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Finally, building Britain's future must clearly start here-in this Parliament-with our commitment to cleaning up politics and establishing a new and strong democratic and constitutional settlement to rebuild trust in politics. I can announce today on the House of Lords that we will legislate next Session to complete the process of removing the hereditary principle from the second Chamber and to provide for the disqualification of Members where there is reason to do so. We will set out proposals to complete Lords reform by bringing forward a draft Bill for a smaller and democratically constituted second Chamber.

There is a real choice for our country: creating jobs or doing nothing; driving growth forward or letting recession then take its course. We will not walk away from the British people in difficult times. I commend this Statement to the House".

My Lords, that concludes the Statement.

5.10 pm

Lord Howell of Guildford: My Lords, I thank the noble Baroness, the Leader of the House, for repeating this quite long Statement. I know that it is conventional on these occasions to say that it is an important Statement. It certainly has a very puffed-up and important title: "Building a Stronger, Fairer and More Prosperous Britain". I am sure that I have heard that before somewhere but that may not be the case.

However, I am afraid that it is not an important Statement; it is a self-evidently dismal and desperate Statement. It is the last sad relaunch and the last hoorah of a dying and directionless Government. It is a mixture of old ideas that never were and new wheezes that never will be. There is nothing in it that restores our very bruised national pride as a result of recent failures or to help our hard-pressed Armed Forces in the difficult wars that they have been fighting, or anything on that side. The Government have so lost touch with reality that they are now coming to Parliament with a programme for a Session that they will never complete. You can spin as much as you like but you cannot spin out the 11 months before this Parliament ends.

Anyway, it is not the next 11 months that people are angry about, as they are, with their jobs going, their pensions in danger, their homes going and their hopes dying. That is not what is worrying people. It is the fruit of the past 11 years of mismanagement of the economy by the Prime Minister and his predecessor that has reduced our national finances to chaos and blighted prospects for the younger generation; it is the disastrous failed foreign policy that has so dismally set back our standing in the world to the point where it is embarrassing having to explain UK affairs at international conferences, as I have found recently on more than one occasion; and it is the never-ending stream of bossiness, silly targets-now, I understand, abandoned; it turns out that targets were not the thing after all-regulations and interference that have hit every part of our nation and weighed down on so many of the very sectors, such as policing, health and schools, that this Statement claims to want to help. This culture

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of short-termism, spin and broken promises has degraded the honourable calling of politics, as it used to be, and, frankly, made politicians little more than a laughing stock. This Government's credibility is completely bust. To confirm that, just ask the Governor of the Bank of England. It is also tragic that our country has very nearly been brought to the point of going bust. It is not a new press launch that Britain needs; it is a new Government.

Of course, in this long Statement-it could hardly be otherwise-there are aspirations with which we agree: on the new low-carbon technology, although whether the methods for achieving it are right, I am not so sure; on smart meters; on the impartiality of the Civil Service; on more flexibility in housing; and on the cluster munitions ban, which is very good news. We on this side have been urging these ideas-in some cases, for years-and we welcome them. However, do not the Prime Minister and his advisers understand that what is wrong with this Government is not that the Prime Minister cannot pinch policy ideas-anyone can do that; we can all pull together a policy agenda-but that he and his Cabinet are so bad at basic administration, so inept at following through one-day headlines and so hopeless at seeing the glaring divide between the world as they think it should be and the world as it actually is that the Civil Service is demoralised, the administrative machine of this nation is stalling and people are getting really frightened at the uncertainty all around them.

We have just spent weeks in this House discussing the privatisation of Royal Mail. What has happened to that legislation? Please would the First Secretary of State tell us why he is not proceeding with this measure either in another place or here? We hear the usual argument about lack of parliamentary time, so if there is no time for that, how can there be time for this second-rate Statement of vacuitous quality.

The one person whom I do not want to criticise is the noble Baroness, who has a difficult job. She is a good and much respected servant of this House. Frankly, we may need her very much in the days to come with some of the nonsensical proposals that we hear on constitutional change. She knows that much of this Statement cannot be taken seriously. How can one take seriously a programme, announced by an Administration that in one breath say they will spend, spend until kingdom come, but who have not even the minimal sense of responsibility to come to the country with a comprehensive spending review, which is a concept that has been opposed or abolished to oblivion by the First Secretary of State? It is yet another menu without prices, of the sort that we have seen so often.

