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There must also be fair and full access for broadcasters so that they face no access barriers of the kind which exist at present in some parts of cable television. There must be fair access for viewers to all broadcasting services via a single set-top box. Receiving equipment must carry terrestrial as well as satellite broadcasts. Otherwise, if one has receiving equipment which may be controlled by someone from satellite which--surprise, surprise--cannot receive terrestrial digital television, then the terrestrial broadcasters will be at a disadvantage. We must ensure that that does not happen, so that aspect requires tight regulation. In my view, it would be better done by ITC rather than Oftel, as proposed in the paper, simply because ITC has a more immediate concern for the broadcasting principles at stake.
We are attracted--anyway I am--by the ITC's proposed draft code for conditional access systems. We need strong regulation to ensure fair competition among the multiplex operators, especially among the conditional access systems, the so-called "gateways", and also among the navigation systems, those processes that describe where one can go on the system. Of course, that provides many opportunities to give preference to those who come first and there must be free access there. That is why we sympathise with the ITC's draft code.
We are always concerned on this side that there is insufficient quality criterion in the Government's proposals in the broadcasting sector. In the proposals to allocate the digital multiplexes, there is no criterion for quality whatever--just a requirement for speed of investment and variety of service. We feel that quality should always be there as a criterion. The situation is even worse than under the 1990 Act which had that marginal quality threshold. I believe that the ITC should be allowed, in allocating the multiplexes, to make quality assessments, as it recently did--very courageously, in my view--on the Channel 5 allocation.
On a separate but critical aspect I must mention the question of the televising of great national sporting events. We thought that the 1990 Act had solved that, but it did not. It could be possible for all great sporting events to be on satellite soon. We do not wish that, so we will look at ways of securing the basic principle of national access.
Overall, in the new Bill we need a delicate balance between freedom and regulation. Broadcasting is a major and dynamically growing sector, therefore it needs encouragement for rapid investment. We need entrepreneurs to invest in sufficient digital multiplexes to launch a full range of broadcast services. The licensing arrangements must not be so onerous and so pernickety as to deter them. That sometimes needs a loose rein. We should also remember that, as in 1990, one cannot legislate in rigid detail for such a fast moving and fast changing industry.
Lord Cooke of Islandreagh: My Lords, this afternoon we have the opportunity to discuss industry and the economy in this debate on the Queen's Speech. I shall not attempt to compete with the technical jargon--his own description--of the noble Lord, Lord Donoughue. I wish to concentrate quite simply on manufacturing industry because I believe that we now have a window of opportunity of which we should take advantage in the, perhaps, short time that it will be open.
There can be few things more important to the nation than a large and vibrant manufacturing industry. It is essential to support the myriad of service activities which are today connected with manufacturing and which provide so much employment. Manufacture and trade are now international, they are mobile and will move to wherever they judge is the best place. The United Kingdom, I believe, has some advantage when firms come to place themselves and recent announcements indicate that. It is something we must develop, while we have an advantage, because other countries will make an effort and will catch up if we do not move further.
I believe that it has now been realised that trade in an enclosed European Union is not the answer to all our needs. In fact, we would be greatly handicapped if the Prime Minister had not had the foresight to opt out of the social chapter when Maastricht was being negotiated. It would be difficult to over-emphasise the importance of remaining out of the social chapter. Most European countries are now at a great disadvantage and I single out Germany, where a half-trained person costs £20 an hour compared with £6 or £7 in the United Kingdom. There are multinationals now manufacturing in Germany which are trying to get out because of the very high labour costs. We have had one or two of those companies coming to Northern Ireland looking for a better place to which to move.
I think it should be understood, though, that few employers regard the opt-out of the social chapter with minimum wage requirements as merely an excuse to pay low wages. Most employers do pay good money to well trained, productive people. To have to pay a large minimum wage to someone young and inexperienced is ridiculous; it simply means that fewer people will be employed.
