Economy: Growth

Lord Morris of Handsworth Excerpts

Thursday 31st March 2011 Lords Chamber

[Lord Morris of Handsworth]

My Lords, in this debate I have noted a broad measure of agreement right across your Lordships’ House—agreement on the fundamental requirements for sustained economic growth, many of which were so ably set out in the introduction by my noble friend Lord Hollick. I associate myself with his comments.

We all believe in a stable economy that is underpinned by sound monetary and fiscal policies, we are all committed to the pursuit of excellence at every level of our education system and we all support an economic model that is based on investment, research and innovation. We all want to see Britain leading the world in its exports, supported by a robust and transparent finance sector. Of course, with my background I am proud to say that in Britain we have the most flexible labour market in the European Union. Therefore, if I am right about the fundamental requirements for economic growth I am bound to ask what is holding us back; why the German economy is growing in a recession throughout Europe; why the US, China and India are growing world exporters while growth forecast in our country is being revised down and down; and why investment is being reduced time after time in sector after sector.

However, investment is not just about investment in plants and machinery; it is also about people. That is why I use the term “socially responsible”, because that is one of the requirements for economic success. The well-being of this or indeed any nation directly correlates with the economic performance of the country. The society in which we live expects certain norms to be part and parcel of social and economic policy. That is why it is so important that we start right at the beginning in the early years.

Of course, what we have experienced recently are cuts in the social infrastructure. That will not deliver growth. There is no growth to be had in cutting swimming pools or indeed closing parks and libraries. In the long term, some of the policies that we are following will in themselves retard growth. The increase in university tuition fees will probably deter some of our young people from taking those vital steps towards higher education. One of the engines of economic growth, particularly in the venture capital sector, is our pension funds. The recent decision to change the contribution rates will mean that less and less is available for that important sector. To conclude, we have run out of options by following cuts. The only option left to us is to go for growth.