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As part of the Government’s drive for better regulation, departments will shortly publish simplification plans, as mentioned by my right honourable friend the Prime Minister at the CBI conference today. The DTI’s plan will have a straightforward purpose—to reduce the cost and complexity of the department’s regulation. A wide range of measures will reduce the DTI’s administrative burdens by up to 25 per cent.
We cannot discuss globalisation without referring to our low carbon energy future. There are no bigger challenges facing government than how we deliver energy security and tackle climate change. Sir Nicholas Stern’s report made it clear that the scientific evidence is now overwhelming and that the economic case for an urgent response is irrefutable. If we do not act, the overall costs of climate change are equivalent to losing at least 5 per cent of global GDP now and for ever. The costs of taking action can be limited to around 1 per cent of global GDP. With the publication of the Energy Review this summer, the Government have shown their determination to address the twin challenges of tackling climate change while securing the country’s energy supplies.
There is no doubt that tough decisions are needed. The UK is entering a new era for energy supplies. For years, we have been an energy island, self-sufficient in gas and oil, thanks to North Sea production. The Government are working with industry to extend the life of energy resources in the UK’s continental shelf, and there is record interest in our innovative exploration and production licences. But, by 2020, we are likely to be importing 80 to 90 per cent of our gas. My department is engaged proactively with the energy industry, which is meeting this challenge with £10 billion of investment in infrastructure to bring in and store supplies from diverse sources. At the same time, we need new investment in all forms of low carbon generation. We need energy in the future that will be affordable, secure and clean. And we need to use it more efficiently.
Our strong, long-term commitment to renewables is well known and is bearing fruit. Driven by the renewables obligation, we are already producing about 4 per cent of our electricity from renewable sources such as wind farms, but our ambition is even greater. We have our sights set on a fivefold increase—20 per cent—by 2020. But the reality is that renewable energy simply will not be able to provide all the new electricity generation we need in the timescale in which we need it. That is why our review concluded that we would need a range of security of supply measures and low carbon options, including nuclear,
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On affordable energy, fuel poverty is an issue that has been raised by your Lordships’ House. The Government have taken significant steps in the past 10 years to drive down the number of people in fuel poverty. For example, the winter fuel payment was only £20 in 1996-97. This year, about 11.5 million pensioners in more than 8 million households will receive payments of £200, rising to £300 for people over 80. We are spending £800 million on improving heating and insulation in low-income households through initiatives such as Warm Front. But rising energy prices mean that we do have to keep up the pressure and use all the means available to reach and protect the most vulnerable homes, particularly during the winter.
The Consumers, Estate Agents and Redress Bill will give consumers a stronger voice. Our proposals on estate agent redress will put power back into the hands of the buyer and seller. Buying a home is one of the most important decisions that anyone can make. Most estate agents operate honestly and fairly, but some do not. Indeed, research shows that 21 per cent of sellers and 23 per cent of buyers experience problems with their estate agents. All estate agents will be required to belong to an approved scheme to determine disputes between estate agents and buyers or sellers of residential property in the UK. Approved schemes will also award compensation. The Bill will also ensure that agents refusing to join the scheme will be banned from operating, and that other rogue estate agents could be banned from continuing in business. We will also require estate agents to keep records of client dealings for six years, which trading standards officers will be empowered to inspect without notice.
On doorstep selling, consumers will be given the same seven-day cancellation and cooling-off rights for a sale made during a solicited sales visit as they have for a sale made during an unsolicited one. This will make it more difficult for rogue traders to operate successfully. The Bill will also bring together Energywatch, Postwatch and the National Consumer Council to form a more coherent and effective voice for consumers, giving them a single point of contact for dealing with problems. The Bill will be fair for business and good for the consumer.