We now have multinational manufacturing companies looking to see how they should position themselves. What should we be doing to make the most of this opportunity? Government have a great part to play and the Minister introducing the debate this afternoon
Perhaps of first importance is to strive for a culture change where people generally understand and look up to manufacturing industry. There is work to be done in education. Again, a culture change is needed because all too often students are mistakenly advised to aspire to the arts or teaching and feel that it is very much a second best when they have to look elsewhere. Engineers can make a wider contribution to manufacturing companies, as they do on the continent, particularly in Germany. I am glad to note that Mr. Eggar, Minister of State for Industry and Energy, has drawn together six action groups under the banner of Action for Engineers. All this is good, but I urge that government and industry work together to make faster progress.
I wish to turn to Northern Ireland, which is my particular interest, and I must declare an interest, as I have an involvement in manufacturing industry in Northern Ireland. In the past few years we have done quite well with the development of manufacturing industry. The Department of Economic Development is to be commended for its work and that of its agencies. The Industrial Development Board and the local employment development unit have made good efforts and have successfully attracted new companies to Northern Ireland. They have come, despite all our troubles, and are doing well. Generally, they find our labour force keen and adaptable and it is encouraging that some have deepened their roots and supported the manufacture of sub-components in Northern Ireland. But in Northern Ireland we really are on the rim of Europe with another sea to be crossed, both inwards and outwards. We are at a disadvantage, so to put ourselves on the level we must do better, better than you do here on the mainland and that is our challenge.
I am grateful to the Minister introducing the debate for the figures which he gave for the improvement in manufacturing in Northern Ireland. It saved me repeating them here. But perhaps there are other figures. Our unemployment is down to 11½ per cent. Relatively, that is good; but it is entirely unsatisfactory. For the European Union as a whole, unemployment in Northern Ireland ranks 158th out of 174 European regions. That is very bad news. Our long-term unemployed account for 57 per cent. of the total unemployed in Northern Ireland versus the UK average of 38 per cent. Overall, we still have an undue dependence on the public sector for employment.
I am pleased to be able to inform the House that a private sector initiative was founded by CBI Northern Ireland two years ago. It is called the Northern Ireland Growth Challenge. Under the chairmanship of the president of Short's, it has developed to comprise a 24-person steering committee and 10 active study teams. Involved are over 100 businesses, institutions, local councils, community groups and government organisations. This challenge recognises that the drive and momentum for change must come from within Northern Ireland. Radical change requires radical action. There is a determination to improve our management
In order to make it possible to achieve these targets, it will be necessary to have the wholehearted co-operation of government on a long-term basis and from the community as a whole. I earnestly hope that that can be achieved.
It might be thought that our political and other problems might counterbalance this initiative. They need not do so. The noble Viscount, Lord Brookeborough, put into perspective our headline problems of the moment in his contribution in the debate on the gracious Speech on Monday.
It is necessary for government to put the Northern Ireland economy first, year in and year out without deviation, and commit government to work in parallel with the Northern Ireland Growth Challenge or whatever may develop from it. The noble Baroness, Lady Denton, who has responsibility for Northern Ireland's economy, has done her best in that direction. There is no need to persuade her. But the task must embrace all government agencies. It is vital that this objective be the overall government commitment for the next five to 10 years. Political problems must not be allowed to divert attention from the economy.
It is not enough merely to seek new industries. We must develop our indigenous industries and endeavour to build up clusters of sub-contracting firms which can support major manufacturers and make it obvious that they should come to Northern Ireland. The Northern Ireland Growth Challenge is right on track with its objectives and it has set high targets. I hope that government in Northern Ireland will encourage its work and give it every support.
Unfortunately, we have some disadvantages, and these must be tackled and removed. Probably the most important is the increasing cost of electrical power in Northern Ireland compared with that in Great Britain. I have spoken about this matter before, but it needs repeating until the problem is faced up to. It has been calculated that this year, on average, electricity to industry in Northern Ireland is costing 13 per cent. more than in Great Britain. In the case of my own company, we pay 29 per cent. more per unit in County Antrim than we do for our plant in Newcastle-upon-Tyne. There are several much larger companies paying 30 per cent. or more to their disadvantage in Northern Ireland.
