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The answer is staring us in the face. We have the necessary scale of financial resources, technology and skills within the European Union. Indeed, a coalition of the willing already exists at the European level. At the same time, a European initiative in this area would engender a truly competitive race with the United States, as they would have to follow suit in their own economic interests. That is where real progress can be made—if Europe and the United States run neck and neck, co-operating only in the sense of deliberately competing in the same event. How would such a race be started? First, an energy technology institute should be set up at the European level, managed by members of the scientific, economic and business communities. It should be at arm’s length from the current policy and advisory activities of the Commission. The UK Government’s national initiative provides something of a model, but the scale would need to be different. Next, European-wide upstream carbon tax should be levied specifically to finance the institute’s energy research and development programme, at a level closer to that spent on defence research. I believe people would understand that and accept it. It simply makes sense. Then, European emissions caps should be adjusted to allow for the effect of the carbon tax. This would have the incidental effect of spreading the financial burden of mitigation more evenly between sectors. Finally, we should stand back and watch the scientific and business communities get their act together, as they generally do when given the right resources and competitive frameworks in which to operate. They got us into this mess, and they are quite capable of getting us out of it, given the wherewithal to do so.
This is not rocket science. It is much simpler than setting up a European emissions trading scheme and, dare I say it, rather more likely to be effective in mitigating warming on a global scale. It is a golden opportunity for the UK Government to take the initiative and for the European Union to show its worth.
4.40 pm
The Lord Bishop of Manchester: My Lords, the maiden speech of the noble Lord, Lord Bilimoria, was especially appreciated on the Bishops’ Bench, and if I may go beyond printed convention, I congratulate him on it. My intervention in the debate concerns the proposals on digital switchover in the gracious Speech. In the debate held on 9 December 2005 I asked the Government to pay careful attention to the difficulties likely to be faced by the elderly, the disabled and other vulnerable people over digital switchover. So I very much welcome the proposals which the Minister has already highlighted, in particular the intention through legislative provision to target the help required.
I was pleased that, for its trial to discover the type of people who would need such help, the DCMS
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Making the names of those needing help available to the providers is good resource management, but there are obvious dangers in that, and I welcome proposals to make misuse of the data an offence. That aspect will require careful scrutiny in debate. The source of the data, coming from social services records—including details of disability living or attendance allowances and other social benefits—underlines what was argued by the Select Committee on the BBC Charter, that this is a social cost and not a broadcasting cost.
When we come to debate the Bill, it will be helpful to know whether thought has been given to how long term the provision of help in using digital equipment will be. Someone who could cope initially but then has a slightly debilitating illness may require a level of help in using the equipment that was not needed earlier. In other words, the issue of how elderly and disabled people cope with or require further help with what are likely to be increasing sophisticated pieces of domestic technology is, in an ageing population, likely to become a bigger issue. The Government are rightly addressing digital switchover and it is currently the presenting problem, but as technology advances ever more rapidly I do not believe for one moment that it will be the only problem. If the future digital rollout is to be socially just, then access to broadband, for example, is an equally important issue for the disabled and the growing number of elderly people. Indeed, in common with many noble Lords, I find that personally I have an increasingly vested interest in these matters.
4.45 pm
Baroness Kingsmill: My Lords, I add my congratulations to those of previous speakers to the noble Lord, Lord Bilimoria, on his excellent maiden speech. He and I have much in common—not least that we are both immigrants, not least Cambridge and the law, and not least an appreciation of his excellent product.
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This Queen’s Speech provides the legislative programme for the Government’s tenth year in office. The past ten years have seen major economic changes for this country and throughout the world which have posed significant challenges for business, both big and small. It is a sensible time for us to take stock and to consider the issues facing us. The best law is that which is made by legislators who are always striving to understand the needs of the modern world and balance these against the timeless principles which have served this country well.
