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Lord Forsyth of Drumlean: My Lords, I am grateful to the Minister for giving way. I noted in the gracious Speech the commitment to introduce a Bill to allow for the construction of Crossrail. But will the Government be footing the bill for that project? What resources will the Government make available for that project to be completed?

Lord Davies of Oldham: My Lords, the House will recognise that this is a very substantial investment programme in which not only the Government intend to ensure that they provide their share; investment from private interests, which will benefit hugely from the development of Crossrail, is an important part of the development. There has been enormous pressure from whole areas of private business with regard to the construction of this feature. So the answer to the noble Lord is straightforward. We could not expect this project to be financed solely with government funding. As we anticipate that it will take a decade for the project to be fulfilled, the noble Lord will also recognise that at this stage it is a little early for us to go into minute detail about finance.

Lord Forsyth of Drumlean: My Lords, I apologise for pressing the Minister but this is a very important project for the whole of the capital and for the whole infrastructure of our country. Surely it is not unreasonable to ask the Minister what proportion of the finance or what level of commitment we can expect to come from the taxpayer.

Lord Davies of Oldham: My Lords, all in good time. The hybrid Bill will set up the framework for construction and will guarantee that the necessary resources are available to begin the project. But the noble Lord will recognise the intricacy of the negotiations and the importance of a match of private and public funds. I am not sure why he is being critical in this respect. Surely he must see that our advantage
 
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as regards the railway system as a whole is our ability to bring in both substantial government investment and private investment.

I want to refer briefly to the subject of road safety. The Government are introducing a Bill to improve driving standards, to increase penalties in crucial areas—not least in respect of driving while using a mobile phone, in which I declare a past interest—and to ensure that the police have access to insurance data in order that they can detect uninsured drivers at the touch of a button.

My noble friend Lord McIntosh will reply to the debate and to all those who introduce the fourth dimension of this debate, which relates to the Department for Culture, Media and Sport. The department is sponsoring two Bills. The National Lottery Bill is an important element of our reforms to the lottery to make it responsive to people's priorities and to widen the opportunities which it offers.

The Gambling Bill, too, is about reform to deliver better outcomes. We need to address the changes resulting from new technology; we need to ensure that where adults want to gamble, they can do so with the knowledge that they are being properly protected; and we need to ensure that that protection extends to children and the vulnerable. We shall have a constructive and wide-ranging debate on its contents. That debate has already begun in the other place. We look forward to the debate developing with the usual rigour in your Lordships' House.

Our proposals will enhance economic stability, promote prosperity and jobs, enhance mobility and create a fairer, more secure and more just society. They offer opportunity for all, and I commend them to the House.

Baroness Noakes: My Lords, I thank the noble Lord, Lord Davies of Oldham, for setting out the Government's view of the topics before us today. As usual, he paints an elegant picture. But I am sure that the noble Lord will not be surprised to find that we on these Benches find it a little like modern art—we have great difficulty in recognising what he has painted.

We are honoured that five noble Lords have chosen to make their maiden speeches today. I look forward to them all but especially to those of my noble friend Lord Steinberg and of the right reverend Prelate the Bishop of Durham.

We have a curious mixture of topics today. For these Benches, I shall be covering economic affairs, including trade and industry matters, and my noble friend Lady Buscombe will be closing for these Benches and will cover cultural affairs. Sandwiched between those is the topic of transport. For the sake of completeness in covering today's topics, perhaps I may say that we believe that the Government's transport policies have been little short of inept. I notice that the noble Lord, Lord Davies of Oldham, did not even mention the Government's 10-year transport plan, whose targets we are on track comprehensively to fail.
 
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Three transport Bills were announced in the gracious Speech. First, there is a Bill to streamline the organisation of the national rail system. We support a reduction in railway bureaucracy but not if the result is to give civil servants and politicians more control over the railways. Secondly, there is a road safety Bill, and we shall want to see that this is not another opportunity for the Government to pursue their anti-motorist agenda. Lastly, there is a Bill to enable the development of Crossrail, which we support but not at any price. My noble friend Lord Forsyth has already pressed the Minister on the issue of financing. We do not believe that this is a minute detail; we think that the black hole of £4 billion or more at the heart of the financing of Crossrail is a crucual issue which must be addressed and addressed soon.

We look forward to scrutinising Bills announced in the gracious Speech which deal with consumer credit, child benefit, the creation of a single equality body and the merger of the Inland Revenue and Customs and Excise. We fully expect those Bills to be worthy in intent but also full of undesirable features. And, as we have come to expect a combination of inadequate scrutiny and poor drafting in another place, the work of this House as a revising Chamber will continue to be essential.

We regret the fact that the gracious Speech did not contain any proposals for the creation of a properly independent national statistics service. The Minister will not have missed the comments earlier this week by Rachel Lomax, one of the Deputy Governors of the Bank of England, when she said:

"The statistical fog surrounding the true state of the economy has proved a particularly potent breeding ground for policy errors in the past".

I hope that the Minister will say something this afternoon about the Government's plans to protect and enhance the integrity of our national statistics.

Lord Eatwell: My Lords, I apologise for interrupting the noble Baroness and I am grateful to her for giving way. Does she accept that when Rachel Lomax made those comments she was referring to the difficulties involved in collecting statistics accurately in any environment and that it had nothing whatever to do with the proposal of the noble Baroness concerning an independent statistical service?

