King’s Speech (4th Day)

Viscount Hanworth Excerpts

Monday 22nd July 2024 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, the incoming Government are right to express dismay at the state of our nation and the economy, and to be cautious about the prospects for achieving the growth that might alleviate some of our problems. Our productive capacity is so attenuated that any economic expansion is bound to encounter obstacles that will limit it.

The expansion of the building industry in pursuit of new housing will create a scarcity of building materials that will lead to sharp price increases. Also, since Brexit, the lack of skilled labour in the industry has worsened.

The expansion of our electricity-generating capacity, via windmills and solar panels, will demand equipment that is not manufactured in the UK. Such an expansion that depends on imports is bound to lead to a problem with our balance of payments.

A recent report commissioned by the Conservative Government extolled the virtues and even the necessity of foreign inwards investment. According to the report, this should provide the funds to sustain investment in industrial infrastructure and alleviate problems with the balance of payments. The report seems to have found favour in some quarters of the Labour Party. I fear that this report has encouraged a common delusion. Inwards foreign investment has rarely been directed at creating and sustaining industrial infrastructure. Instead, it has been aimed at acquiring the ownership of British enterprises. Such foreign investment has been favoured by our financial sector, which derives an income from mediating the sales of our assets. One of its effects has been to increase the demand for the pound in the currency markets, which has enhanced its value. The overvaluation of sterling has made it difficult to sell our manufactured goods abroad; this has been one of the principal reasons for our economic decline.

One way of addressing the problem would be to require our central bank to purchase foreign currencies at times when they are cheap and when the pound is overvalued; this should depress its value. This method of controlling the exchange rate is widely practised by other countries. However, ever since the debacle of Black Wednesday on 16 September 1992, when the UK was forced out of the European exchange rate mechanism, it has been a nostrum of Conservative Governments never to intervene in this way in the currency markets. Such inhibitions should not constrain the present Government.

Seeking to expand our exports should be part of the strategy for industrial recovery. We should also seek to invest in the technologies that will be essential to a green industrial revolution and to provide such technologies to the rest of the world. Advanced nuclear technologies will be a vital element in seeking to decarbonise our energy supply. Here there is a tale of woe to be told. Unless we take steps to support projects to develop new nuclear technologies, we shall have to depend on foreign suppliers.

I will mention three leading UK projects to build fourth-generation nuclear reactors. They are from Moltex Energy, Copenhagen Atomics, and newcleo, and we are in danger of losing all three of them to other countries. Moltex has sold much of its intellectual property to the Canadians, and is now going slow with its UK development through lack of resources. Copenhagen Atomics, which had also been calling itself UK Atomics, is withdrawing its resources from the UK. Newcleo has been constrained to go to France for its nuclear fuel. Our Office for Nuclear Regulation has declined to embark on a generic design assessment of the reactor, declaring that it would be premature to do so, albeit that the equivalent French agency, the Autorité de Sûreté Nucléaire, is doing so with alacrity.

The message is that unless we make immediate declarations of support for these endeavours, we shall have no projects to supply the next generation of nuclear technology, which promises enhanced safety and facilities for disposing of nuclear waste. It looks as if we, who were once the leaders in civil nuclear technology, will have to rely on other nations to provide the technology in the future.