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Address in Reply to Her Majesty's Most Gracious Speech

3.15 p.m.

Debate resumed on the Motion moved on Wednesday last by the Baroness Turner of Camden—namely, That an humble Address be presented to Her Majesty as follows:

"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."

Baroness Blackstone: My Lords, it is a privilege for me to open this important debate on the gracious Speech.

I shall outline my department's two key legislative proposals, one of which is a joint Bill with the Department of Trade and Industry. I shall also cover the content of the nuclear reform Bill coming forward from the Department of Trade and Industry, and the priorities for economic policy, which my noble friend Lord McIntosh of Haringey will discuss at greater length when he replies to the debate.

I should also like to take this opportunity to reflect on what this Government are doing to improve the quality of life for all through cultural and sporting activities, to support the pursuit of excellence and to champion the tourism, creative and leisure industries.

Both the Communications Bill and the Licensing Bill in the gracious Speech demonstrate the Government's commitment to better regulation and to reducing regulatory burdens for industry where possible.

After a long gestation period—it has been just under two years since we issued the White Paper—the Government have today published the Communications Bill. This Bill will help to achieve our

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objective of creating the most dynamic and competitive communications industry in the world. It will ensure universal access to a choice of diverse services of the highest quality, while also safeguarding the interests of consumers and citizens.

The communications industries play a central role in our economy and in our lives as citizens, consumers, viewers and listeners. The Bill will put in place a framework to respond to the great challenges as well as to the tremendous opportunities in the communications markets.

The Bill will give powers to a single regulator, Ofcom, which will be responsible for the whole of the communications market. It will reform the rules on media ownership: deregulating significantly to promote competition and investment, but retaining a core set of rules that ensure the existence of a range of media voices, safeguarding the vibrancy of democratic debate.

We will not let broadcasting standards or quality slip, but we will not allow excessive regulation to stifle innovation and creativity. The Bill will give public service broadcasters greater freedom to regulate themselves in certain areas. It provides for the demands of the digital age; and it will, through the content board, ensure that the public have a formal voice in the debate about the nature and quality of television and radio programmes.

The Bill will give Ofcom concurrent powers with the Office of Fair Trading to enforce general competition law in the communications sector; and it will enable spectrum trading—ensuring that we make the most efficient use of this valuable resource. Importantly, it also implements the EC directives on electronic networks and services.

The Communications Bill responds to the communications environment today—and will respond to the communications environment of tomorrow.

That brings me to the second of my department's legislative proposals. I am sure that noble Lords will agree that our current licensing laws are outdated and complex. The Licensing Bill announced in the gracious Speech will reform and modernise the licensing regime.

Our proposals will deliver more choice for the consumer and reduced cost and bureaucracy for the leisure, hospitality and tourism industries while securing the necessary safeguards to protect the interests of the wider community.

The Bill will introduce a single integrated scheme for licensing premises which sell alcohol or provide public entertainment or refreshment late at night. It will cut red tape, streamline procedures and deliver substantial savings of nearly 2 billion in the first 10 years. Businesses will be able to apply for a single premises licence to cover all their activities that require licensing. Police, fire authorities and other responsible bodies will be consulted on each application. Local residents and businesses will have the chance to have a say in any new application and to request that existing licences be reviewed. Only in cases where

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representations are made will hearings be required, stripping away the overheads of compulsory court hearings.

Although the Bill is deregulatory, it is also responsible. The potential for up to 24-hour opening seven days a week will not only increase consumer choice but help minimise public disorder resulting from artificially fixed closing times and encourage a more civilised culture in pubs, bars and restaurants. While recognising that introducing young people to alcohol in a safe and measured way will help deter them from drinking to excess later in life, the Bill also includes tough measures to protect children.

In addition to the two Bills proposed in the gracious Speech, my department is working to reduce burdens and cut red tape in other important areas. The Regulatory Reform (Special Occasions Licensing) Order 2002 will extend licensing hours for all future New Year's Eves and do away with the need for licensees to apply separately to extend their hours. The order has been reported on positively at the first stage by the regulatory reform Select Committees of both Houses. The Government will do all they can to ensure that the order is in place for this New Year's Eve.

