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Lord Razzall: My Lords, in winding up from the Liberal Democrat Benches on this important debate on the gracious Speech, I first join with other noble Lords in congratulating the noble Lord, Lord McKenzie of Luton, on his well-deserved promotion, and adding my congratulations to the Minister on his reappointment. It is personally reassuring that in all the vicissitudes of life, the noble Lord, Lord Sainsbury, will always be with us.
I share the views of my noble friend Lady Thomas of Walliswood, who expressed some surprise, as we did not think that we had come here to deal with an attack on Liberal Democrat policies in the election, easy as they are to defend. I suppose that the noble Lord, Lord Marlesford, who I see is not in his place, perhaps regressed to his early days as a paid researcher for the Conservative research department in central officeor maybe it was as one of Ted Heath's special advisers. I was also somewhat disappointed, although I sympathise with the temptation, by the barrack room intervention of the noble Lord, Lord Tomlinson, in particular because when he made his speech I cannot think of one word that I disagreed with. No doubt the Hansard writers will put that in and delete his intervention, on the grounds that I have recovered the ground with him.
In one sense, the debate on the gracious Speech immediately after an election requires spokespeople for political parties to some extent to state where we stand on the issues relevant to the debate. First, let me say absolutely and unequivocally that the Liberal Democrats stand for a free market. We believe that there is no more important role for a government than to create a culture and environment in which business thrivesor, to put it another way, to encourage the random efforts of individuals throughout the United Kingdom. Those random efforts produce the prosperity from which we all benefit, and without them we cannot have the public sector improvements to which we all aspire, as the noble Lord, Lord Tomlinson, said.
I agree with the comments made on this side of the House, although not that many were made from the Conservative Benches, that the Government deserve congratulation on the way in which they have managed the economy for the past eight years. I shall not make the party political point about our policy on the matter, but clearly the decision to give independence to the Bank of England has provided the macro-economic stability which the country needed after the period of stop-go, stop-go under the previous administrationto use the phrase that Gordon Brown so loves.
However, having listened to the Chancellor at the CBI dinner last night, those who were there will wonder whether sometimes the self-congratulation is marginally overdone. There have been other factors which have led to the relatively benign economy that we have had in this country since Labour took over. I would highlight three factors. First, we were fortunate that the devastation of manufacturing industry that
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occurred during the Tory years occurred before the serious invasion from the Far East into the manufacturing capability. We now have an economy in which, with luck, only 20 per cent constitutes manufacturingand probably only half of that is manufacturing as we originally knew it, because the other half is assembling parts in the UK which have often been made overseas. So to an extent, while the gales of competition from the Far East have battered the United States, France, Germany and the other major manufacturing economies, this Government have been lucky that Margaret Thatcher, dare I say it, did their dirty work for them 20 years ago in eliminating large swathes of manufacturing industries by the economic policies that the Tories adopted during that period.
The second fortunate result that the Government have had is that as a result of the disappearance of the low value heavy weight industrial base that we used to have, we now have a number of areas such as financial services, computer related services, leisure and high technology services, which, in the case of the first two, have high added value. The terms of trade for those services have been very beneficial to the United Kingdom over the past few years. In the third case of leisure, clearly that is not subject to competition from the low wage economies of the Far East. The Government have been lucky in that respect.
Thirdly, the Government have been lucky in inheriting a deregulated economy by comparison with almost all our other competitors. It is on that area that I want to focus and follow on from the comments of my noble friend Lord Vallance. It is in the area of regulation that the Government are in danger, unless they are careful. I shall not go quite so far as the president of the CBI who yesterday mentioned killing gooses and use the unfortunate analogies that he used. However, having listened to the Chancellor and the president of the CBI last night, I hope that we are not moving into a period in which the CBI takes the view that everything the Government do is wrong and the Chancellor takes the view that everything business does is wrong. It is very important that the developments which occurred, particularly under the presidency of my noble friend Lord Vallance, should continue and that the dialogue between government and the CBI should not break down.
I thought that the president's speech which I heard at the dinner last night could just as easily have been delivered during the 1950s when capital was opposed to labour and the horny sons of toil, or ordinary working people, as Labour so loved to call them, were in its eyes being persecuted by wicked employers. I hope that that will not be the case and that the dialogue between the two will continue.
However, we must again give the Government credit for what they have done as regards deregulation and the abolition of regulations. The Better Regulation Task Force under the noble Lord, Lord Haskins, and now under David Arculus is doing very valuable work in this area. In the run-up to the election, during the election and, indeed, since we have heard a number of fine speeches and fine statements on that matter from
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the Chancellor of the Exchequer. For example, buried about the time of the Budget was a statement by the Chancellor of the Exchequer that we should introduce a system under which for every regulation that was introduced one should be removedthe one in, one out principle.
