Queen’s Speech

Lord Mendelsohn Excerpts

Thursday 19th May 2016 Lords Chamber

[Lord Mendelsohn (Lab)]

My Lords, first, I humbly apologise for arriving late in the Chamber. I apologise in particular to the Minister, and I extend my appreciation to my Front-Bench colleagues, who I think were experiencing various forms of nervousness and other deeper medical states. I am pleased to be here today to respond to the Queen’s Speech on our first day of debate.

Many people have been slightly unkind to the Queen’s Speech. There have been suggestions that this is the product of a Government with no real governing strategy and no consistent economic policy, a divided party, a weakened Prime Minister, and a self-inflicted moment of political paralysis. Some have drawn the conclusion that it is no surprise that we have such a limited Queen’s Speech and with so little ambition, designed to cause no turbulence to the European vote and to reunite a party that awaits with bated breath the outcome of the referendum.

There are, of course, well-known virtues in doing nothing, or in doing very little. Limited ambition can sometimes be very powerful, and some systems of government are designed to do almost nothing. Incrementalism can always be a very effective way of governing, and there can, of course, be some amusement in making small things appear big. There is an oft-quoted maxim that it is not just the size that matters. Some of the Bills, especially in relation to transport and science, seem to be very small measures, but they underline some very big changes in our country and where we play most strongly.

There are three particular points to make about the overall context of the Queen’s Speech. First—this is especially relevant today—some measures appear to be the start of a legacy for the current Prime Minister and are in areas on which we can praise the Government for deciding to look at them. It may be a little late to establish a firm legacy, but tackling prison reform has been much delayed and is certainly very worthy.

As regards today’s debate, the Children and Social Work Bill, which is designed to get children out of the care system and permanently adopted and to ensure that those who leave care are properly supported, addresses these people’s huge diminution in life chances and is especially welcome. Both these measures have our broad support; there will be challenges in implementation, but they are none the less extremely important. There will be issues such as costs for providers, but certainly the House will take these matters very seriously.

Secondly, there will always be problems with a package of Bills such as this—with the objectives, the evidence, the ability of the proposed remedies to deliver, and managing their consequences. Delivery is of huge importance to a lot of these measures. It is true to say that the best plan is not as good as the plan that can be delivered best. Within these measures there is scope for further ambition from Ministers and civil servants as regards their drafting, and in their response to the debates that will take place in this House and the other place. The value of scrutiny and the role of this House are extremely important in this regard. Certainly, the Strathclyde review and the proposed increase in the membership of this House may not assist those debates. As evidenced in not just the performance of this House but the Minister’s systematic unravelling of the entire work of his predecessor, greater care and attention in listening to the deliberations of this House would have been useful.

I worry that the Government seem to be set again on looking to the private sector for solutions and massively overplaying its benefits and the public sector’s failures. Governments have frequently miscalculated the benefits of the private sector and should look at other forms of provision, allowing the private and public sectors greater flexibility to work together in other ways, and certainly investing more in public sector capability, particularly management capability. We have to reform the way the Civil Service looks at the delivery of these measures. We cannot go on with a system that was designed for a previous era. The asymmetry of responsibility and authority in the public sector ensure chronic delivery problems.

Academic research on public sector management emphasises the importance of managing people over adherence to systems, whereas in the private sector, systems are much more implementable due to money being the central measurable focus, and the competitive advantage of human relations. It seems remarkable that we have not learned how to move on from the maxim, “If you can’t measure it, you can’t manage it”. Especially with regard to some of these Bills, we need to use more effective business intelligence and better understand economic behaviour. Putting that into impact assessments would be extremely useful.

Thirdly, this Queen’s Speech does not meet the requirements of the time, although one should not underplay the potential of some of the measures, especially those on business and the economy and on productivity. We do need this—our productivity crisis is worsening. The latest data show the worst productivity slowdown since the financial crisis, the UK’s performance is the worst among our peers, and our workers are now 14% less productive than they were pre-crisis. We have huge weaknesses in professional services, telecoms and communications, and banking and finance, and due to the slowdown in investment caused by the financial crisis and in recent times by the possibility of Brexit, there are also problems in manufacturing.

We strongly support the plan to deal with this by promoting competition across the economy, and in this context we welcome the better markets Bill, which represents a huge opportunity to address some of these issues, and which can be applied more widely. The European Union referendum is crucial to this. It is an economic fact that our productivity gains, modest though they have been, are largely a result of our entry into Europe in 1973. Those who advocate withdrawal are not coming clean about the scope of the impact, and the centrally planned economic and skills transformation that will be necessary if we leave.