Earlier this year, we published plans for thorough reform of the law on gambling. Our proposals are intended to sweep away unnecessary regulations, which date from an era in which gambling was viewed as socially undesirable. However, we are determined to ensure that there are effective controls to keep gambling crime-free, to ensure fairness to participants and to protect children and the vulnerable. We want to bring about a new and better balance of regulation. We will, therefore, over the coming months, continue to develop these proposals in consultation with interested bodies with a view to introducing a major gambling Bill when parliamentary time allows, in a future parliamentary Session.

My department is also continuing its commitment to champion the tourism industry. We have put in place an ambitious plan with three main elements: a relaunched national tourist organisation that combines the expertise of tourism bodies in this country and cuts down on core costs; the embedding of tourism deeply into regional economic development strategies through the regional development agencies; and pledging an additional 10 million in challenge funds for the promotion of England to the domestic market. We aim to develop a competitive and sustainable tourism industry, which will in turn encourage people from Britain and abroad to take their holidays here.

More widely, we will also be taking forward our plans to give people of all ages and backgrounds increased cultural and sporting opportunities. The arts have the potential to enrich all our lives. The Government recognise this and are committed to creating better pathways for individuals to develop and enjoy their artistic and creative potential throughout their lives, from the starting point of education through to professional excellence. In 2003–04, my department's funding for the arts will rise

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to 297 million—100 million more than in 1997–98. By 2005–06, this will have risen to 412 million—73 per cent higher in real terms than in 1997–98. The restructuring of the Arts Council will mean that more of this money will go directly to the arts. The establishment of a new single development and funding body for England will realise significant savings in administration that will be ploughed back into the arts. Creative Partnerships demonstrates what we are trying to achieve in the arts. This will be the first full year of the scheme. Pupils and teachers in more than 360 schools in some of the most disadvantaged areas of the country will get the opportunity to work on creative projects with artists, museum and gallery curators, architects, film-makers and fashion designers. Our highly successful policy of free access has meant the number of children attending our sponsored museums and galleries increased by one-third—from 5 million in 1999 to around 7 million by March 2003—a year ahead of target. We will continue to allow people of all ages free access.

The Government have also begun the process of ensuring that every young person has the opportunity to participate in sport. They are developing a clear and structured pathway to enable young people to receive the help and support they need in order to reach their true potential. The Prime Minister's announcement last month of a 459 million investment over the next three years in PE and school sports demonstrates our commitment in this area. This investment will provide opportunities for all children, irrespective of their circumstances or background, to benefit from improved teaching and coaching in schools and stronger links between schools and community sports clubs. We aim to deliver a national infrastructure for school sports by establishing 400 specialist sports colleges by 2005 and by creating 400 school sports co-ordinator partnerships by 2007. The Government have also committed 28 million from the recent spending review into developing coaching. We aim to provide a career structure, accredited qualifications and a career development structure for coaches.

I cannot cover everything that my department will be doing but I hope I have given a flavour of our key priorities.

The Department of Trade and Industry proposes the nuclear reform Bill. Cleaning up the nuclear legacy represents a huge managerial, technical and environmental challenge that we cannot ignore and in which, as citizens, we all have a direct interest. The White Paper Managing the Nuclear Legacy - A strategy for action published in July made clear that the Government's priority is to ensure that clean-up is carried out safely, securely and cost-effectively. It also made clear that this must be done in ways that protect the environment for the benefit of current and future generations. It underlined our commitment to driving work forward in the context of management arrangements that are open, transparent and command public confidence. The response to the White Paper has been very positive and generally endorsed the proposed approach. In line with the

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commitment to openness and transparency, we intend to publish draft implementing legislation in the spring so that stakeholders generally have the opportunity to comment. Following consultation, legislation will be put before the House at the first available opportunity.

