Queen’s Speech

Lord Stevenson of Balmacara Excerpts

Monday 13th May 2013 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I thank the noble Lord, Lord Deighton, for introducing the debate on the humble Address and for making a fair fist of it, despite the relatively sparse material he had to work with. I am sure that he will not mind my saying that he had to rely on more than a few previously announced policies—housing, infrastructure, training and planning come to mind. Of course, there is always a case for limiting the amount of legislation, provided, as my noble friend Lord Whitty said, it is of high enough quality. However, the problem he had and that the Government have in general is in matching their rhetoric to the reality of their programme. You cannot trumpet your wish to focus on building a stronger economy if all you do is bring forward a programme that fails to deliver the growth and jobs required while attacking people’s rights and economic security and perpetuating a failed austerity policy.

I should like to congratulate the noble Baroness, Lady Lane-Fox, on her excellent maiden speech, which managed the difficult trick of making a substantial contribution to the debate, to which I should like to return, while leaving us all wanting a little more. I hope that she will intervene regularly in our work over the succeeding period.

I thank all other noble Lords for their contributions. It was a pity, although, I confess, quite amusing for us on this side of the Chamber, that the crisis du jour—how or whether we should continue our membership of the European Union—boiled over into the debate. However, I suppose we had better get used to it. It is invidious to single out contributions, but I hope that when the Minister responds she will pick up some or all of the interesting points made by the noble Lord, Lord Forsyth, on the Scottish dimensions to many of our debates and the Barnett consequences of that, which are very important. UK productivity problems were raised by the noble Baroness, Lady Wheatcroft, who also touched on regional recession concerns, a subject also raised by the right reverend Prelate the Bishop of Birmingham.

Our poor export performance and questions about why that arises were raised in a powerful intervention by the noble Lord, Lord Tugendhat, and I should like to hear the response to that. We were also advised that we need a more effective consumer regime than seems to be promised by the draft Bill. That was picked up initially by my noble friend Lady Hayter, and then by my noble friends Lord Whitty and Lady Crawley. Mention was made of the needs of small and medium-sized companies, particularly small companies that want to grow. My noble friend Lord Mitchell, late of Soho, picked up points that are worth taking forward. We had a reference to higher education by my noble friend Lady Warwick. I endorse that; it has been far too long since a major statement on higher education has been made and we have not had a chance in this Parliament to debate at any length the very radical changes that are being pushed through by the Government.

Finally, but not exclusively, my noble friend Lord Berkeley raised in a wide-ranging speech, not all of which I was able to follow, particularly geographically, a number of important points about the water industry, to which I am sure the Minister will want to respond. I could have referred to the points raised by the noble Lord, Lord Flight, but there were so many and they were so sharply focused on the Government, rather than on any general points, I did not think it was worth encouraging him; we will pass over that quickly. I am sorry about the listing but, by implication, the point I am making is that a number of issues have been raised all around the Chamber about the focus of the gracious Speech and why it does not match up to the rhetoric of the title of “building a stronger economy”. Why do so few of the Bills we have talked about and will be debating over the next few months focus on the question of how to build our economy?

When we debated Her Majesty’s gracious Speech last year, unemployment had soared beyond 2.6 million, we were in a double-dip recession, and the Government were borrowing £150 billion more than forecast to pay for the costs of their failed economic plan. What has happened to the economy since then? Since October 2010, the UK economy has grown by just 1.1% compared with 3% in Germany and 4.3% in the United States. Unemployment has stuck at around 2.5 million. A large number of those in work are working part-time when they want full-time work, and most people face difficulties in maintaining their standard of living, let alone improving their lot.

According to this year’s gracious Speech, and quoting it in full,

“my Government’s legislative programme will continue to focus on building a stronger economy so that the United Kingdom can compete and succeed in the world”.

You would have thought that an aspiration on that scale would have presaged Bills that created the conditions for businesses to grow and for wealth to be created, to enhance productivity and to propose a restructuring of our economy, ensuring diversification towards those sectors that would contribute to GDP in the future. Instead, what do we have? In finance, we have the carryover banking Bill and the welcome but very modest national insurance Bill. In business, we have a modest set of amendments to the intellectual property regime; a promise of more regulatory reform, but led from the Cabinet Office; and a welcome but very limited consumer Bill that plays around with structures and responsibilities but does not introduce the sort of regime that will protect hard-pressed consumers and empower them as drivers in making markets work effectively for them and for producers, thus helping to provide the foundation for UK businesses to succeed here and in other markets abroad. Surely what we needed to make this speech’s laudable aspiration a reality was a set of Bills that would establish a modern industrial strategy—an agenda where the role of government is not to step back but to work with business to create better outcomes at home and to ensure that we can pay our way in the world, to ensure that growth is more broadly based across sectors and the regions, and to reduce imports and to grow exports. So, to add to the list of gaps identified by other noble Lords, I want to mention four areas where there are still points to be picked up, and to which we will return as we move forward through the programme.

