Queen's Speech

Lord Young of Norwood Green Excerpts

Wednesday 2nd June 2010 Lords Chamber

[Lord Young of Norwood Green]

My Lords, I, too, rise, after some time, to congratulate the noble Baroness, Lady Wilcox, on her appointment and the noble Lord, Lord Henley, on his reappointment. I also congratulate the noble Baroness on her opening speech. I pay tribute to my noble friend Lord Myners for his valedictory speech from the Front Bench. I, like other noble Lords, lament his passing to the Back Benches.

There is no doubt that the country faces the serious challenge of reducing our deficit, and the country needs to know how the Government will do that. Will it be cut fairly without damaging front-line services or hurting the poorest families and—this vital point has been made again and again in a variety of ways—without putting the recovery or future growth at risk? These are the criteria that we will apply when judging the coalition Government’s plans.

On this basis, the recent announcement fails on four counts. On efficiency savings and cuts, cutting now before the recovery is secured risks having higher not lower borrowing. The removal of growth-supporting measures such as university places and RDA business support this year, when they are needed most, cuts away at the investment that will deliver the rebalanced growth that we will need in the years to come. Scrapping the child trust fund even for the poorest families and families with disabled children is a breach of the Conservative manifesto commitment and will make it harder for families to help their children to get a good financial start in life. The Conservatives have broken their promise that the entire £6 billion will be made up of efficiency savings rather than cuts to services and benefits.

The new Government inherit an economy in which the worst of the recession has ended and the recovery is under way, but that recovery cannot be taken for granted, as many contributors have said. The challenge now is to embed and to secure the recovery, not to put it at risk. Where the Government take steps to do that, we will support them, but taking money out of the economy now while the recovery is still fragile is a risk that we should not be taking. As Vince Cable in another place used to argue, damaging the economy now while the private sector was still weak would lead to higher not lower borrowing, to people out of work and to firms not paying tax, and would cost us all more. Does this coalition believe that unemployment is a price worth paying?

Before the election, the Conservatives explicitly stated that they would protect front-line services, but that promise is not being honoured in the light of recent announcements. In fact, the Government’s savings are not just in bureaucracy and back-office staff; they are real cuts to real services and will affect people. Children, even the poorest and the disabled, whom the Conservatives originally promised to protect from cuts, as I have said, will stop receiving child trust fund payments. Business support through regional development agencies is being cut. The rollout of the future jobs fund, which offers work experience or training to 18 to 24 year-olds who have been unemployed for more than six months, is being cancelled. The number of new university places, which the Labour Government announced for this year, is being cut by 10,000. That, again, goes against the Conservative manifesto promise of an extra 10,000 places.

Energy has been the subject of a lot of debate all through today. We welcome measures that we believe will help to lower emissions, increase energy efficiency and encourage growth in low-carbon energy, and which would have appeared in our own legislative programme. These include help for home energy efficiency that would be paid for by energy savings, additional funding for carbon capture and storage, a smart grid, feed-in tariffs and an expanded offshore grid. However, it is clear that the Government cannot offer a coherent and long-term agenda for creating a secure low-carbon energy mix and reducing our domestic emissions. Nor can they provide leadership on tackling climate change in the international arena. The Prime Minister has failed to demonstrate leadership on the low-carbon agenda, having tried and failed to turn the Conservative Party green. Many senior Conservative politicians and a majority of general election candidates, many of whom are now MPs, refused to back action on climate change and low-carbon energy, while across the country Conservative councils block the majority of wind-farm proposals.

The new Government still need to answer many questions about their energy and climate change agenda. How can they claim the credibility to deliver a new generation of nuclear power stations as long as the Secretary of State is an avowed opponent of nuclear power? How will they deliver on renewables and on action to reduce emissions while many Conservative MPs and councillors remain sceptical about climate change and the need for low-carbon energy? How will the targeting of industrial subsidies for cuts help our transition to a secure low-carbon economy? Surely scrapping the Infrastructure Planning Commission is likely to prove a charter for delay on vital infrastructure projects and for nimbyism.