Power costs are coming down in Great Britain. In Northern Ireland they will go up at a higher rate than inflation if the present electricity structure remains in place. If present trends continue on both sides of the water, the cost of electricity in Northern Ireland in the year 2000 will be 60 per cent. or more higher than in Great Britain. The regulator will be reviewing Northern Ireland electricity costs in the light of their improving efficiency and this may reduce the disadvantage to around 40 per cent. or 45 per cent. But that prospect is quite unacceptable. For one thing it will make it even more difficult to attract industry from abroad.
The director-general of OFFER has suggested that competition could be introduced in Northern Ireland with a pool pricing system. It is suggested that such a pricing system would be good because it would introduce competition. But in reality there is very little scope for competition owing to the contracts that are in place. It is questionable whether such a system could work in a small regional unit. It would be very costly to introduce and administer. Those of us involved are now coming to believe that the introduction of a pool pricing system, although nominally competitive, could not bring reductions and might even increase costs. A new director-general of OFFER has just been appointed. It is very much to be hoped that when he has had a chance to look into the position he, too, will reject pool pricing as a sensible way forward. In addition to the prospect of vastly increasing charges, the present uncertainty about future tariff structure makes it difficult for industry to plan ahead. Without a tariff structure it is not possible to calculate possible advantages in load management or load shedding, or the development of combined heat and power. A decision about tariff structure is urgently needed.
The noble Baroness, Lady Denton, announced that the Government will make £60 million available to help Northern Ireland Electricity customers as an offset to the nuclear levy in Great Britain which is shortly to be abolished. This subvention is most welcome. Unfortunately, however, this apparently large sum is but a fraction of the real penalty that we shall suffer in Northern Ireland. We cannot blame Northern Ireland Electricity, although it sends out the bills. It has done much to reduce its costs in the past couple of years and is subject to the regulator, who will review its performance shortly. We can expect its efficiency and costs to become similar to those of regional electricity companies in Great Britain.
The real cost drivers, which lie with the independent generators, must be tackled. In Northern Ireland the consumer will pay directly for the cost of converting the Ballylumford power station to gas. Incidentally, that cost will be very high because of the fixed contracts that are in place and the cost of desulphurisation equipment in Kilroot power station. In Great Britain, all such costs are taken account of by the generators in calculating their best price. However, the really large cost driver is the price that the power procurement business, a company within Northern Ireland Electricity, has to pay for power ex generators. That is 20 per cent. or 30 per cent. higher than in Great Britain and is rising.
The reason is that long-term contracts, until the year 2010 and beyond, were negotiated with the companies purchasing the generating stations. These contracts were negotiated by officials who apparently had little or no experience of negotiating or understanding the consequences of long-term contracts. The consequences certainly cannot have been worked through. As a result, the generators can hardly find banks big enough to hold their profits. I am a member of an industrial users' action group which is perhaps only now realising what lies ahead in terms of electrical power costs. It is time
The Northern Ireland Affairs Committee today published a report on Northern Ireland Electricity. I have not had an opportunity to study it thoroughly but I am pleased to note several relevant recommendations which are not at variance with what I have said. However, they do not appear to have emphasised sufficiently the root cause of our problems which are the long-term contracts with the independent generators over which the Regulator has no control. This disaster is not characteristic of the Government and Ministers must find it embarrassing. Can the noble Viscount, Lord Cranborne, the Minister who will reply, say how soon a statement can be expected, with information on how this very serious handicap to industry and consumers generally in Northern Ireland can be removed?
Lord Wade of Chorlton: My Lords, it was my intention to use the opportunity of the Queen's Speech to tell noble Lords a little about some of the activities in north-west England. First, I should like to declare an interest in that I live there. I suppose that if the economy in that part of the world improves, a little of the benefit might brush off on to me. My grandfather always gave me very sound advice. He said, "If you want to make some money, it would be sensible to go where there is some." The more that there is in the North West, the better we all might be.
I have other interests to declare. I am chairman of NIMTECH, a non-profitmaking organisation charged with the responsibility of improving the GDP of the North West through the use of innovative technology. I am also a director of Inward, which is an organisation responsible for encouraging inward investment into north-west England; and I am a director of one or two other companies.