The Statistics and Registration Service Bill has been introduced in another place. The Bill aims to entrench statistical independence through the creation of a new, independent board with statutory responsibility for ensuring the quality and comprehensiveness of official statistics. The board will be outside ministerial control, established as a
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Moving on to issues covered by the Department for Culture, Media and Sport, I hope that noble Lords will support the Digital Switchover (Disclosure of Information) Bill. The country is due to switch its analogue televisual broadcast signals over to digital region by region between 2008 and 2012. Since 1998 the shift to digital television has been rapid and impressive. Today, more than 70 per cent of UK homes have a digital TV. Digital switchover, which will start in Whitehaven at the end of 2007 and the rest of the Borders region in 2008, will bring considerable benefits to the UK, primarily to the 25 per cent of homes that cannot get digital services through an aerial now. There will also be benefits from the release of spectrum currently used by analogue which can be used for new and dynamic services to support future economic growth. But switchover needs to be an inclusive process and no one should be left behind. That is why the Government have established a comprehensive help scheme for those aged 75 and above or with a significant disability. We want to make it as easy as possible for those who most need help to get the assistance they need through the transition to digital switchover. That is why we are introducing a Bill to allow the Department for Work and Pensions to share social security data with the operator of the help scheme. The measures are supported by the digital switchover Consumer Experts Group which is comprised of organisations such as Age Concern, RNIB, Help the Aged and the National Consumer Council.
Also regarding the Department for Culture, Media and Sport we will publish in draft a Bill to enable the subsequent ratification of the UNESCO Convention on the Protection of Cultural Property in the Event of Armed Conflict. The Bill will strengthen our commitment to the protection of our own heritage and formalise our responsibilities as part of the international community in respecting the cultural property of other nations. It will send a clear signal that the UK takes seriously its commitments under international humanitarian law.
This is a brief summary of the Bills we are about to receive. The measures the Government propose will bring new benefits to businesses and to the public, maintaining security and development and meeting the challenges of the future.
3.23 pm
Baroness Noakes: My Lords, it is a pleasure to speak on the final day of the debate on the Address and I welcome the noble Lord, Lord Truscott, to what I think is his first major debate in his new role at the Dispatch Box. It is good to see that so many noble Lords have saved their contribution for our debate on industry, the economy and consumer affairs. It is also a privilege for us that two noble Lords, the noble Lords, Lord Bilimoria and Lord Rowe-Beddoe, have chosen today to make their maiden speeches. I look
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Today I shall speak on matters relating to the economy and from a Treasury perspective. My noble friend Lady Wilcox is our new shadow Minister for Trade and Industry and is to wind up for these Benches. She will focus more on industry and consumer affairs, and between us we hope to cover the whole pitch.
The gracious Speech contained the words:
This implies that the Government are currently successful on all these measures, but they have yet again, I fear, used the gracious Speech as an opportunity for spin. When the noble Lord, Lord Giddens, moved the humble Address nearly two weeks ago, he said that the health of an economy could be seen in its rate of employment, not its rate of unemployment. He then went on to compare the UK’s employment rate of 75 per cent with those of the sick economies of Europe: France, Germany and Italy. This is, at best, complacent. If we were not doing better than those countries we would be in very serious trouble indeed.
On these Benches we have very real concerns about the rate of unemployment. It is increasing month after month and now stands at more than 1.7 million—that is 5.6 per cent—which is the highest for seven years. Real unemployment, including those out of work and on benefits, is over 5 million. Furthermore, the number of 16 to 18 year-olds not in employment, education or training has risen by more than 40 per cent since 1997 despite the New Deal for young people. These issues need to be addressed.
We also need a word of caution about these statistics. We know that our population is rising, due largely to unplanned, rapid immigration. The governor of the Bank of England has cautioned that net migration has,
but that we do not have up-to-date or reliable statistics. So we do not know what is happening in the labour market. There is also the impact of immigration on GDP growth, especially as our recent performance, while better than originally forecast, has been below the EU average. I hope that the Minister will say something about the Government’s view of the impact of recent immigration on what is happening in our economy.
