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7.28 p.m.

The Viscount of Oxfuird: My Lords, following the noble Lord, Lord Bruce of Donington, is rather like being an ab initio pilot behind the wing commander in charge of the Red Arrows--a lot of ground is covered; there is much colour; and there is a slight feeling of dizziness, certainly for myself.

I should like to join other noble Lords who have complimented our two maiden speakers. I follow very much the line of my noble friend Lord Boyd-Carpenter

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in saying how much their professionalism has added, and will add, to the gravitas of our deliberations in the House. I must admit that the noble Lord, Lord Gladwin, touched a chord when he referred to his involvement with training, particularly that of the Ford Motor Company. I was once employed by the Ford Motor Company. It has the most excellent training facilities. The ones I know are at Dagenham. They are superb. They cover the full range of the company's employment. I hope that my noble friend Lord Nickson will come here from Scotland as frequently as possible. His deliberations will be warmly welcomed. In particular, he has had the opportunity of being at an altar that I know a little about--but that is for another occasion.

I wanted to make a short contribution to this debate because I believe that Her Majesty's most gracious Speech has come in for rather more criticism in your Lordships' House and in the British media than it deserves. Perhaps it can be likened to the jug of water that rests on the Table in your Lordships' House. There are those who would describe it as half empty and there are others like myself for whom it is half full.

In the past 15 years we have seen in the field of industrial and economic affairs in this country some remarkable changes and, more importantly, a reversal of some of the worrying trends that have bedevilled our country since the end of the Second World War. Of course, it is convenient and popular to forget some of the achievements of the present Government in the early 1980s because that seems a long time ago and perhaps today it is not fashionable. In reversing the errors of decades, we are effectively pushing an increasingly heavy snowball up a hill and I believe that we should not yield to the siren voices of criticism, no matter how eminent their source. The benefits that we are seeking are difficult to achieve and will take time. We must "keep on keeping on".

As has been recalled already, the most gracious Speech included a commitment to:

    "continue to promote enterprise, to improve the working of the labour market, and to strengthen the supply performance of the economy".

Today some of your Lordships have not been slow to criticise the Government in some areas of their performance. But the other side of the coin is that they have created an environment of low interest rates, low inflation and good industrial relations. They are exactly what is needed to get on with the job of building Britain's competitive infrastructure.

In many essential areas--and I think of education and training, a respect for the engineering profession, a dedication to quality, the encouragement of inward investment, support for GATT and a belief in the work ethic --an environment has been created that has enabled our people to turn back the clock on some of the mistakes for which we have all been responsible in the past 50 years.

Speaking in another place in 1974, Mr. Tony Benn said:

    "In developing an industrial strategy for the period ahead, we have the benefit of much experience. Almost everything has been tried at least once".

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I do not often agree with Mr. Benn but in that I do. We can certainly learn a lot about our future industrial strategy by studying and avoiding the mistakes of the past.

In the field of education and training, there is clear evidence that we have learnt from the errors of the past. We are beginning to reap the investment by both government and industry in effective industrial training and the requirements of industry have begun to filter through to our teachers in the classroom. Here I would commend the work of my noble friend Lord Caldecote and Mr. Peter Gummer in their support for the effective charity, Understanding Industry. It has done much to increase in the classroom the awareness and appreciation of the importance of industry. Let us consider that in 1991 30 per cent. of those leaving school declared that they wanted to go into the media while only 7 per cent. wanted to go into industry. We have ground to make up. It is in the mind. This charity and many others are addressing the problem.

Within the engineering profession there is evidence that the fragmentation of the past is being overcome. The current initiative, led by Sir John Fairclough, to achieve a greater coalescence within the engineering profession by radically restructuring the Engineering Council must be applauded. This must help to improve our competitiveness as an engineering nation when compared with, say, Germany, France or Japan--nations where the profession of engineering earns the highest respect.

In the field of quality management and that of total quality, progress is also being made. It is extremely heartening to know that recent independent consumer research in the United States of America places Rover and Jaguar in a most favourable light when compared with Mercedes or BMW. Indeed, this evidence of recommitment to the old values of craftsmanship and quality within the British workforce and management has enabled this country to attract the levels of inward investment which are such a contributory factor in pulling down so positively our national level of unemployment. The facts are incontrovertible, certainly to those who read the statistics, and even the press cannot resist the good news. This country has received 40 per cent. of all European inward investment. The UK now attracts more inward investment than any other country in the OECD, including the United States. Beware the Social Chapter! It would rob us of jobs. Let us tread with caution.

While dealing with industrial and economic affairs, it is important not to lose sight of the significance of the Uruguay Round of the GATT negotiations concluded in Marrakesh this year, in which the Government and the British EC Commissioner, Sir Leon Brittan, played such a strong part. This round should provide a substantial boost to world trade and hence to international prosperity, so we dare not be behind in the field of competitiveness. It brings new opportunities for our exporters, expands the choice for our consumers and acts as a spur to economic efficiency worldwide.

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Competitiveness and productivity are ruthlessly linked. We are seeing a re-emergence at all levels of the work ethic. This is evident in the recent strong growth in our national productivity which is producing a dramatic fall in our unit labour costs. They are important; they are part of productivity.

Since 1959 I have spent most of my time marketing British industrial equipment abroad and, from the practical point of view, I welcome all these changes. Our exporters have a golden opportunity to go abroad with their heads held high and to sell the products made in this country. It is my belief that during the next year we shall see an even greater improvement in our balance of payments position than is currently being forecast by the Treasury.