One of the major activities that has taken place recently is that Merseyside has been designated an Objective 1 area for EU funding. Parts of Greater Manchester, Cheshire and South Lancashire have been delegated as Objective 2 regions. The impact is that into Merseyside there will be put some £670 million of EU funds. That will represent 40 per cent. of the total investment and will be matched by 60 per cent. local investment. It will make nearly £1.3 billion. That investment will take place over a six-year period. Greater Manchester, South Lancashire and north-west Cheshire will receive a total of £272 million of EU funding, which will represent 50 per cent. of investment. Other investment will come locally.
One can imagine that the decision to make those funds available to those two regions has caused quite a lot of argument and discussion on how it should be divided and to where the money should go. Certainly those of us who have had any influence--the Government have been extremely positive about this view--feel that that money should, as much as possible, become investment in industry itself and not be spent
My organisation, NIMTECH, which, as I said, is a non-profitmaking organisation which hopes to develop innovative technology in the region, has developed a number of projects under the various schemes. Some of them will be extremely interesting. We have been able to obtain 50 per cent. funding for a project that will establish 12 centres around the world in various developing areas. It will enable north-west companies to link directly with those centres using modern methods of communication. Nationals will be working in those countries for the benefit of north-west technology companies. That will give great opportunities to companies which otherwise would not have the resources to have representation in areas such as India, Malaysia and elsewhere. Brazil particularly has already been very effective in this area.
Another project that we have set up, again under the aegis of Objectives 1 and 2, will put onto special information technology systems which will go onto the information super-highway information on 6,000 companies in the North West. That will then be available on a world-wide basis to anybody linking into the super-highway. It will also involve sending out to 2,000 consulates and technology agencies throughout the world information on those 6,000 companies. So anybody can look up immediately the company which might be interested in their products and obtain information on the background of the company, its resources and so on. That can give a big boost to many of our organisations in the North West.
We are setting up an organisation called Merseyside Host, which will bring the benefits of telematics--a combination of computers and telecommunications--so that eventually one can plug one's telephone communication into the back of one's television set and be able to link the two together. Again, that will give an opportunity to buyers around the world to draw immediately onto their computers or television sets on their desks information on a whole range of companies from the north west of England and particularly those in the Merseyside area. There is a particular project which will help to develop new ideas, particularly in the area of innovative technology. Individuals and companies who want to get their ideas into the marketplace will have assistance to do that.
As noble Lords will be aware, the north west of England has eight major universities with 150,000 students and 8,000 academics. Perhaps one can imagine the impact of 8,000 academics when one realises the enormous impact of the far smaller number in this House. We have a number of projects working with the universities now. My experience of the
Again, we have started a project--I am chairman of it--at Manchester University called Campus Ventures Ltd., through which we have made available Brunswick House at Manchester University. That was where the first computer was built. That building has now been made available for new start-up businesses. A person who has an innovative technological idea and wants to commercialise it can have facilities in Brunswick House free of charge for six months. If the idea looks as though it will develop and will be commercially acceptable, although he will still have to pay for the facilities, he will receive support from Business Ideas, and have accountancy and administrative support as well as academic support from within the university. In fact he can draw on people with similar knowledge and learn of improvements perhaps to add to their own innovative technology. There are already a number of people there who are working very well at this project and that will be another successful way forward. Those are some examples of projects that we are now putting together as a result of some of the initiatives from the EU.
I should like to refer to one or two other matters. UNIDO (the United Nations Industrial Development Organisation) has its office in Vienna. It has never had an office in the United Kingdom. It has been very supportive of many industries in other countries of Europe. Over the past few years it has stimulated new major initiatives of up to about 2,000 million dollars. We have now negotiated an arrangement whereby we shall open a UNIDO office in our offices in the North West. I am due to sign the contract in Vienna next Friday. It will mean that this opportunity will be open to many more companies throughout the United Kingdom. It is to be hoped that that will give us an opportunity to learn quickly about major world contracts, particularly in developing countries, for which our companies can bid and with which they can become involved.