In their first Queen’s Speech nearly 10 years ago, the challenge facing the Government was how best to create a macroeconomic climate that encouraged stability and sustainable growth. Central to this was, of course, Bank of England independence. The success that this move has had is striking. No letters from the governor of the Bank of England to the Chancellor have been necessary since the current policy has been in place. This indicates a very stable level of inflation.
In addition, it was necessary to introduce a sensible regulatory framework. This took some courage because it involved a reduction in government powers, not only in relation to the Bank of England but also—closer to home as far as I was concerned—in relation to the Competition Commission. In my view, these are marks of courageous government. Reducing the powers of government and thereby increasing the freedom to develop a sensible regulatory framework has worked.
We have not had the same hurried rush to legislation which has resulted in the Sarbanes-Oxley legislation in the United States. I was in the United States two weeks ago and it was notable that the Sarbanes-Oxley legislation is a major bone of contention between business and legislators. The visit this week of Secretary of State Paulson is significant. No doubt he will be exchanging views with our own Chancellor as to how to regulate with a light touch.
Because of the Government’s success and the high levels of successful business in this country, the challenges of the next 10 years will be very different. They will require a number of measures which, I am delighted to see, are addressed in the gracious Speech. The Local Government Bill will no doubt assist greatly in allowing our cities to develop further as economic power houses and business friendly environments. The draft Road Transport Bill will help in developing our transport infrastructure. It will increase powers to create toll roads and give councils more freedom to introduce their own schemes. In safeguarding London’s role as a financial centre, the Exchanges and Clearing Houses Bill will allow the FSA to veto regulatory changes made by UK-recognised investment bodies. It is an important Bill which will enable the encouraging regulatory framework our businesses enjoy at the moment to be maintained, no matter who owns the London Stock Exchange.
The Crossrail Bill and the Greater London Authorities Bill will continue the Government’s
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I welcome the Pensions Bill and the commitment to continued consultation with business ahead of future legislation on private pensions. This will lead to a lasting pensions settlement which provides a coherent framework for business.
The noble Lord, Lord Vallance, spoke about climate change. I welcome the Climate Change Bill. The Stern review has been a useful indicator of the economic costs we will endure if we do not grasp the nettle of climate change.
There is a good climate of regulation in this country. We need to do more to help it. I welcome the draft Local Better Regulation Office Bill, which will help small businesses with trading standards and environmental health regulations.
Taken together, these are sensible measures which further enhance the UK’s enviable reputation as a good country in which to do business, where profitable, well-run businesses are seen as a good thing and profitability is not a dirty word. It is the profitability of our companies which delivers social justice and enables us, through tax and pensions, to achieve even more.
We must not get into the same place as the United States in developing an anti-corporate mentality. Sensible measures contained in the gracious Speech will meet the needs of the next 10 years, and I welcome them. There are, however, some areas where I would like to see more. It is important that we develop the education and skills of our people. If we are to compete truly on a global scale, we must not try to compete in those areas where others have greater advantages. Following the words of the noble Lord, Lord Bilimoria, we must encourage an enterprise culture. We must increase ambition and aspiration. In that way, we will improve our performance generally as a nation. We must invest more in our people. We must manage our human capital better. The keynote issues on which we must concentrate in the coming years are free trade, stability, flexibility, education, fairness and assistance with developing the growing nations of the world.
4.52 pm
Lord Sanderson of Bowden: My Lords, I thought it might be useful for your Lordships to hear in this debate from someone who is still actively involved with small and medium-sized businesses. First, however, I congratulate the noble Lord, Lord Bilimoria, on an extremely good speech from a real entrepreneur.
I declare an interest as a director of a plc whose base is in the Channel Islands—I will come back to that later—and as chairman of a private company manufacturing in Scotland. In passing, I might say that I am delighted no longer to have to declare an interest as chairman of a bank’s pension fund. When I was chairman of that fund, as a result of the removal of ACT, I had to change our defined benefit scheme to what our employees considered a much less
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My purpose in speaking today is to question the assertion that the Government have been really friendly to business as has been alleged by some, including the Minister—in other words, that business has never had it so good. I do not believe that the running of business has become easier and less bureaucratic under this Government, and while certain actions have been extremely welcome—I instance the changes to business property relief which have safeguarded ownership of some private companies—the general thrust has not been business-friendly.
