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House of Lords

Thursday, 25 November 2004.

The House met at eleven of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Oxford): The CHAIRMAN OF COMMITTEES on the Woolsack.

Disability Discrimination Bill [HL]

Lord Grocott: My Lords, on behalf of my noble friend Lady Hollis, I beg to introduce a Bill to amend the Disability Discrimination Act 1995; and for connected purposes. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(Lord Grocott.)

On Question, Bill read a first time, and ordered to be printed.

Inquiries Bill [HL]

Lord Evans of Temple Guiting: My Lords, on behalf of my noble and learned friend Lord Falconer of Thoroton, I beg to introduce a Bill to make provision about the holding of inquiries. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(Lord Evans of Temple Guiting.)

On Question, Bill read a first time, and ordered to be printed.

Borough Freedom (Family Succession) Bill [HL]

Lord Graham of Edmonton: My Lords, I beg to introduce a Bill to make new provision relating to admission to borough freedom. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(Lord Graham of Edmonton.)

On Question, Bill read a first time, and ordered to be printed.

Renewable Energy Bill [HL]

Lord Redesdale: My Lords, I beg to introduce a Bill to make provision about the microgeneration of electricity; to provide for small renewable energy developments to be classed as permitted development; and to provide for a renewables obligation for public suppliers of energy other than electricity suppliers. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(Lord Redesdale.)
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On Question, Bill read a first time, and ordered to be printed.

Address in Reply to Her Majesty's Most Gracious Speech

Debate resumed on the Motion moved on Tuesday by the Baroness Lockwood—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".

Lord Davies of Oldham: My Lords, Britain has never worked so productively, created so much wealth and generated so many jobs. For the first time in half a century, Britain has been growing faster and for longer than any other G7 country. We have overtaken France to become the fourth-largest economy in the world. The Government have delivered 49 consecutive quarters of growth, the longest period of continuous economic growth on record. The UK was the only G7 economy to avoid any quarters of negative growth between 2001 and 2003. The UK continues to enjoy the lowest sustained inflation for 40 years. Unemployment is at its lowest in a generation and, at 4.7 per cent, is the lowest in the G7.

As the world economy has strengthened, UK growth has become more balanced. Business investment, exports and manufacturing output have all risen in the past year. The Budget forecast is for GDP growth of 3 per cent to 3.5 per cent this year, and independent forecasters agree. It is not only the Government's word at stake; analysis by the European Central Bank shows that the UK had the best performance of all member states in forecasting GDP growth between 1999 and 2003.

Under this Government, employment has increased by more than 1.9 million. Interest rates, at 4.75 per cent, are still low by historical standards. Mortgage rates are close to their lowest levels since the 1950s, saving mortgage payers an average of around £2,600 a year. Households are benefiting from robust growth and employment. Real disposable income grew by 3.3 per cent during the year to the second quarter of 2004 and by 3 per cent a year on average since the second quarter of 1997. Households' net wealth is up almost 70 per cent since 1997.

I anticipate that some contributors to the debate will express worries about household debt and government debt levels. The background is one of confidence in the economy, in terms both of other nations' perspectives and of households. The simple fact is that the indebtedness of our people is balanced by their confidence in being able to manage household debts against full employment provisions and the opportunities to earn.
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We often speak about Treasury issues as the context for government policies in the debate on the Queen's Speech, but there are Treasury Bills too. The first is the child benefit Bill—the first such Bill since 1975. It is very much focused on the key theme of the Government, which is extending opportunity. It is a sign of our commitment to ensuring that all young people reach the age of 19 ready for higher education or skilled employment.

It is well known that the child maintenance support system and educational maintenance allowances have helped young people to continue in full-time education. They have helped to prepare them to go on to higher education, if they so choose, and have widened such opportunities. Of course, the gap has been the very limited support for those who seek training and skills—skills that we all recognise as one of the crucial gaps in our economy that need to be strengthened.

It is a continuing theme of the Government that skill enhancement should be developed across the range of economic life. In particular, we need to give the same support to those who have dropped out of the formal, full-time education system as to those who remain in it. That is what the Bill does. As young people develop skills in relation to work, it will ensure that trainees without pay will get support, and that those who need to leave work for a short time to complete their training and submit to assessment will have financial support.

The Commissioners for Revenue and Customs Bill seeks to extend opportunity to all, while maintaining fiscal discipline. We also have to look at the issue of administrative savings and the ways of reducing burdens on business. The Bill delivers in both those areas. It integrates the Inland Revenue and Her Majesty's Customs and Excise to form a single new department—Her Majesty's Revenue and Customs—implementing the key recommendations from the O'Donnell review of revenue administration.

A single department will deliver improvements for customers through more joined-up services. It will improve fairness, making better use of information to help to target compliance activities. It will reduce the compliance burden on honest taxpayers, and make life more difficult for those who seek to avoid their obligations. It will deliver efficiency improvements, with integration contributing 3,000 posts towards total savings in the department of 16,000 posts by 2007–08. Integration requires a comprehensive programme of work and consultation. Maintaining business as usual in the mean time is paramount to avoid impacting on services to customers or on flows of revenue to the Exchequer. The Bill also creates a new prosecutions office to prosecute cases in England and Wales, implementing a key recommendation of the Butterfield review.