A number of noble Lords mentioned unemployment and the fact that our level of growth needs to be higher than it is if we are to deal with the various pressures that each government tries to bring together. It is of concern to many people, as the noble Lord opposite said earlier, that we cannot achieve the 4 per cent. level of growth necessary and that every time we try to do so, other factors prevent us. One wonders, in fact, how much we prevent progress rather than encourage it. Wealth creation is the most important aspect that government and society can pursue. Yet many activities are held back through unnecessary controls and regulations imposed not only by governments, but often also by society.
We have just received the recommendations and planning guidance of the North West. It is much more concerned with protection and preservation than with the creation of jobs, business and investment. We received the report on Cheshire. I am familiar with that, but no doubt other counties are exactly the same. It looks at its structure plan for the next 20 years. We do not even know what will happen next year, but Cheshire is laying down its planning limitations for the next 20 years. Once again it is entirely concerned with protection and preservation and does not mention the importance of competition; how we will deal with more competition from abroad; how we will maintain our wealth creation and how we will maintain more jobs.
One of the fastest growing computer servicing companies in Greater Manchester is based in India. It services computers via satellite. Most modern technological installations are now made in such a way that they can be serviced and maintained by satellite without the intervention of human beings. When one considers the implications of that situation, the fact that many structure plans do not take note of it is completely negligent. Society--not just the Government--must come to terms with its priorities. Does it exist to protect and preserve, or to provide jobs, opportunities and wealth for the future? I believe it is the latter that should be our number one priority.
Lord Bruce of Donington: My Lords, the gracious Speech of last Wednesday was the 20th to which I have had the privilege of listening. This time, when I listened to part of it, one paragraph had a certain resonant quality; I felt that I had heard it before. I decided therefore to check on it and found that in the gracious Speech delivered on 15th May 1979 the following words appeared:
For the purposes of greater accuracy, I felt that one could make one or two comparisons between the state of affairs in 1979 and 1995. Most economists, including the noble Lord, Lord Skidelsky--I am glad to see that he is speaking today--will agree that the balance of trade is an important aspect of our economic fortunes. I find that when the Government took office in 1979 there was a trade surplus in visibles and invisibles taken together of £700 million. At the end of last month there was a deficit of £7 billion. That does not sound to me like encouraging economic progress.
All members of the population are part of the nation's economy--or should be--yet one finds that the poorer 10 per cent. of the population have become poorer in those 16 years while the richer section have become richer. I do not call that progress in ordinary terms. It may be progress for the guests at the Lord Mayor's dinner; it may be progress for those who are fortunate enough to hold large financial interests in the City or in large public utilities; but it is not progress for the United Kingdom as a whole.
The worst aspect is the unemployment situation. My noble friend Lord Barnett was a little generous to the Government on that account. Registered unemployment in 1979 when the Government took office was 1,295,700. At the latest count those unemployed and claiming benefit amounted to 2,212,336. That means that unemployment is nearly 1 million higher now than then. Looking at the economy as a whole, that does not sound to me like progress.
But that is not the end of the story. The method of counting has changed and many other changes have been made. I had the opportunity of examining the Report of the Working Party on the Measurement of Unemployment in the UK, recently published by the Royal Statistical Society. It makes rather depressing reading for anyone interested in the facts. On its calculations, reproduced in Table 1 on page 13, unemployment changes because of the changes in the basis of claiming. One must remember that "unemployment" means unemployed and claiming benefit. By reason of a periodical change to the rules, unemployment on that basis should be 1.5 million more than it is now. The noble Lord should not wince before the lash falls.
I am not taking that figure; I am taking what is possibly a more reasonable figure and less prone to speculation. I am taking the figure based on the Labour Force Survey made every three months by the Department of Employment, recently deceased for some reason or other. That puts the total figure at 1 million more than it is now. The unemployment figure should be increased by another million. Therefore, although on the official count the figure has gone up by 916,000 the actual figure has gone up by over 2 million based on the Department of Employment's own figures published in the Labour Force Survey.