I said that I was a director of a plc registered and operating in the Channel Islands, with business interests in mainland Europe. Why the Channel Islands? Simply, the tax regime is business friendly and likely to become more so. By contrast, what about the position of plcs in Northern Ireland? The open border to the Republic means 30 per cent corporation tax in the north playing 12.5 per cent corporation tax in the Republic. I am not surprised that a cross-party agreement exists in Belfast for harmonisation or special treatment from the Chancellor to exempt companies in Northern Ireland from corporation tax on the first 60 per cent of profits. However, you can imagine what sort of reaction this would bring in our small company in Scotland, and in a Scottish election year. Does the Minister have any news on this subject?
The Chancellor inherited a business tax situation which was very competitive in the developed world. I fear that that is no longer the case. Between 10 and 20 years ago, the main UK corporation tax rate was among the most competitive in the world. That is no longer the case because other countries have reduced rates while the UK has kept the rate more or less constant. As the Minister said, corporation tax has to be considered in a global context. We cannot hope to compete in a global economy by setting corporation tax in a vacuum. I fear that we have to do something and I hope that the Chancellor may just do that. What should we do? We quite simply have to cut the main rate of corporation tax and simplify the system. It is easy for the Chancellor to say that he is a friend of business; it is quite another thing to prove it. The difficulty may lie in the fact that he has come to rely on that tax for an increasing part of his tax take. Twenty years ago, companies paid £10.7 billion or 19 per cent, of the direct tax bill. Now, this is estimated to be £41.3 billion or 22 per cent of direct taxes.
I hope that as the Chancellor approaches what may be his last Budget, he will bequeath to his successor in that last Budget something that is good for business. He should remember that in a recent survey, 59 per cent of small businesses described forms and other paperwork they have to complete as too complicated. Some 23 per cent acknowledged that there were tax reliefs which they could have claimed but did not
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I am very anxious that as plcs become more dependent on the global situation and, thus, very mobile, we do not become internationally less competitive. I applaud the Department of Trade and Industry showing that there is a rise in the number of 16 to 24 year-olds thinking of starting a business. Please do not let that seed-corn be snuffed out or stifled by unnecessary and onerous imposition on these budding entrepreneurs. Perhaps I may finish by citing the noble Lord, Lord Bilimoria, who said that, to succeed, this country has to punch above its weight. What a true saying that is.
5 pm
Lord Lee of Trafford: My Lords, I shall use today’s debate to talk about our tourism industry. Sadly, it seems to have only limited interest here at Westminster, yet the industry employs over 2 million people, 7.7 per cent of our workforce. It is our sixth largest industry, with revenue production around £75 billion, and it is still growing. It is the dominant industry in the West Country, the Lake District and Scotland. It plays, and has played, a major regenerative role in many towns and cities in our country.
It was a great privilege to hear the maiden speech of the noble Lord, Lord Bilimoria. With his interests in food, wine and beer, I am sure he is a great supporter of our tourism and hospitality industry. We look forward to hearing the maiden speech of the noble Lord, Lord Rowe-Beddoe, who, as chairman of the Welsh Development Agency for a number of years, I am sure will appreciate the contribution that tourism has made to the regeneration of so many towns and cities in Wales.
I declare my interest as tourism Minister between 1987 and 1989. I have served on the English Tourist Board for a number years, chaired the Museum of Science and Industry in Manchester for many years, and currently chair the Association of Leading Visitor Attractions, a trade body for our larger national visitor attractions which have more than 1 million visitors each per annum.