The current rate of inflation means that the people of this country are experiencing falling living standards; wages are currently rising less than the prices experienced by ordinary people. The retail prices index currently shows inflation at 3.7 per cent. Fuel inflation, which of course hits the poor hardest, is running at nearly 30 per cent. People are less able to withstand this inflation hit because the Chancellor’s stealth taxes mean that there is also a squeeze on disposable incomes, which have been stagnating or even falling. So, when the gracious Speech referred to
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The gracious Speech also referred to sound public finances being maintained. I do not understand how the Government’s record on borrowing can be regarded as sound. Debt has gone up 8 per cent in the past year and is now nearly 37 per cent of GDP—and that is on the basis of the Treasury’s own measures. The Centre for Policy Studies has today published a pamphlet which calculates that, once hidden debt is included, debt is well over 100 per cent of GDP.
What the Queen’s Speech did not say was that her Government would carry on borrowing and raising taxes as if they were going out of fashion and then waste quite a lot of the proceeds by spending on unreformed public services. With regard to the NHS, since the Government came to power, spending on the NHS has doubled but efficiency has gone backwards in almost every year. A series of costly reorganisations does not amount to a reform programme. We now have the predictable results of cutbacks in major hospitals, closures of community hospitals and 20,000 NHS jobs being lost.
Only last week the Chief Secretary was bragging that the Government have already achieved £13 billion of the £21 billion savings promised by the Gershon programme. But these assertions have not a shred of justification and we must remember that the NAO reported that savings which have been previously claimed by the Government from the Gershon programme were,
We simply do not believe these efficiency claims and we will not believe the Chief Secretary’s call for a further 3 per cent per annum of efficiency gains until they are delivered and audited.
All Governments say, quite sincerely, that they want value for money from their public spending, but achieving it is a different matter. It is pretty obvious that value for money is impeded by secrecy and aided by openness and transparency. There was nothing in the Queen’s Speech on this, so I will help the Treasury to achieve a higher quality and quantity of public scrutiny of departmental spending programmes by introducing a Private Member’s Bill in this Session to achieve greater transparency. I look forward to support from the Government Benches in this endeavour.
Our country needs a healthy business sector if we are to deliver the economic growth and prosperity that underpins healthy public finances and improved public services. But there is no evidence that the Government really understand this and nothing in the Queen’s Speech addressed the need to help British business to compete in the global economy, including in China and India.
Under this Government, we have seen the UK plummet down the international competitiveness league tables. We have heard a lot of talk about removing regulatory burdens—the Prime Minister and the Minister were at it again today—but those have remained relentlessly in place. The Chancellor told us in 1997 that productivity is a fundamental
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The World Bank found recently that the UK has the longest corporate tax code of all developed countries, and it was no surprise to read this morning that the CBI’s latest research shows that the Chancellor’s tax changes have adversely affected the UK’s competitiveness. The tax commission report of my noble friend Lord Forsyth found that our system is too complex, too unfair and too unstable. The Treasury really should shake itself out of denial on this.
The Queen’s Speech promised us a Bill on pensions. This will deal only with the reform of the state pension system. There is a degree of consensus on the direction of the Bill, but there remain important issues—not least the level of means testing—on which we have strong reservations. We will have to wait at least another year for the equally important Bill to reform the way in which individuals and their employers will accumulate savings for retirement. That delay will compound the catastrophic decline in the savings ratio under this Government. Neither Bill will undo the harm of the Chancellor’s raid on pension funds in 1997 which has cost those funds at least £100 billion and decimated defined benefit pensions in the private sector. Equally, neither Bill will deal with the increasing disparity between public and private sector pensions or with the unsustainability of the burden of public sector pensions.
Two other Bills were mentioned in the Queen’s Speech which I must mention. The first, the Exchanges and Clearing Houses Bill, will allow the Financial Services Authority to protect our capital markets from unreasonable regulatory burdens. We give this Bill our wholehearted support and look forward to it arriving from the other place later this week.
The Statistics and Registration Services Bill is quite another matter. I was unable to be present at the State Opening, but I am reliably informed that when Her Majesty reached the part about legislation to,
laughter ensued. We have long argued that we need a new structure to deal with the loss of trust in national statistics, but that requires real independence running across the whole range of government statistics. It requires the role of Ministers and their spin machines to be minimised. The best that I can say about this Bill is that it is in the right direction of travel, but I serve notice that these Benches will be looking for significant changes to the Bill that has already been published. I look forward to hearing in particular the views of the noble Lord, Lord Moser, and my noble friend Lord Jenkin, who I believe will be covering this important Bill.