My contacts with my international friends--some of whom are in Russia, China, India, Singapore and parts of the Far East--underline my belief in our economy. Their response has been stronger than has been evident today in some quarters of your Lordships' House. They are a considerable distance away from this Chamber.

It was in 1769 that Sir Joshua Reynolds made an address to the students of the Royal Academy in which he said:

    "If you have great talents, industry will improve them: If you have but moderate abilities, industry will supply their deficiency".

As a nation, Britain has proved over and over again that its people are possessed of great talents. I believe that, thanks to the environment created by our Government, we are set fair to capitalise on the many new opportunities that are available to us, to prosper and to win.

7.40 p.m.

Baroness O'Cathain: My Lords, in the gracious Speech the lines that gave me most comfort have already been picked out by the noble Lord, Lord Boyd-Carpenter. They are:

    "My Government will continue with firm financial policies designed to support continuing economic growth and rising employment, based on permanently low inflation".

Continuing growth, rising employment and permanently low inflation are surely the aims of all of us who are concerned about the economic situation in the UK. If those aims are achieved, all will then follow: as the noble Earl, Lord Ferrers, said, greater wealth creation which, of course, is essential to fund education and health and social services, so ably described in the marvellous maiden speech of the noble Lord, Lord Nickson; increased competitiveness in international markets whose management of inflation is probably not as good as ours; and, above all, a re-establishment of confidence in ourselves as a successful nation which is respected overseas.

The confidence factor is so very important. The all too human reaction to a constant diet of bad news, destructively critical comment, point scoring by opportunists and a complete absence of any acknowledgement that some things are good or improving is to believe that all is bad and then to be sucked down into a spiralling demise of confidence. Belief in one's country and oneself is important.

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At present the sad reality is that there is a massive "feel bad factor" which frankly belies the economic reality of the United Kingdom. Why is that? No, I am not going to lay it at the feet of the press nor, indeed, at the feet of government. In my view it is due to a great extent to economists.

Economics has always been called the dismal science, which is a trifle unfair. I speak as a one-time economist, and I suppose once an economist, always an economist. I guess that for a few years past, economists have probably produced a preponderance of dismal forecasts and analyses. But even when matters improve on the economic front, the good news does not seem to be covered or, if it is, it scarcely impinges on a population that does not seem to understand.

Why does the population not understand? It is because, if one of my theories is correct, the language in which the news is conveyed is couched in such turgid terms as to be unintelligible. Last week I collected an armful of statistics from the Printed Paper Office. Reading them--and I am an economist--was a complete switch-off, despite the fact that they contained good news. If only time were spent translating the statistics into something more meaningful in non-economic jargon we should be much better off. Not for nothing is the word "waffle" an acronym for Wordy Arguments Flow From Long-Winded Economists. Economists should find a more understandable way of explaining that, for example, in the three months ended August 1994, compared with the same three months in 1993, the balance of trade showed a reduction in the deficit of some 30 per cent. They should also be able to explain why that matters.

It says in the statistics that excluding "oil and erratics" --nice economic jargon--the deficit also decreased from £4.1 billion to £3.6 billion. In turn, that masks a 10 per cent. increase in exports. Those are all in the right direction and they all matter. Another example is that GDP at market prices in 1993 is 14.4 per cent. up on the same figure for 1990 and, even more important, 6.1 percentage points up on 1992. Volume statistics, which for a long time were below the 1990 figures because of the recession, increased in the fourth quarter of 1993 and are growing stronger all the time. Economists should explain why that matters.

Employment matters. It is referred to in the gracious Speech. The percentage of unemployment, the unemployment rate, in October 1993 was 10.1 per cent. The latest provisional figure for October 1994 is 8.9 per cent. That is still too high, but at least it is going in the right direction.

I could go on but in the interests of time I had probably better not. However, I should point out that more overtime is being worked and that therefore there are higher total earnings. Higher productivity is being achieved and the public sector borrowing requirement in the first seven months of 1994-95 financial year at £19.2 billion is a lot less than the £26.4 billion for the same period the previous year. All of that definitely matters. It is good news. Of course, there is bad news as well.

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All of that contributes to growth and a reduction in unemployment. It is the result of government policy. But probably the greatest cause for congratulation of the Government is the way in which inflation has been brought under control. It is such a long time since the period of double digit inflation in this country--even inflation of 20 per cent. plus--that we probably do not remember it. Those of us who do remember it may have been in employment and it did not really matter too much because we had inflation-linked wage increases.

But I remember it. I remember the enormous burden of worry which my father, who was a retired civil servant, had at the end of his days. He was not on an index-linked pension. He had saved all his life. He had taken a very cautious approach, even to his expenditure, but at the end of his life his savings were almost worthless because of rampant inflation.

If a recent article by Anatole Kaletsky in The Times is to be believed, it could be that those days have gone forever. But we cannot be complacent and I welcome the firm commitment in the gracious Speech to maintaining permanently low inflation.

I do not wish to fall into the waffle trap but I should like to make one suggestion before I sit down. If there could be a common ground of agreement, however narrow, that all politicians acknowledged that there are very positive trends in our economy, that in turn could be transmitted to the population at large and lead to a genuine "feel good factor". I suggest that that may be a task for the seven wise men appointed to the Treasury.

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