Queen’s Speech

Lord Whitty Excerpts

Wednesday 16th May 2012 Lords Chamber

[Baroness O'Cathain]

My Lords, as has already been said, it is an honour to take part in a debate on the gracious Speech. Like so many others, I was tempted to take part in the debate on constitutional matters, but on a self-denying ordinance I took a vow not to on the basis that everything that should be said or could be said on the reform of the House of Lords had been said. I am not sure I was totally right about that because there were one or two nuggets during all those hours of debate—and we should not forget that we also had a full day of debate a short time before that debate. Frankly, I do not think we should publicise the fact that we spent two full debating days on 17 words in the Queen’s Speech, because that is what it amounted to. It would be difficult to justify, particularly as they came, as I have said, hard on the heels of a full day’s debate. There is also, I am afraid to say, overwhelming evidence that, outside the precincts of Westminster, very few people are even remotely interested.

I believe that there are many thousands, indeed many millions, outside the precincts of Westminster who are intensely interested in the issues being considered in today’s debate: agriculture, business, the economy, energy, the environment, local government and transport. Many of the contributors to this debate have commented on some or all of them. Each one of these issues is of huge importance to all the citizens of our country, whether they are really aware of it or not, and we should keep our minds and eyes firmly fixed on those instead of on our little local difficulty. Our responsibility is to ensure that all Bills related to the areas we are considering today are carefully scrutinised, debated and improved through the legislative process in this House, using all our experience and expertise—and thus negating, it is hoped, the statement of the Deputy Prime Minister that in the House of Lords we have only a “veneer of expertise”.

Many of the excellent attributes of our House have been described fairly fully in recent debates, but sadly we are frequently subjected to negative pronouncements which in common parlance are described, I believe, as “bad mouthing”. The economy, particularly the debt and deficit situations—too many confuse these—the sorry state of a large number of pensioners—we know where that stems from—and the truly worrying situation of unemployment are not collectively joyous and are constantly thrown at us from the Benches opposite. When I point out, as I shall again, that all of these issues are to a large extent part of the legacy of the previous Government, the orchestrated groans become full-throated. I hear no response.

The noble Baroness who is the Leader of Her Majesty’s Loyal Opposition in the House of Lords and who I definitely number among my personal courageous friends, told us on 9 May that the “real record” of this Government is,

“of businesses and shops closing; of people being put out of work”.—[Official Report, 9/5/12; col. 12.]

The wording of the Motion of Regret tabled today includes regret about the,

“one million young people out of work”.

One needs to have a very short memory indeed not to make an instant link between that wording and the statement made by the Governor of the Bank of England in the past two weeks to the effect that the previous Government were directly responsible for the loss of—yes—1 million jobs. The noble Lord, Lord Myners, who sadly is not in his place, put up two blacks today. He certainly put up a black about the grocery adjudicator, but he also put one up about the Governor of the Bank of England. But, after all, was the noble Lord not actually part of the process that reconfirmed the Governor of the Bank of England’s reappointment during the period of office of the previous Labour Government?

Happily, something is being done about those 1 million jobs, as we have seen in today’s figures, but, sadly, we can expect yet another twisting of that news by the BBC. In the past few days, a presenter on Radio 4’s “Today” programme said that there was no mention of growth in the Queen’s Speech. No mention of it? Let me read out the first sentence of the speech:

“My Lords and Members of the House of Commons, my Government’s legislative programme will focus on economic growth, justice and constitutional reform”.

Episodes like that make me warm even more towards the re-elected Mayor of London. He has stated that,

“the prevailing view of Beeb newsrooms is, with honourable exceptions, statist, corporatist, defeatist, anti-business, Europhile and, above all, overwhelmingly biased to the Left”.

I could not agree more. Contrary to what is a fast-developing tendency in this House to score points, to increase the number of “blame statements” and rubbish this Government’s efforts to remedy as solidly, quickly, fairly and permanently as possible the legacy of 13 years of economic mismanagement, I believe that we must stop talking down our country and our economy, and in particular the heroic efforts being made in many sectors to build up what has been so damaged in the past.

The Opposition constantly accuse the Conservatives of destroying British manufacturing industry. I suggest that the doom-mongers should take a good look at what has happened to the British motor industry since 2010, and in doing so dispel that accusation. The statistics and information I am about to impart come from the Society of Motor Manufacturers and Traders. They show that during the last five years of the Labour Government, jobs in the motor industry steadily declined year on year from 868,000 to 736,000. That inexorable decline stopped in 2010 when there was a slight increase of 1,000 jobs. In 2011, some 9,900 new jobs were created, and just as important, more than 12,000 jobs were safeguarded. Net investment during those last five years of the Labour Government—

[Lord Whitty]

My Lords, this is the third time that someone from the Benches opposite has claimed credit for the very welcome revival of the motor industry. Does the noble Baroness not accept that the reasons for that revival, after a disastrous prior record, were threefold? The first was the intervention by my noble friend Lord Mandelson on the motor scrappage scheme and other incentives to the industry. The second was the better relations that were established between management and trade unions in the industry, and the third was very substantial investment by Japanese firms, nearly all of which occurred prior to the election in 2010.

[Baroness O'Cathain]

I absolutely refute all of that, but we can talk about it afterwards because the noble Lord is taking time out of my speech, and I will not have that. In passing, has anyone in this House mentioned the fact that the Corus plant which was mothballed by the said noble Lord, Lord Mandelson, in February 2010 was reopened a few months back and, since last Friday, is exporting steel?

I understand that I shall get bad marks if I carry on. All I want to say is that I think it is time that we understood that good things are happening in this country. We should stop peddling gloom and doom and get down to supporting the measures in the Queen’s Speech.