The gracious Speech gave us no hope that the real issues facing the economy will be dealt with in this Session of Parliament.
3.35 pm
Lord Newby: My Lords, I, too, join the noble Baroness, Lady Noakes, in congratulating the noble Lord, Lord Truscott, on his appointment and on his
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However, the Queen’s Speech includes a proposal for a ground-breaking Bill on climate change. Although I do not intend to discuss the contents of the Bill, I do wish to concentrate on climate change. I believe that it is appropriate to do so in a debate on economics and trade because of its fundamental threat to economic activity as we know it. As the Stern report concluded, climate change is the greatest long-term threat facing humanity. It could cause more human and financial suffering than the two world wars and the great depression put together.
Therefore, at one level the Stern report is extremely gloomy reading. It demonstrates that we are on course for a degree of manmade global warming which is unprecedented in scale and potentially devastating in outcome. Business as usual could lead to a reduction in global GDP of between 5 per cent and 20 per cent per annum. Although the noble Lord, Lord Truscott, mentioned 5 per cent, Sir Nicholas Stern suggested that the 20 per cent figure might be nearer the mark. The costs would be unevenly spread, with the poorest nations, as usual, set to be the hardest hit. The report also demonstrates that the window of opportunity to reverse the rise in global emissions is narrowing and that to avoid catastrophic climate change carbon emissions must peak in the next 10 to 15 years. This is at a time when carbon emissions in much of the developed world are still increasing and those of the large developing countries, notably China and India, are racing ahead. Just to take one statistic out of many: the use of coal in China is set to double between 2000 and 2020. Against those pessimistic trends Stern demonstrates that if we take action now it should be possible to stabilise carbon dioxide concentrations in the atmosphere at a less than catastrophic level and at a manageable economic cost. He suggests that it could be the equivalent of 1 per cent of GDP.
I shall assume that the analysis in the Stern report is broadly correct—both as to the science and the economics. I believe that to be the case. Despite the misgivings of some Members of your Lordships’ House—the noble Lord, Lord Lawson, springs to mind—I believe that there is a growing consensus domestically and internationally to this effect. If so, we face a moral and economic imperative to take action and to do it without delay. Is it, however, even vaguely conceivable that mankind is far sighted enough to take action now although the benefits will be seen mainly by our grandchildren and their children?
In coming down on the side of the optimists, I have been greatly assisted by reading the book Collapse by Jared Diamond, in which he charts the histories of societies which have either succeeded or failed, depending largely on their ability to manage their natural resources in a sustainable way. The principal
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The Government seem to share my optimism, in that they have accepted the conclusions of the Stern report. The lack of any coherent strategy to date, however, suggests that a sea-change in approach will be needed if the UK is to take the lead in combating climate change, as the Chancellor has now said he wishes to do. I will not weary the House with a catalogue of the Government’s failure or perversity in their policies on mitigating and adapting to climate change, but, just to show how far they have still to go, I shall mention three. First, environmental taxes have fallen as a proportion of GDP from 3.6 per to 2.9 per cent. Now they are at their lowest level for 18 years. Secondly, the Government are currently facing EU infraction proceedings because of their failure to implement the Energy Performance of Buildings Directive, because of an interdepartmental dispute about what constitutes a public building. Thirdly, in the Thames Gateway over 90 per cent of the land targeted for development lies in the flood plain. It is therefore hardly surprising that the Government’s credibility in this area is pretty low.
Let us be charitable, however, and assume that the Government mean it when they say they want to take a lead in this area. What should they do? They must obviously start by taking a lead at the international level, for it is widely accepted that international action is critical if we are to achieve a sustainable level of CO2 emissions. All major economies will have to curb their emission levels significantly. Because the greatest growth in emissions will be taking place in the developed world where resources are limited, financial and technological support will be needed to enable them to make the necessary changes.
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