Baroness Noakes: My Lords, I do not accept that it had nothing whatever to do with the creation of a national statistics service because I believe that there have been problems with the quality of data produced by the Office for National Statistics for some time. That is why the proposal, which has not come from these Benches alone, for the creation of an independent body is very pertinent to the concerns expressed by Mrs Lomax.

In 1997, the Labour Government planned to create a reputation for sound economic management. The leading architect of this grand plan was the Chancellor, who invented a golden rule to exemplify his sound management of the economy. Because the Chancellor inherited a strong economy, that was a relatively easy
 
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task at the outset. But we are now heading towards the time when we shall discover whether the Chancellor's golden rule has any clothes.

We debated the golden rule just a few weeks ago in connection with the Maastricht Motion on the last Budget. Both we and those on the Liberal Democrat Benches doubted whether the golden rule would hold. Since then, commentators have become increasingly united on the view that there is a black hole at the heart of the golden rule and that, if this Government are re-elected, there will be third-term tax rises. We are not talking about the views of journalists; we are talking about practically every national and international body. They all think that a third Labour term would involve tax rises.

The latest evidence shows that in October, for the first time in 10 years, the Government had to borrow. That, and other evidence, points to an overshoot of between £6 billion and £10 billion this year. We can compare that with the headroom in the golden rule, which had a margin of only £11 billion to cover both this year and the next.

The picture on growth is looking less rosy. The US trade deficit is overhanging the global economy and the Bank of England's latest view is that next year growth will dip below the long-term trend.

I have just one question to the Minister in relation to the golden rule as I do not expect him to depart from the Treasury orthodoxy that it will be met. My question concerns measurement. Will the Minister simply confirm that the Government have no intention of changing either the timeframe for measurement or the mechanics of measurement? I know that the Minister will want to agree with me that this is not the time for creative accountancy.

I do not want to rest my case on the Government's economic management on whether they have complied with their own rule on borrowing over the economic cycle. There is a much longer list of failings that will need to be remedied. Our rate of productivity growth is now the slowest for two and a half years, is the slowest among the English-speaking world and is even below the EU average. That has contributed to a slump in our position in the international league tables on competitiveness.

Our businesses are regulated to distraction. The truth is that the Government have issued 15 new regulations for every working day since 1997. All of that bears disproportionately on small and medium-sized businesses, particularly small businesses, which are estimated to spend as much as 4 per cent of their sales on compliance with government regulations.

The Government are all talk on deregulation. We had more of that last week when the DTI announced a new five-year plan to relieve business of regulatory burdens. I do not think that anyone will get excited about the remote prospect of £1 billion coming off a bill of £30 billion imposed since this Government came to power. It is simply too little and too late.

But the story on productivity is not just a private sector one. A recent report for the European Central Bank showed that if our public sector performed at the level of the best, we would need to spend only 84 per
 
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cent of what we actually spend. That came as no surprise to those of us who have seen the Government try to wriggle out of the analysis that, however accommodating the Office for National Statistics has been, in recent years the public sector has been going backwards in efficiency terms.

The Chancellor admitted this year that his spending performance has been accompanied by inefficiency to the tune of over £20 billion each year, as identified by Sir Peter Gershon. We see the scope for even more savings but the question is whether this Government can deliver. With Civil Service numbers up 14 per cent in five years and no track record of achieving savings, we agree with the president of the CBI that this looks unrealistic.

We have had concerns about an economy whose growth has been built on the back of debt-financed consumption. We have consistently drawn attention to the rising level of personal debt, which topped £1 trillion last July, and, in particular, to the associated stresses on personal finance which are now showing up in the rising level of bankruptcies and the meteoric rise in the number of referrals to citizens advice bureaux.

We support the principle of a Bill on consumer credit, but we do not believe that that will solve everything. In particular, it will not solve the plunging savings ratio, which is now one-third lower than in 1997. It is a pity that pension matters are being discussed during another of our days of debate on the gracious Speech because that is where the Government have done huge damage to the savings culture, including their £5 billion annual ACT raid on pension funds.

Let me give an example of the Government's complacency on savings. The noble Lord, Lord Davies of Oldham, said on 9 June 2004:

"The fact that the people today are prepared to reduce their savings ratios is a reflection of the fact that they have faith in the Government's handling of the economy".—[Official Report, 9/6/04; col. 339.]

We totally reject the assertion that a reduced savings rate is acceptable. That is a key part of the pensions problem going forward. It is about time that the Government stopped attacking savings—for example, trying to destroy PEPs and ISAs—and started concentrating on helping people to save for their financial future. The absence of any reference to savings in the gracious Speech is a further testament to the Government's poverty of action.

I look forward to the rest of today's debate. I am sure that the Benches opposite will do their best to put a shine on the Government's record on economic affairs. But I doubt that they can explain away the rising tax burden under this Government, with 66 tax rises achieved largely by stealth, or that they can rationalise why the Chancellor has been spending so much but has so little to show for it.

We believe that this country deserves a government who can deliver not only cleaner hospitals, school discipline, controlled immigration and more police, but also lower taxes. This Government have certainly not delivered those things and their programme for this Session gives us no confidence that they ever will.
 
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11.35 a.m.

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