acknowledgement from him about the disastrous legacy that we inherited. He seems to ignore the fact that the Labour Government were responsible for nearly 10 of the past 13 years. It would be interesting to cost the programme that he has laid out today and see what that would do to bring down the deficit. In that context, the Chancellor has seen off his IMF critics, who now acknowledge that, when they made criticisms of him in the past year, he was right. Like the noble Lord, Lord Razzall, I was deeply concerned by the European Commission’s recent intervention calling for the Government to rein in the Help to Buy scheme and increase council taxes. That is none of the Commission’s business. I am a firm believer in subsidiarity, and this is a classic breach of that principle, unhelpful in the current context of the debate on the role of the Commission. It is entirely the Chancellor’s responsibility to deal with these matters.

That leads me on briefly to my third point—housing—which it is appropriate to mention in a debate on the economy, given the recent comment from the Governor of the Bank of England that the housing market posed the “biggest risk” to the UK’s economic recovery. There is recent evidence that the Help to Buy scheme is helping the housing market outside London, particularly for first-time buyers, and that the increase in house prices there may be easing. I believe that the way to tackle such excessive risk as there may be in the mortgage market is not by raising interest rates but rather by tackling it through a tighter approach to loans-to-incomes ratios, as the Financial Conduct Authority is now considering and Lloyds and RBS are now doing. It is a throwback to the regimes that we all knew when taking out our first mortgage. Prudence was imposed on us by relating the size of our mortgages to the incomes that we earned. But London is a special case. Here the continued rise in house prices is creating serious problems for many young people seeking to own their own homes. Partly, that is a reflection of the increasing numbers seeking to live and work in the capital and partly it is because the housing supply is failing to keep pace. I applaud the measures in the Queen’s Speech to deal with that.

An increasing contribution to the problem is the way in which the housing market in so much of central London is now dominated by soaring prices paid by foreign buyers. Of course, we must expect and welcome many foreign residents with high incomes living here in London if London is to remain a dominant international financial and business centre. But I am concerned that so many of the new developments in the centre of London and spreading out seem to be marketed first to very wealthy foreign purchasers seeking a safe haven for their investments and not regularly living here. That is having a considerable ripple effect, way beyond central London. All of us who live in London but not in the centre are experiencing that. I welcome the introduction in the Finance Bill of the measure that non-residents disposing of UK property should pay capital gains tax, but nevertheless my concern remains. I believe that the Government should continue to monitor that very carefully.

Finally and fourthly, I particularly welcome the proposal in the Queen’s Speech to,

“introduce a Bill to bolster investment in infrastructure and reform planning law to improve economic competitiveness”.

In particular, the Bill will,

“enhance the United Kingdom’s energy independence and security by opening up access to shale and geothermal sites and maximising North Sea resources”.

This measure was one of the proposals that the Economic Affairs Committee of this House recommended in its recent report, The Economic Impact on UK Energy Policy of Shale Gas and Oil. I believe that this is one of the most important reports the Economic Affairs Committee has published during my chairmanship of it. I ask the Minister to urge his colleagues to produce the government response in good time and well before the Summer Recess so that we can have a full debate on this issue as today I can outline only briefly some of the issues.

The committee was immensely impressed by the US experience over recent years in relation to shale gas and oil, which has transformed the American economy, lowered energy prices, produced substantial employment, caused a lot of the energy-intensive industries to consider going back to the United States and led it to export a great deal of coal to Europe, which is not the most environmentally beneficial form of energy. That American experience, which will not be repeated in full here, has been dramatic. Shale gas and oil could provide a huge opportunity for the UK, with lower energy prices, although not on the scale experienced in the United States, and greater energy security, which is particularly important in the context of what is happening in Ukraine. The development of shale gas and oil could retain energy-intensive industries in the UK and help to mitigate climate change as it is an effective carbon dioxide reduction measure. However, the problem is that progress is painfully slow. We are only just beginning to see applications to do exploratory drilling and we simply have no idea how much shale gas and oil can be produced in this country until we go ahead with exploratory drilling. We have not really started on the process. As the noble Lord, Lord Adonis, correctly pointed out, there are real risks of energy shortages and rising energy prices occurring in this country towards the end of this decade because of the reduction in coal-fired plants and the slowness of getting nuclear proposals through. Therefore, we urgently need to take full advantage now of the potential offered by shale gas and oil.

We identified the planning process as one of the main obstacles. We did not recommend that the regulatory environment should be weakened but we believe that the delays which arise in dealing with a multiplicity of agencies greatly inhibit companies that wish to exploit shale gas and oil. Therefore, streamlining is essential in that area. We examined a huge amount of scientific evidence, looked with great care at all the environmental and other objections, and concluded that all could be met, given our rigorous regulatory regimes. In short, shale gas and oil exploration is potentially a major opportunity for this country but we need to get on with it. This is a good first step in getting on with it but I ask my noble friend to ensure that we have a full debate on this subject before the Summer Recess, given its serious implications and great potential.

In conclusion, much of what is in the Queen’s Speech is very good and I warmly commend it.