Queen’s Speech

Lord Monks Excerpts

Tuesday 10th June 2014 Lords Chamber

[Lord Monks (Lab)]

My Lords, I start by adding my congratulations to the noble Lord, Lord Bamford, and the right reverend Prelate the Bishop of Durham on what I regarded as really excellent maiden speeches.

The gracious Speech has been criticised from the Opposition Benches as something of a fag-end speech, a lowest common denominator programme from a riven Government, a zombie effort with minimal content—in fact, one could say we are competing on this side of the House to find the right compliments to pay. I will content myself with saying that it is somewhat thin gruel given the scale of the problems the nation faces, as my noble friends Lord Tugendhat and Lord Liddle and others spelt out earlier. However, it is not a total non-event and there are important points which will need the close attention of this House.

On pensions, I confess to some confusion in my mind about the direction that the Government are taking. On the one hand, pensioners in DC schemes will be able to extract the cash value of their savings; on the other, collective defined-contribution schemes will be promoted. Are there not two different philosophies at work here—freedom to blow one’s pension savings on a jazzy Italian sports car or whatever, ranged against the collectivism inherent in those Danish and Dutch pension schemes with all their rules and mutual obligations?

I declare an interest. I am a trustee of NOW: Pensions which is part of ATP of Denmark. ATP provides four out of five occupational pensions in Denmark and is a much respected non-profit-making institution. Denmark has lessons for us to learn in terms of low charges, simplicity and generally excellent investment returns. I hope that we now can turn that experience to benefit British pensioners.

I accept that the annuity market has been unsatisfactory in the UK, but we are entering unknown territory when we encourage pension pots to be blown on property, sports cars and the rest. I hope that pensioners will not come to lament as the late great George Best did. When asked about what he had done with his money, he replied, “I spent it on gambling, women and drink. The rest I wasted”—probably on a Lamborghini. We all know in this House what the consequences for the public finances could be of people not having occupational pensions who actually were in a position to have them and the cost that will fall on the taxpayer for that.

Collective defined-contribution schemes are a good idea and a step in the right direction, but perhaps the Minister can bring us up to date on why there is some Dutch pressure to modify its system probably more towards our individualistic direction. There seems to have been a revolt among some pensioners there against what we could call intergenerational solidarity—benefiting one age group against another.

As a champion of auto-enrolment and how that has been developed in the UK, I would not like to see it hampered by too many extra complications and requirements added on to it. We are signing up employers as quickly as we can and there will be an awful lot of employers who are late or would probably never get round to doing it without significant pressure. We have a mountain to climb to build up a strong pensions culture in this country among employers and employees —a mountain made higher and steeper by the fact that, regrettably, we are less inclined as a country to go for mandatory or quasi-mandatory pension savings than, for example, the Dutch or the Danes.

Let us not try to run before we can walk. Can the confusion between more individualism, on the one hand, and a more collective approach, on the other, be cleared up? Can we do this in a consensual way? One of the successes of auto-enrolment has been that generally it has all-party support and all the key players in the country have supported it. Therefore, it feels rather firmly embedded as an approach. I feel these other points, too, should be subjected to a big effort to find consent.

I turn to the proposed small business, enterprise and employment Bill. The Bill certainly needs to recognise that casualised work, offering low pay and poor working conditions, was certainly expanded quickly during the recession we have just been through. It is continuing to grow even as the economy has started to recover. The proposals on zero-hours contracts are rather weak and will not end most of the abuses. There is a thin, sometimes invisible line between the UK’s deregulated labour market and exploitation—and zero-hours contracts often cross it. They are the dark side of the flexible labour market. There are other dark sides, by the way, including low pay, low skills and low productivity. When we are talking about the undoubted successes in job creation, we should remember that if this country is to earn its living properly in the world and not rely on deficit funding, we are going to have to deal with those quickly.

The tougher penalties for employers caught dodging the minimum wage are welcome, but the key question is what resources will be deployed to catch the offenders. At the moment we know the inspectorate arrangements are wholly inadequate.

I note the TUC supports moves to strengthen regulation on the disqualification of directors and to improve transparency on company ownership. However, the Government's proposals as yet do not really scratch the surface of this big subject and do not address the need for others to have a view on corporate governance—voices for long-termism, for investment and for responsibility. That seems to be an important area that is very much underdeveloped at the moment.

My final point is to warn the Government not to use the social action, responsibility and heroism Bill to water down UK safety law. Yet again, we are tending to hear the tired refrain about stripping out unnecessary red tape. Careless employers should not be let off the safety hook, encouraged to loosely hurl charges of a jobsworth culture without being contradicted by people in government. Our laws stand up well to those in other countries; our record on health and safety is good. Very often the people with the best health and safety have the best productivity and the best quality outputs from their businesses. These laws build good practice and are essential protection for the UK’s 30 million people at work.