Successive Governments have treated tourism as something of a Cinderella industry. Rather like an unwanted child, it has been passed from the DTI to the Department of Employment, then to the Department of National Heritage, and now to the Department of Culture, Media and Sport. Ministers over the years have done very little, apart from minor fiddling with the structures of the industry. The tourism industry had hoped that the current
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My criticisms, primarily of government, are attitudinal, structural and financial. Turning first to the attitudinal—that is, the lack of interest or recognition—tourism is not included in the title of the DCMS. In a letter earlier this year to the Secretary of State, Tessa Jowell, setting out her priorities, the Prime Minister hardly mentioned tourism. The chairmanship of VisitBritain has been demoted to a six-day-a-month appointment, a totally insulting role that is something of a joke, given its huge responsibility for promoting England and the huge ambassadorial role it has overseas.
We have also a lack of joined-up government. Witness the disappointing and short-sighted decision recently to reduce funding to British Waterways, resulting in a significant reduction in their maintenance programme on the canal network, which is one of our most undervalued and underdeveloped tourism assets—purely, it would seem, because Defra has failed to control its budgets.
Above all, though, I criticise the relative lack of interest of the Prime Minister and the Chancellor of the Exchequer, where the axis of power in government really lies. To my knowledge the Prime Minister has held only one major tourism industry breakfast, and I cannot recall the Chancellor attending any significant tourism event. Indeed, for the tourism industry, the prospect of Gordon Brown becoming Prime Minister is about as attractive as Britain on a dark, wet, windy November afternoon.
Turning to my structural criticism, Wales and Scotland have clearly benefited from devolved tourism, both in decision-making and in terms of spend. In England it is vital that we have our own national board working with the regional partners—the RDAs—to market England effectively, to co-ordinate activities, not least research activities, and to share best practice, leaving VisitBritain to market the United Kingdom overseas. It is also vital that there is some high-level governmental co-ordination—perhaps a committee chaired by the Deputy Prime Minister or the Chancellor, to include the Secretaries of State for the tourism-related departments, the chairs of our national tourist boards, the chairs of the Tourism Alliance, the chairs of the RDAs and the equivalent representative of the Local Government Association, to lead and co-ordinate our national tourism policy.
I turn to my financial criticism. The current funding of VisitBritain is of the order of £35 million a year, which would these days barely buy half a Eurofighter. It has declined in real terms by 17 per cent since the Government were elected, and there is talk of a further 7 per cent in prospect. Surely it is madness for a country to spend £6 billion or more on the Olympics, the majority of which will be capital spend, and yet not adequately support in revenue terms VisitBritain, which really should be taking advantage of this spend and of the huge tourism opportunity.
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Currently in the USA, our most important tourism market, 24 nations spend more than we do. Ireland spends four times as much in the United States. The industry certainly does not want a bed tax. As for the ability of our museums and galleries to add to their collections—we had a debate on this very recently in the Moses Room—the Metropolitan Museum of Art in New York has 70 times the purchasing power of the British Museum and eight times our National Gallery.
Next March there will be a British Tourism Week to raise tourism’s profile among the public and politicians. It is under the patronage of His Royal Highness the Prince of Wales. My own ALVA organisation has His Royal Highness the Duke of York as our president. The Royal Family plays a major role in supporting tourism in this country. Perhaps senior politicians will use British Tourism Week to demonstrate real interest in the sector and for the first time take tourism seriously.
The changes that I have advocated are relatively modest and easily achievable. But I have one final recommendation. Nothing would give a greater boost to domestic tourism than the bringing in of double summer time. It would substantially expand the tourism opportunity, save hundreds of lives and significantly contribute to a healthier nation. I urge the Government to embrace it without delay.
5.07 pm
Lord Rowe-Beddoe: My Lords, I rise comforted and perhaps a little strengthened in the knowledge that the adrenaline coursing through my veins at this moment has been experienced by many noble Lords and noble Baronesses before me, and most likely overcome. From observation I realise that it is customary to acknowledge the professionalism and courtesy of the staff of this House. Custom it may well be but, endorsing the words of my noble friend Lord Bilimoria, let me assure you that the warmth of reception and attentiveness has been most extraordinary. Your Lordships have been equally generous in your welcome and our Convenor—my noble friend Lord Williamson of Horton—and his staff most helpful.
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