The Treasury background is supplemented by the crucial work of the Department of Trade and Industry. We are enjoying sustained economic growth, as I have emphasised. However, with the challenges emerging
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from China and India, whose growth rates are three times higher than any in Europe, and whose potential customer markets are five times bigger with wages close to one-tenth of ours, we cannot ignore the growing elements of international competition. We all recognise that there is a fiercely competitive global environment and the challenge for all nations is how to create knowledge, tap it and then transform it into wealth and jobs.

Last week the Secretary of State for Trade and Industry launched the DTI five-year programme, "Creating Wealth from Knowledge". It recognises that a nation's wealth and prospects are determined by how well it creates, manages and uses knowledge. Crucially, it places science innovation at the heart of government strategy to secure our future prosperity. By 2007, DTI spending on scientific research and infrastructure will have more than doubled since 1997 to £3.3 billion.

We have other successes in which we take pride. New businesses are starting up at the rate of 500 a day. Britain attracts more inward investment than any other European country and our scientists are the most successful in the world. Knowledge-based business services have accounted for over half our job growth in the past two decades. We lead Europe in our share of value-added coming from knowledge-based and high-tech businesses. Put simply, the world increasingly wants to buy what we are good at producing. But there is no room for complacency in this increasingly competitive environment.

So Britain is working and we should all be proud of it. But we cannot stand still. We need to do even better in future. To promote science, technology and innovation, the DTI will invest £370 million in emerging technologies, establish a multi-million-pound fund for high profile "Newton awards" to reward achievements in solving major public policy challenges through critical breakthroughs in science and technology, and the DTI will directly intervene to protect those being targeted by animal rights extremists.

As well as supporting British scientists and their work, we need to attract the very best scientific brains to Britain from around the world. So we will target the Highly Skilled Migrant Programme in order to attract more global entrepreneurial talent and academic expertise to the UK. We will establish a comprehensive policy towards the recognition of foreign credentials. We will also work with the Home Office to develop policies to attract and retain foreign students who successfully complete a PhD in a "shortage" subject at an accredited UK university. All this builds on a record of delivery for business.

The DTI will sponsor two Bills. The draft company law reform Bill continues in this vein of reducing burdens, particularly for smaller firms. Company law is central to the effective operation of our economy and it is vital that our system remains as flexible, modern and accessible as possible. We are therefore committed to taking forward the important reforms suggested by the major independent Company Law
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Review, which provided an authoritative assessment of the sorts of changes that need to be made to bring our law into line with the needs of modern business.

The draft Bill, which we will be publishing for public consultation, will follow that route map. It will make the law simpler and more accessible, produce better regulation and introduce a "think small first" approach to the law, give greater clarity to directors on their responsibilities and help to promote shareholder engagement and a longer-term investment culture.

We will also introduce the consumer credit Bill to enhance consumer rights and to provide for redress, improve the regulation of consumer credit businesses and make regulation more appropriate for different types of consumer credit transaction. That Bill will be the concluding package of legislation that draws together the Government's review of the Consumer Credit Act 1974. It is designed to equip the credit sector to continue to develop in the modern marketplace.

A successful economy and thriving business environment in part rely on an effective, reliable and safe transport system. Our economy is growing and is set to grow further. A strong economy means that people will choose to travel more and choose to travel greater distances. All of that will put greater pressure on the road and rail networks and on air travel. Decades of under-investment in transport have resulted in ageing and over-stressed networks, which are now coping with levels of travel that were never anticipated when they were designed.

We are now sorting that neglect to make journeys, whether by road or rail, safer and more reliable. We have already made considerable progress. Over 100 road schemes have been completed. The M25 is being widened. Bus use is increasing year on year. The number of light rail passengers has increased by 95 per cent since 1997. More people are using trains than at any time since the 1960s. Rail freight is up 24 per cent since 1997. Our first high speed rail line opened on time and budget. Highways Agency traffic officers are patrolling motorways to clear incidents as quickly and safely as possible to get traffic moving. The Nottingham Express Transit opened in March. We are guaranteeing half fares on local buses for older and disabled people.

The transport White Paper published in July this year set out how government will provide sustained investment and plan for and manage transport in this country in a way that is consistent with our environmental objectives. The White Paper also outlined expenditure plans to 2015. Spending by the Department for Transport will rise by an annual average of 4.5 per cent in real terms between 2005–06 and 2007–08. This higher level of spending will then grow in real terms by 2.25 per cent each year through to 2015. That sustained investment is allowing us to spend some £73 million each week on railways, matched by a similar amount from the private sector.

The first of the transport Bills that we are introducing is the railways Bill, which will implement the policy changes that need legislation. The Government will take
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charge of the strategic direction of the railways, have clear agreements with each part of the industry, set levels of public expenditure and the SRA will be abolished. The Office of the Rail Regulator will be responsible for safety, performance and cost. Devolved administrations in Scotland and Wales and the passenger transport executives in England will be given more responsibility.

We will also make other changes alongside the legislation. Network Rail will be given clear responsibility for operating the network and its performance. Track and train companies will work more closely together. In time, the number of franchises will be reduced. Freight operators will be given greater certainty about their rights on the national network, to help to promote the efficiency and growth of rail freight.

We will also introduce a hybrid Bill regarding Crossrail to give the powers needed for the construction maintenance and operation of that scheme.

The road safety Bill will help to build on existing measures to make road—

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