The public know perfectly well that you have to balance the budget in the end. They understand that there are bound to be public-spending reductions to bring the books back in balance, whoever holds power or office. The difference is not that one side will control spending while the other will let it rip, but that under Labour, thanks to failed statist policies, we will see a shrinking cake, with an economy continuing to stagnate, collapsing growth and blooming borrowing, and inevitably higher interest rates to clip off the green

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shoots all too soon. Under Labour the state will take more of less. We need a new Government in a new Parliament of freshly elected Members to carry matters forward with authority. This Parliament is now bereft of authority, which is obvious to everyone except the Government Front Bench. In the few months of life left to them, the Government cannot do much good, but they can do some damage. Putting off plans to tackle the deficit will do much damage.

As for constitutional change and renewal, political reform is one area where we truly risk rushing into dangerous errors, and where your Lordships' House can play a vital role as a cooling Chamber. Incidentally, what has happened to that great constitutional matter of the Lisbon treaty? There is no mention of the mini-treaty to be tacked on to the Croatian accession treaty, to please the Irish, which is supposed to be coming along. We will not welcome it if it arrives on our watch.

Meanwhile, as my noble friend Lord Strathclyde said the other day, this House should just not accept that if a Government are in trouble in another place they should have a go at your Lordships' House as a substitute for their own repair. I agree with the comments of Professor Vernon Bogdanor, a notable constitutionalist whose new book is reviewed in today's FT. He said that there was no logic in proposing constitutional reform to deal with expenses fiddles. I agree, too, with the noble Lord, Lord Rees-Mogg, in today's Times. There are great risks in reversing the liberties over our Executive, which were won in the Bill of Rights of 1689, by setting up unaccountable quangos to dictate to Parliament and by letting the courts into deciding not just pay and allowances-that is perfectly sensible-but the whole pattern of how MPs behave and what they may safely say in Parliament without it being used in evidence against them. That undermines the very foundations of our representative democracy. What MPs say is the business and privilege of voters and electors who sent them there, not of executive agencies, the courts and the state.

Legislate in haste, repent at leisure. The House should look with extreme care at some of the constitutional implications of what is about to come before us. The court of public opinion, to which Ministers are fond of appealing, would certainly not forgive us if we failed to do so. They would ask louder than ever what the House of Lords was supposed to be for. To rush through this Parliament deep constitutional change would be inappropriate at any time, but for a dying Government to try to ram it through just before this Parliament expires is completely unacceptable and improper.

I say again that we need a newly elected Parliament of men and women with a fresh mandate to grapple with such great matters. Overall the Statement brings once more the familiar flood of mindless tinkering and overhasty political change that is the hallmark of this Government and their so-called strategists. There is a tide in political affairs, as William Shakespeare and, for that matter, Jim Callaghan a former Labour Prime Minister, remarked. With this tide the Government are now being washed out and they should float away with some dignity before they do our nation any more great harm.

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5.20 pm

Lord McNally: My Lords, it is a pleasure to see the noble Lord, Lord Barnett, in his place because I know that on an occasion such as this he is ready to ask a helpful question of the Government. I have no intention of being rude to the noble Baroness, Lady Royall. Up to almost 30 seconds ago the author of the Statement was listening carefully. Today's Financial Times, which is authoritative because it has an interview with the noble Lord, Lord Mandelson, so he must have checked over what Mr George Parker was going to write, states that,

He has not achieved much by delay. There is another interesting quote in the same article from an unnamed government official, saying:

"There is a fixation on producing endless policy documents-a total lack of interest in delivery".

That is the real problem. These tactics have been used before. Those with long memories remember the Government's annual reports: great glossy things with lots of pictures. They quietly died. Then I heard, which shows how successful the Government are, a journalist on the radio the other day saying that the Government would be publishing the traditional early look at the Queen's Speech. That tradition is about two years old. It is all part of the same thing: the Government believe that they have two bites at the cherry: one in the summer and another in the autumn, giving an idea of dynamism and action. The problem was that last year, by the time the autumn came, most of the promises that had been made in the pre-Queen's Speech in the summer had been jettisoned.