Finally, I shall discuss the Government's key priorities in building a strong and dynamic economy. The basis of all that we have achieved, and all that we will achieve, is a stable macro-economic environment.

This Government have worked hard to achieve a reputation for competence in the management of the economy. We made tough decisions in our first term, but they worked. So, today inflation is low and stable, long-term interest rates are around their lowest levels since the 1960s, public finances are sound, the unemployment claimant count continues to be below 1 million, for the first time since 1975, and employment is at record rates. Nearly all commentators expect continued growth with low inflation in the UK economy. The IMF has said that our,

    "track record of sound policy design and implementation in recent years bodes well for continued success in a more uncertain world economy."

This Government will take no risks with economic policy. We will never take stability for granted. We will maintain our discipline in managing the public finances and will consistently meet our tough fiscal rules. It is because of our prudent handling of the economy that we have been able to provide the substantial extra resources for key public services set out in the 2002 spending review.

The Government are committed to ensuring that existing spending and these new resources are targeted to deliver value for money and achieve the improvements that the public both want and expect. Resources must be matched with reform to deliver results, in which the modernisation of public service delivery is crucial.

Macro-economic stability means certainty for individuals and for businesses—the right environment to plan and invest. That certainty is important. That is why this Government have set out clearly our policy on the euro; a policy that we have followed consistently since 1997. The Government's policy on UK membership of EMU remains unchanged. It remains as set out by the Chancellor of the Exchequer in October 1997, and repeated by the Prime Minister in February 1999.

In principle the Government are in favour of UK membership of EMU; in practice the economic conditions must be right. The determining factor underpinning any government decision on membership of the single currency is the national economic interest, and whether the economic case for joining is clear and unambiguous. The five economic tests will define whether a clear and unambiguous case can be made. The Government are committed to completing an assessment of the five economic tests by June 2003.

Support for business, enterprise for all within a dynamic modern economy, is an important theme running through this Government's policy. Onto a

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platform of macro-economic stability we have introduced a series of targeted micro-economic reforms aimed at improving productivity and creating a culture of enterprise. That means a low tax environment for business, and targeted reforms aiming to address the five key drivers of performance: enterprise; investment; innovation; competition; and skills.

The tax cuts for small business in the Budget of 2002, the research and development tax credit, the investment in skills in the spending review, are an expression of our commitment to an innovative, enterprising, entrepreneurial society, where everyone has the chance to reach his full potential.

In conclusion, the Government are committed to building a modern, dynamic and competitive society but also to safeguarding the interests of consumers and citizens. The programme that I have outlined today supports that aim.

3.32 p.m.

Lord Saatchi: My Lords, perhaps I may begin by thanking the noble Baroness for so clearly setting out the Government's view of the areas that we shall debate today. I have no idea whether the juxtaposition of economics and culture will be a success, but it does not really matter. When one looks at the distinguished speakers on the list, it is clear that we shall have an excellent debate to which I am very much looking forward.

If noble Lords will allow me, I shall concentrate on the wider economic issues raised by the gracious Speech. When my noble friend Lady Buscombe sums up the whole debate for these Benches, she will go further into the aspects directly affecting the noble Baroness's department.

It is always a privilege to be in your Lordships' House to hear the gracious Speech. This year, it was also an education. It helps to explain why, after six Budgets, three spending reviews, six gracious Speeches, and thousands of pages of worthy aims and objectives, this radiantly intelligent and well-meaning group of individuals—I refer to the Front Bench opposite and their government colleagues—all blazing with high hopes, could have fallen to the point where, when asked to pick the one word that best describes their attitude to the Government, people now choose, "disillusionment". Why? One Downing Street official answered:

    "We're running a Soviet-style centralised system and that's never going to work".

Doctors confirm that the physical failures of our bodies today can often be explained by genetic defects inherited from a previous generation. So perhaps I may take noble Lords back to 1st October 1928, a seminal moment in the history of the Benches opposite, and a red letter day in the history of the Union of Soviet Socialist Republics. It was the day on which the first Soviet five-year plan was launched.