There has been a proposal from the Chancellor of the Exchequer or the Treasury that there should be a common commencement date, certainly for employment regulations. There should either be one or two commencement dates6 April or 1 November. Indeed, I believe that it is proposed to move to only one commencement date for employment regulations. There has been another proposal from the Chancellor or the Treasury that the Government will embark upon the measurement of the administrative burden of regulations so that we can measure what the cost to the British economy is of the burden of those regulations.
Last night in his speech to the CBI the Chancellor indicated that he would introduce a major culture change regarding form filling and regulation for business. A major culture change was promised to the business community last night. The concern of noble Lords on these Benches is that the words are fine but, unless I am completely mangling a metaphor, fine words butter no parsnips. What we really want to know from the Minister when he responds to the debate is what practical stepsI follow the speech of my noble friend Lord Vallancewill the Government take to implement these perfectly worthwhile objectives? For example, will the Minister confirm that the one for one undertaking is copper bottomed? Are the Government now saying that for every one regulation that is introduced another one will be removed? Will the Minister confirm that there will be a common commencement date for not only employment regulations but for all regulations so that business knows that they all come into effect on either one day or two days? Will he also confirm that the study of the measurement of the administrative burden of regulations will take place?
I understand that the Dutch have calculated that 3.6 per cent of the Dutch GDP was going on the administrative burden of regulation. Therefore, on that basis a 25 per cent cut in the administrative burden of regulation would add 1 per cent to a country's GDP. Are the Government prepared to say what target they will set in that regard? Will they confirm that there will be a measurement of the administrative burden of regulations and, if so, what target will the Government set for the efficiency savings to come from the abolition of the appropriate number of regulations?
As my noble friend Lord Vallance indicated, we are sceptical that without specific proposals from the Government, fine words will not result in action. As the Minister will be aware, the Liberal Democrats' election manifesto contained three specific proposals in this area to which my noble friend Lord Vallance referred. First, it stated that no new regulation should be passed until a full assessment of its costs and the necessity for it is published. Secondly, as regards the point that my noble friend made about a sunset clause, our manifesto stated that any new regulations
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affecting business would automatically be scrapped after a period unless Parliament specifically approved their renewal. Thirdly, our manifesto included a recommendation to rationalise inspection procedures so that all sorts of inspectors would be replaced by one all-purpose inspection. The answers that the Minister gives to my specific points will be very important.
I refer to the role of the Department of Trade and Industry. As the Minister and noble Lords will be aware, we on these Benches advocated in the election campaign that the DTI should be abolished. When we say "abolished", we thought that some activities of the DTI should be stopped altogether, some activities should be devolved to regional government and that some activities should be devolved to other ministries. I wish to indicate three reasons why events have demonstrated how prescient we were in this area. First, can anyone really say that the behaviour of the Department of Trade and Industry over the Longbridge saga was a feather in its cap justifying its continuation?
Secondlyand this is a fundamental pointyour Lordships will have noted that when I listed all the proposals we have heard from Her Majesty's Government regarding the abolition of regulation, nowhere did I say that that was proposed by the relevant Secretary of State for the Department of Trade and Industry. In every case these proposals have come from the Chancellor of the Exchequer and the Treasury. Where is the DTI in this? If the Chancellor of the Exchequer is to do that, what is the role of the DTI here?
Thirdly, I cannot resist following the noble Lord, Lord Wedderburn, on the matter of the name. I never thought that if we were to propose the abolition of the DTI, the Prime Minister would assume that he had dealt with that proposal by simply changing the name and leaving the functions. Until the noble Lord, Lord Wedderburn, explained the matter I did not realise that expense had been entered into regarding stationery and signs. Bearing in mind the acronyms that were being produced for the new ministry which ranged fromdare I say it?PIE through to PENIS, it is no surprise that the Government quickly changed their decision after 48 hours. On the assumption that on the Floor of your Lordships' House the Minister will not concede that he has listened to our arguments and the DTI will be abolished, I urge him to follow the advice that came from behind him.
When Peter Mandelson was the Secretary of State for Trade and Industry, he produced an extremely effective White Paperalthough it was not white; it was all coloured, because that was the Mandelsonian stylethat contained tasks and objectives against which the performance of the DTI could be measured. Is the Minister prepared to renew that exercise and produce a statement of the objectives of the DTI in detail over the next year or two against which your Lordships and those in another place can monitor the progress of the DTI on those difficult issues?
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