--- Later in debate ---

[Lord Whitty]

My Lords, my main theme tonight concerns economic strategy and the fact that the eurozone authorities and our own coalition Government got diagnosis and prescription profoundly and damagingly wrong, for the reasons that were spelt out so brilliantly by the noble Lord, Lord Skidelsky. First, I have some good news for the Government. Unlike my noble friend Lord Myners, but like another noble Lord who has just spoken, I strongly support the groceries code adjudicator. I champion the consumer, as does the noble Baroness, Lady Wilcox, but we both recognise that it is not in the interests of the consumer for the supermarkets to be able to wipe out farmers and other small producers who are part of the food chain in this country. Therefore, she will have my support on the Groceries Code Adjudicator Bill, although it needs a bit of strengthening.

I welcome other Bills in part. Some of the electricity market reforms proposed in the energy Bill are desirable but it will fail to tackle the problem of investment in nuclear and renewable energy and the problems associated with decarbonising our energy use and of fuel poverty. I had hoped that we would have a fully fledged water Bill. However, as the noble Baroness, Lady Parminter, said, pre-legislative scrutiny may give us a chance to sort out the abstractions regime. That is desperately needed in the light of the pressures imposed on our water resources by climate change and population increase. Therefore, I welcome the commitment with regard to a pre-legislative Bill.

I may also support a few parts of the enterprise and regulatory reform Bill. The rationalisation of the competition structure is sensible. I welcome the green investment bank although I think that it could go significantly further. However, I also fear that better regulation will lead to a substantial attack on environmental regulation and employment protection, which I do not wish to see.

As regards the Financial Services Bill, I welcome the implementation of much of the Vickers report, particularly in relation to the ring-fencing of bank activities. However, I am afraid that the rest of the Bill is mostly about the location, labelling and institutional structure of the regulators. Frankly, changing location from the FSA to the Bank of England or changing names on doors does not give much comfort to small businesses that cannot get capital from the banks, to those seeking first-time mortgages or to those who are excluded from conventional credit and are falling prey to legal or illegal loan sharks. Above all, I do not think that the Financial Services Bill goes very far to tackle the turmoil in the money markets and the failings of the banking system across Europe and much of the world. That is the backdrop against which we are discussing this matter.

Like the noble Lord, Lord Bates, I do not share the schadenfreude that is felt in relation to the problems of the eurozone. I also fear that the coalition is believing its own propaganda and adopting the wrong policies partly as a result. The only real success that the Government have gained from their statements on economic policy is that they have managed to convince a fair proportion of the press and the public that the crisis is all the fault of the Labour Government, despite its global nature. Frankly, the Labour Party has not been all that good at defending its record. We have heard that mantra repeated today. There was a Labour Government failure: namely, the failure of banking regulation, which was far too light touch. However, it was not as light touch as the present Chancellor then said; he wanted it to be considerably stronger. Nevertheless, it was not a failure of macroeconomic policy. Up until 2008, the UK debt to GDP ratio was lower than that of most OECD countries and lower than it had been for much of our history. Indeed, that applies also to other countries in the eurozone.

With the exception of Greece, this crisis is not primarily one of public finances; it is a problem with the banks. That was true in Ireland four years ago and it is true in Spain this week. By putting all the burden of resolving it on public finances, the symptom but not the cause of the problem is being tackled. We have the money markets behaving like packs of feral dogs trying to find the weakest link and Governments who are more afraid of the ratings agencies than they are of their own electorates. When their electorates pronounce, what happens? The Greeks are told to vote again until they get it right, and no doubt if the Irish vote no in the referendum, they will be told the same. However, they will not get it right on that basis because it is the wrong strategy.

I speak as a long-standing pro-European and indeed as a supporter of the euro, and I say this with a heavy heart. I think that what has happened in Europe, reflected here too, is that the decent instincts of post-war social democracy and Christian democracy in Europe have been replaced by a combination of the revival of the understandable German terror of hyperinflation and by ideological neo-liberalism, and lying behind the austerity strategy is the belief that you can win the battle against this crisis only by reducing the size of the state. That is what is behind the strategy in Europe and it is true here in Westminster. Who is paying for this? It is not the bankers, who caused it, but the poorest regions of Europe and of Britain, the youth of Europe and the most vulnerable workers, with inequality growing between regions, between rich and poor, between genders and between the generations.

I recognise that of course there has to be discipline in relation to public spending and the management of our debt, but that discipline has to take into account the profundity of this economic cycle and, if the financial stability pact is so inflexible that it cannot do so, then it is not only Greece that is likely to be the victim.

In the UK we have adopted much of the same approach. At the moment, it looks milder than it does in Greece and Spain but that may be a matter of time. We have only just had a Budget that rewarded the rich and penalised pensioners and pasty eaters, and of course 90% of the cuts have yet to come. We have now had a Queen’s Speech that does even less to tackle this economic problem. It has not done very much for small businesses; it has done nothing at all to stimulate the housing market, despite the total dysfunction of that market; it has done almost nothing for green investment, although we could build on the green investment bank; it has done nothing for the regions, infrastructure or manufacturing—there is no investment bank, for example—and nothing for employment, except, bizarrely, to make it easier to sack people.

All our leaders can do is to repeat the mantras of the austerity strategy. The noble Lord, Lord Skidelsky, calls that denial. To me, it is a bit reminiscent of the dreadful twilight days of the Soviet Union, with leaders reasserting failed nostrums and phoney statistics in provincial tractor factories. The country deserves better, Europe deserves better and the Government need to do better.