The hopes of the Communists were high. At street corners, in factories and in villages, they would harangue the crowds and tell them of the plan and how

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its fulfilment would bring them health and happiness. Experts and scientists hurried from all parts of the Soviet Union. Conferences were held to draw up a tremendous plan for the development of the state for the next five years, under the auspices of the state planning commission.

In its initial form, the plan prescribed 50 targets for industry and agriculture; for example, it was laid down that the average number of eggs eaten per head of the population between 1st October 1932 and 30th September 1933 was to be 155. The allowance of boots was to increase from 0.4 of a pair in 1927–28 to 0.7 of a pair in 1932–33. They succeeded in the plan. In agriculture the percentage of crop area owned by the state rose from 33 per cent in 1930 to 94 per cent in 1935. And what happened? By 1932, grain production fell by nearly 250 million hundredweights; sugar beet fell by half; the number of horses fell by 55 per cent; horned cattle fell by 40 per cent; the number of pigs fell by 55 per cent; and sheep by 66 per cent.

The human and economic consequences were appalling. Millions perished in the ensuing famine. The death toll for the period 1931–33 was around seven million. There was no relief for the starving. In fact, the existence of the famine was officially denied. Viktor Kravchenko, then an officer in the GPU, recalls the position:

    "We've eaten everything we could lay our hands on—cats, dogs, field mice, birds. When it's light tomorrow you will see the trees have been stripped of their bark, for that too has been eaten".

We are not eating mice, yet, in Britain today but no one can doubt that, as the Downing Street official said, we are moving towards a command economy in which the life cycle of firms and institutions and the co-ordination between them are governed by administrative means—directives and regulations—rather than by the individuality of a market mechanism.

Apparently, economists say that the most distinctive feature of such an economy is the setting of targets by higher command, often in fine detail. Today, every document that emanates from the new glittering palace of the Treasury is strewn with initiatives, imperatives, and targets. The 2002 comprehensive spending review contains 130 different performance targets. Each sets a new standard in length and verbosity. The jargon is impenetrable in places. New names have been assigned to almost every existing process and institution. Of course, to monitor these targets, new bodies, units and task forces are necessary.

So the NHS now has the well-meaning assistance of the National Institute for Clinical Excellence, the Modernisation Agency, national service frameworks and the Commission for Health Improvement. In the asylum system there will be a new police standards unit, new health, social care and housing inspectorates, and a reformed inspection regime for the criminal justice system.

Throughout the public services the Chancellor of the Exchequer says that he will have new reviews and reports, targets, procedures and checks, as well as

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inspectors and audits. So the Department for Education and Skills now has 18 targets, the Home Office has 20, and the NHS Plan contains 400. But in this climate of administrative controls difficulties with supply, frequent revision of plans, interference by party and other authorities, problems of motivation, accountability, inappropriate decision making, and divergent interests all complicate the procedure and stand in the way of efficient and effective operation. This is the model of inefficiency that is being rolled out across the public services. Results? According to the Government, 75 per cent of the performance targets that they set themselves in the year 2000 have been missed.

We should ask: what happens to those who miss their targets? For a lucky few, that can be good news because, in that immortal Downing Street phrase, it provides:

    "Increased room for catch up".

Others receive a much more brutal sanction for failure. Let us take, for example, the fate of MAFF, the Ministry of Agriculture, Fisheries and Food. Its punishment? To be renamed DEFRA—the Department for Environment, Food and Rural Affairs—and given new targets. In other cases, the penalty for a department that misses its target is even simpler: a lower target.

Noble Lords may say that only a sad person would keep track of all this, but here I am. In 1998, for example, the Department for Education—which last year issued 4,440 pages of rules to schools—had as a target,

    "to reduce the number of half-days lost to truancy by 44 per cent by 2002".

Here we are in 2002, but the target has been missed. What is the new target? It is,

    "a 10 per cent reduction in truancy to be achieved by ... 2004".