As my noble friend Lord Eatwell said, we must reform our banking sector, not only so that banks are made safe but so that the sector better serves the economy. Under this Government, lending to businesses is falling month on month, including a fall of £4.8 billion in the three months to February according to the latest Bank of England figures. We know that the rash of government schemes, from Project Merlin to the national loan guarantee scheme, and now the Funding for Lending scheme too, have simply failed to get credit to the businesses that need them. The problems are exacerbated in the regions and nations of this country. Every other country in the G8 has a state-backed investment institution to tackle this problem and to ensure that their small businesses can access the finance they need. That is why we have been arguing for the establishment of a proper British investment bank and for the creation of a network of regional banks, perhaps, following on from my noble friend Lord McFall, using one of the nationalised banks to operate alongside that institution to transmit the investment bank schemes to small businesses.

Weaknesses in vocational skills are a concern of every business that we talk to and a source of competitive disadvantage for the UK as compared to our neighbours. With almost 1 million young people out of work, we must ensure we have a system that delivers people with the education and skills our businesses need. Ministers boast that they have created more than a million apprenticeships, but the number of 16 to 18 year-olds starting an apprenticeship in the first half of this academic year has dropped by 12%. We urgently need to improve a situation in which two-thirds of large companies in this country do not offer apprenticeships. Why will the Government not legislate to require those large firms getting government contracts to have active apprenticeship schemes, ensuring opportunities to work for the next generation?

The only direct mention of infrastructure in the gracious Speech is the two HS2 Bills. I declare an interest, as the current route for HS2 goes close to my home—not, as I may have mentioned to the noble Earl, Lord Glasgow, close enough to qualify for compensation, although I have my hopes. I have made clear before that I support my party’s approach to the scheme although, like the noble Viscount, Lord Trenchard, and, I think, the noble Earl, Lord Glasgow, we do not yet understand the rationale for the introduction of a paving Bill before decisions have been made on our airports, for example. We have made clear that we will look to ensure that HS2 is fully integrated into the existing rail network, with services running directly to a wide range of towns and cities in addition to those already placed on the new line, which amount to a very small number; affordable to use, rather than a premium-priced service aimed at business passengers; not at the expense of investment in the existing network, including the rolling programme of electrification, upgrades and new rolling stock; and required to generate at least 1,000 apprenticeship opportunities for every £1 billion of public investment.

However, surely we need to look beyond HS2 and its 30-year payback. As the noble Lord, Lord Forsyth, said, we need jobs now. With our economy flatlining, the country is crying out for investment in infrastructure to create jobs, boost confidence and strengthen our productivity and competitiveness, particularly in the regions. Both the CBI and the EEF criticised the Government for their failure to get on and deliver on infrastructure. The last infrastructure pipeline update given by the Government shows that of their 576 projects, less than 5% were completed or operational. Why was there not more in the Queen’s Speech to take that forward? Where are the practical measures on housebuilding, which would kick start the economy with jobs in the construction industry while providing much needed homes?

Finally, what on earth is happening on communications? Communications are vital to every aspect of our lives today—from business to leisure and accessing public services. Everyone should be able to access a decent level of communication, including phone and internet. Our content and broadcast industries need copyright protection and certainty. The communications sector was worth £50 billion, employing 530,000 people, in 2011, and of course it supports the wider economy. The internet contributed 8.3%, or £121 billion, of the British economy in 2010—a bigger share than in any other G20 major country, and is predicted to grow at 11% a year over the next five years. In her excellent maiden speech, the noble Baroness, Lady Lane-Fox, argued that the Government should develop a strategy and a programme that would get as many people online as possible. We agree. A communications Bill is desperately needed, focused on helping people to get broadband in rural areas, a point picked up by the noble Baroness, Lady Byford; helping people improve their digital skills through training and education for both business and personal reasons, as more public services will be delivered online; ensuring that those who do not have a computer or broadband at home can access those facilities from a public library; and making sure that older people, disabled people and people with learning difficulties have access through the appropriate design of services and equipment.

This debate has been primarily about the economy, business and transport but it has also dealt with local government, and the main Bill in that section is the Local Audit and Accountability Bill. Having announced the abolition of the Audit Commission three years ago, the Government have finally come forward with a proposal to try to fill the vacuum they have created. However, we must ensure that taxpayers get value for money and that we maintain high standards of audit. We have concerns about whether the plans will produce an open and competitive market—contracts may well be awarded to a small number of firms—and there are real uncertainties about the level of future audit fees.

The draft Bill was heavily criticised in pre-legislative scrutiny. The committee questioned the estimated savings claimed by the Government. It also called for a new financial impact assessment, stronger safeguards for whistleblowers, and better value for money compressions to enable more informed judgments about the effectiveness of local expenditure. I hope that the Minister will be able to reassure us on these points.

Twelve months ago, we warned that the Bills in last year’s programme would not do much to get the economy going again. Today, the economy is flatlining and there is little, if any, hope that the legislative programme announced so far will bring the growth and jobs that we so desperately need. For me, the saddest thing is that the Government who legislated for a fixed-term Parliament of five years seem to have run out of steam after three—what a waste.