As regards transport, the decision to scrap the third runway at Heathrow and an additional runway at Stansted will not reduce the number of flights or make a contribution to a greener environment. All it will do is hand the business advantage to Schiphol Airport in Amsterdam, Charles de Gaulle Airport in Paris and Madrid Airport. There will not be fewer flights. The business will be handed to our competitors.

I welcome some assurance on the future of Crossrail, which many people agree is a vital contribution to transport. We welcome the commitment to high-speed rail, but I return to my previous point on the scrapping of the Infrastructure Planning Commission. Will we be able to deliver Crossrail?

As to comments on Royal Mail and the injection of private sector capital, far be it from me to deny previous government policy on this. However, we still believe in a publicly owned Royal Mail. Before making a judgment, our view will be based on whether proposals will deliver reliable and high-quality postal services, which are underpinned by a strong universal service for households and businesses in Britain. Our vision is of a Royal Mail with a secure future and in good health, which provides customers with an excellent service and provides employers with rewarding employment. We want to protect the universal service. The British people rightly cherish the principle of letters collected and delivered anywhere in the UK, six days a week, for a single affordable price. Finally on this issue, as we know, the history of employment relations in Royal Mail has been fraught with difficulty. We have arrived at a situation where the modernisation programme has been agreed. Disturbing that situation needs careful thought.

Given the number of speakers, I will pick out only one or two points; nor would I want to deprive the noble Lord, Lord Henley, the sheer pleasure of answering the range of questions. The noble Baroness, Lady Wilcox, said that the cuts would improve efficiency and spoke about reckless borrowing. A number of comments were made about the extent of government investment. Perhaps we should remind ourselves that some of that investment will have a good return. The investment put into Lloyds and RBS would be capable of achieving a significant return for the Government should they wish to take that opportunity.

I welcome my noble friend Lord Bhattacharyya’s reference to the importance of the minimum wage and the extra money put into the science budget, as well as his analysis of the importance of manufacturing and the role of the RDA in the West Midlands. My noble friend Lord Haskel pointed out that Britain has become more prosperous and greener, and is a better place to live. He also pointed out the difficulty that the Government will have in their attempt to cut red tape and at the same time say that sometimes there is a need for more regulation. Surely we should go not for an approach which says that if we bring in one piece of regulation we will remove another, but for an approach which says that we are looking for better regulations.

I also welcome the appreciation expressed by the noble Baroness, Lady Garden, of the progress that was made on apprenticeships, and I welcome the Government’s initiative to increase them. However, I am concerned that that is going to remove money from Train to Gain. We should not forget that we need to address the skills deficit that exists in this country, and the fact that the Leitch report is still relevant. I utter a word of caution in that area.

The noble Lord, Lord Oakeshott, suggested that my noble friend Lord Myners supports the Government’s proposals on capital gains tax. I should also utter a word of caution on my noble friend’s behalf that that is not his position; I went to the horse’s mouth and he assures me that that is not what he said.

My noble friend Lord Whitty and I will have to disagree on one or two issues, such as on the question of Royal Mail and on a third runway at Heathrow. I take this opportunity to congratulate the noble Lord, Lord Low, on his balanced analysis of the way to deal with the deficit and the importance of the pace of any reduction. My noble friend Lady Kennedy made a strong plea for fairness when finding our way through the deficit problem, and that this should be dealt with through strong growth and high employment.

Given the number of economists we have in the Chamber, it is not surprising that there was some difference of opinion. I cannot help reflecting on the old cliché that if they were laid end to end, they still would not reach a conclusion. However, I must admit that I was captured by the analysis made by the noble Lord, Lord Skidelsky, of the way forward and the relevant point he made about cutting the deficit now: how will that actually promote the recovery? On that note, I shall leave it to the noble Lord, Lord Henley, to answer the questions.