In 1998, the Home Office had as a target,

    "to double the number of removals of failed asylum seekers by 2002".

The department missed that, so its new target is,

    "to enforce the immigration laws more effectively".

In its recent report, the Audit Commission asked former public service professionals why they had left. Easily topping the list was,

    "too much bureaucracy and paperwork",

cited by almost 80 per cent of those interviewed. It is immediately obvious to any of us speaking to anyone working in the health service, schools, universities or the police what a demoralising and all-pervasive problem bureaucracy and paperwork have become.

On his first day in office, the new chairman of the Audit Commission found that people in the public services were,

    "being swamped by performance indicators and audits and inspections. Too much micro-meddling",

he said, was,

    "counter-productive ... demoralising and demotivating for staff".

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The first Russian masterplanners would have immediately stamped out such insolence. Unfortunately for the Government, however, there are too many inside critics for that solution to be practicable. For example, people such as Professor Jonathan Waxman, cancer specialist at Hammersmith hospital have bravely stood up for the Audit Commission's findings. He said:

    "Money is wasted in the proliferation of bureaucracy. The new money for cancer is going into process".

Two weeks ago, Ian Bogle, of the British Medical Association, told the Public Administration Committee in another place what the 400 targets and 9,000 senior managers—in 87 different grades—are doing to the NHS. He said that managers are,

    "having to reach targets at all costs",


    "are taking measures that are not acceptable. There is the diverting of ambulances to lower priority cases, the hidden waiting lists, not putting patients on waiting lists, re-designation of trolleys as beds on wheels".

Speaking of how the figures are compiled, I should like to make a specific request of the government Front-Benchers. Next week, the Chancellor will publish his Pre-Budget Report, with which the noble Lord, Lord McIntosh, will deal in this House. As the noble Lord is well aware, there are many questions about how the figures for government debt are compiled in relation to the PFI and PPP. Next Wednesday, when the Pre-Budget Report is published, will he and the Chancellor also publish a clear and simple analysis of the current financial status of the PFI and PPP? As I am sure the noble Lord is aware, it is impossible to arrive at the current position from published sources. I hope that he will reflect the mood of the times—for openness, full disclosure and transparency—when it comes to the public accounts. I hope that we can look forward to such a statement next week.

Again on the subject of figures, would Front-Benchers opposite be kind enough to consider this textbook definition—from a textbook on economics—of a Soviet command economy? Will they ask themselves whether it sounds at all familiar? Let us also recall that this Government have issued a press release every four minutes since they came to office. The description is as follows:

    "Informed public discussion in a country implementing this model is impossible because reliable statistics are not published, extensive use is made of misleading statistics and there is a comprehensive pre-publication censorship. Public discussion is dominated by 'the propaganda of success', that is, the suppression of 'negative' facts and publication only of 'positive' facts and also of purely imaginary achievements".

That sounds slightly familiar, does it not?

The record seems to show that the Government, well-intentioned though they may be, are unable—hampered by their Soviet command approach—to bring about the improvements that people want to see. A poll conducted by MORI reveals the depth of disquiet after the previous six gracious Speeches. Some 37 per cent of people now think that most or nearly everyone will end up paying for private schools; 56 per

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cent believe the same about private healthcare; 59 per cent about private welfare insurance; and 66 per cent about private pensions. In a Consumers' Association survey, 40 per cent of the public said that, in the face of NHS delays, they were willing to pay for private treatment, even if they had no health insurance and had to pay for treatment out of their own pocket.

People know that the Government's Soviet command approach is bound to fail, as it did for the poor Russians. The story of Hamlet shows what happens when a well-intentioned but misguided man is let loose on the world. That story tells of,

    "a great task placed upon a soul unequal to the performance of it".

What is the result? As Goethe put it:

    "Like an oak tree planted in a costly vase ... the roots spread out, the vase is shivered into pieces".

3.45 p.m.

Lord McNally: Well, my Lords—

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