That does not sound entirely promising. It cannot have been promising from the Government's point of view either because every now and then they make an aside that reveals their true state of mind. Noble Lords will recall the famous observation by the Prime Minister
By selective figures based on certain dates and times, the Government can produce figures which satisfy them, but they cannot really satisfy anybody at all. They are not competent about them. One hears from time to time how the Government's policies have been so successful and how they are the foundation of success today. I repeat: the country does not believe that. People living in the stockbroker belt and those who receive very large salaries in positions of responsibility, are the only people who can find anything to say in favour of them at all.
I believe that unemployment, and the way in which the Government have dealt with it, is one of the fundamental weaknesses in our whole situation. We have thousands of people who are willing and able to work. We have a situation in which all the materials are already available to be assembled, yet for some reason or other it is not possible to do so. That flies in the face of all logic and normal reason. I was very glad to hear today the reaffirmation by my noble friend, Lord Peston, of the principles set out by Lord Keynes before the war, which no doubt will be reinforced by the noble Lord, Lord Skidelsky--that is to say, that investment is the main factor.
The Government and my noble friends have said (and we all know perfectly well) that the education of the workforce itself is one of the vital factors in enabling full employment eventually to take place on a practical basis. One knows that. Education and further training, both technical and otherwise, is necessary. But how does one provide the jobs for which the workforce is being trained? It is all very well to train people to do things and to have wonderful schemes. My own party as well as the Government have produced some for education and for getting the unemployed into what is called "pre-work situations". That is all very well, and I applaud it. But who is going to ensure that there are jobs available following training? That is a matter of fundamental economic policy and investment.
From time to time we hear glowing tales from noble Lords opposite--and I applaud them--about foreign countries and investors who are investing in the United Kingdom. However, one thing is quite clear, and the figures bear this out: British financial firms do not do that. In fact, the sums invested abroad by British financial interests are double those which are invested by other countries in our own. Therefore, there has to be some way in which more investment takes place. There should be technological investment accompanied by the state investing in individuals by providing them with greater educational facilities. The two go together.
So far, the proposals for making investment in the country by British financial interests have rested on persuasion. It has all been tried before. Mr. Edward Heath (as he then was) tried it. We all know about it and I can turn up the speech if necessary. In 1972 he said to representatives of finance capital in the City and generally, "I have given you every tax inducement and every concession by rates and allowances, and so on, and still you will not invest". We have exactly the same problem here today, but within the context of a system of no exchange controls and of complete freedom for British financial interests to make investments wherever they like in the world. They are being made in the United States and in the states of the Pacific Rim. They are not being made here.
Let us say, for example, that my noble friend is sitting on the Government Front Bench in a few weeks' time--and I sincerely hope that he will be--as a Member of a Labour Government. Let us say that he offers inducements to financiers to invest in the United Kingdom. He offers more capital allowances, special rates of tax, if necessary, and special concessions and subsidies. What happens if they do not respond? What is one left with then? The noble Lords, Lord Peston, Lord Skidelsky and Lord Desai, know that the only way of providing necessary investment in the United Kingdom for manufacturing industry is by the state itself becoming an investor. The noble Lord, Lord Skidelsky, and I will give him chapter and verse on Keynes in the matter. That is the only way in which it can be done.
What are we doing in the meantime? We are offering verbal inducements, whether at City lunches or elsewhere, for co-operation with private capital, for the raising of finance and for all proper schemes that can be carried out either separately or jointly. In short, we are trying to persuade, but at the same time we are trying to discipline. There is always a tendency to discipline. I think that it is a pity that we should direct our disciplines towards the disadvantaged, the disentitled and the distressed rather than where they should really be directed. I sincerely hope that will be done in the passage of time.
In the meantime, the economy of the United Kingdom remains firmly in the hands of capital. Capital in the United Kingdom has more powers and has taken more powers in the past 15 years than were ever accorded to it by its own enclosures under the Inclosure Acts of previous years when capital seized the land. Until the country wakes up to that, there can be very little hope.
Meanwhile, I say this to your Lordships: there are three factors to take into account in the economy: poverty, property and democracy. As my late friend Aneurin Bevan said--his words still ring true down the ages:
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