More generally, the department for Business, Innovation and Skills needs to step up to the challenge. There is certainly a case for promoting the Minister, or at least for providing additional support to deal with the large number of Bills she is responsible for. We are conscious of her Herculean efforts in the last Session. It is important that the department grasps the nettle of having an active industrial policy; much more energy is needed. Even decisions such as on the location and functions of staff seem to have very little utility or sound evaluation, apart from the most London-centric and simplistic cost-cutting functions.

The crisis is not just in the private sector. The public sector too has acute productivity problems. Take the health service. Recent figures demonstrate that productivity has fallen in NHS hospitals for the third year running. I pay tribute to the excellent report by my noble friend Lord Carter, but a strong cadre of managers is needed to deliver any real changes. Certainly, the Secretary of State needs to address what is now a clear funding gap. After his most recent agreement with the NHS, there was a definable figure of what money was needed but it depended on productivity benefits. The current productivity decline probably means that the funding requirement is moving nearer to £30 billion than £20 billion. However, even the attempt to develop a seven-day health service seems to be challenging. The changes to junior doctors’ contracts are there but no other staff have had any changes. Therefore, an effective operational plan still seems immensely elusive, as my discussions with health professionals have made clear. Much more attention needs to be paid to public sector management and strategic skills, especially given the nature of this Queen’s Speech.

We are strongly supportive of some of the measures and look forward to engaging very constructively with the Government on them. The better markets Bill is a very important step towards establishing stronger responsiveness to consumer demands. It is true that this also has an impact on a number of smaller businesses and microbusinesses, which we should consider. We should ensure that the entrenched advantages and anti-competitive processes that many of our industries have developed are opened up. We should increase transparency and we can even address further measures, such as late payments, by using much more effective mechanisms. That could certainly be covered in this Bill. We look forward to seeing the detail of the Bill and establishing how we can take it forward to address the challenges and transform the prospects for the different sectors in our economy. For example, the service sector, which makes up between 75% and 80% of our economy, still requires massive opening up to competition.

On the digital economy Bill, we support many of the Government’s measures, such as on nuisance calls. However, we have to get serious about our objectives, a feeling that I know is shared by many on the other side of the House. Currently, we do not have as good a rollout of broadband across our country as we need. The speeds are limited and our targets are from yester- year: they should not be anywhere near as low as they are; we should be looking at much more significant targets. I have to make one confession. I possess in my house broadband from three separate providers. Not one of them achieves the advertised speeds and not one of them provides an uninterrupted service. Even by having three providers—the main three players in the market—we have had interrupted service in a relatively straightforward part of London. I cannot imagine the stresses and challenges that people in other parts of the country face. Enough is enough: this has gone on for far too long. This Bill will also, I hope, address some of the weaknesses in Ofcom’s approach to this issue, which I believe has been utterly inadequate—I am sure that many in this House will have a similar view.

On the Higher Education and Research Bill, we have many challenges. We have a fantastic science base and I have spent a lot of time recently, as a private investor, looking at some of the achievements of our research and science base. It is utterly outstanding, world-class and world-leading. We should do much more to encourage that and I wish that the department was much more active in that regard.

We have to be very careful that we do not end up saddling our students with greater debt by allowing huge freedom to increase fees without any consideration. We have to be absolutely clear about what we are measuring. Universities are one thing, but university departments may be another. I have a daughter who has just started a course at a university that I will not name, to spare its blushes. She did international history and politics in her first year and believes that she has spent £9,000 to be self-taught. In some university departments, that is the case. However, she shares a flat with a number of people who have had outstanding teaching support. It is wrong to say that that is a factor of the university; it could be more to do with departments. We must first consider the particular context, and we look forward to hearing the detail. While opening up the market to private providers is not inherently wrong, it would be wrong to do it in a way that is hugely detrimental to our overall university reputation. I do not like the idea that we will castigate a series of universities. The most recent figures on university approval worldwide show a huge rise for universities in the Far East, and a lowering of the position of some of the main UK universities.

Across this Queen’s Speech, in measures such as private pensions and the criminal finances Bill, business has an important role that should not be underplayed. On health, there are many measures that do not address the principal crisis but are important in their own right, and we would do well to scrutinise those here. This Queen’s Speech is limited in scope and nature, but that does not mean that our deliberations here cannot achieve more and cannot, in tandem with the Government’s objectives and values, which are broadly supported across this House, find ways to enhance the passage of these Bills and the other measures available to the people of our country.