So it was with some degree of scepticism that I listened to the Statement. I agreed with a great deal of it, but it sounded like the manifesto for a party seeking office rather than one defending 12 years of its stewardship. For example, the commitment on social housing is entirely welcome. I say that as a vice-president of Shelter and I see another in the Chamber. The Government have one of the worst records on building social housing of any Government since the war: 3,000 council houses were built the year before last. It is deathbed repentance with a vengeance. The promise to allow councils to spend the money from council house sales was one of the big arguments in the 1980s and one of the issues on which we attacked the Tories most of all: that councils were not able to recycle the money into new council house building. But we get that in the 12th year of a Labour Government. As Harold Wilson once memorably said, where have you been, Rip van Winkle?

Let us have a look at climate change. My right honourable friend Nick Clegg said the other day that he went to one of the new North Sea wind farms and although he searched in vain he could not find a single piece of British-made equipment on the wind farm. It was all made in Denmark and Germany. If Denmark and Germany have managed to get ahead of the game in that kind of investment, where have we been? Why is it now to be put into such a commitment? We support rail electrification and we have the right man to do it in the noble Lord, Lord Adonis-

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Noble Lords: Hear, Hear!

Lord McNally: You want to look at his antecedents, my Lords. They are very interesting and noble Lords will understand where he gets all his good ideas from. However, the price tag comes into the question. As my honourable friend Vince Cable pointed out the other day, we are dealing with a Government with rising debts and falling revenues, yet here they are today signing blank cheques and spending money like there is no tomorrow. It is very dubious.

I feel strongly about youth unemployment. I saw a forecast by the Centre for Cities that stated that the number of young people who have been out of work for a year or more will almost treble by 2011. We will look at this commitment very carefully because one of the biggest dangers we face is a generation that is either unemployed under 25 or saddled with debt under 25. Coming from a generation that benefited greatly from state support, I think that is a bad legacy to give this generation in the 21st century.

On Lords reform-

Lord Hoyle: Ha!

Lord McNally: The noble Lord, Lord Hoyle, makes a great horse laugh, my Lords. It is very sad that, in their dying months, a Labour Government suddenly commit themselves to something they should have done 12 years ago when they were not being outmanoeuvred by Lord Cranborne and Lord Weatherill. The truth is-and I say this with some sadness-that the Prime Minister is now the Archie Rice of politics. He is going through an old routine that the public have grown tired of.

When people made promises they could not keep, my old mentor Jim Callaghan liked to use a quote:

"I can call spirits from the vasty deep."

"Why, so can I, or so can any man;

But will they come when you do call for them?"

We have had some pretty vast spirits summoned in this Statement, but there is great doubt about whether the Government have either the capacity or the time to deliver them.

5.28 pm

Baroness Royall of Blaisdon: My Lords, I shall start on the note on which the noble Lord ended: vast spirits. Now is the time for vast spirits. There is so much to do. We are in the middle of a global economic crisis. Most of the people out there would understand why it is important for the Government now to refocus on growth and jobs. That is precisely what this Statement does.

I entirely refute the words of the noble Lord, Lord Howell, that this is an unimportant Statement. It is hugely important, and most people out there who are worried about their housing, their jobs and the future of their children will understand its importance. As for his statement that people throughout the world are condemning what we are doing on the national stage, that is not the case, especially in relation to things such as climate change. Most people would understand that we are leading the charge on climate change. Together with our European colleagues, we are leading the charge before the important meeting at Copenhagen.

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The noble Lord also discredited targets. Without targets, where would we be? We might well be in a situation where people were still waiting 18 months for an operation, not a maximum of 18 weeks. We might well be where people were dying of cancer because they had not seen their consultant within two weeks. This is what is happening now, and we are determined to ensure that people will be entitled to have operations within that time. That is the newness of this Statement. Targets have improved outcomes.

There are a huge number of new policies in the Statement. When noble Lords read it carefully, they will see this. I thank the noble Lord, Lord Howell, for his support for legislation on cluster munitions and housing-that will be extremely useful as the legislation comes through the House in the coming months.

We understand that people want real help now and that they want the Government to provide it. That is why they will welcome the Statement. The noble Lord asked about the Royal Mail. My noble friend Lord Mandelson said on the radio this morning that the Bill is jostling for space in the legislative programme, but we are committed to implementing the Hooper review.

The noble Lord took us to task, as did the noble Lord, Lord McNally, for spending money and investing, but we believe that it is of fundamental importance to invest now in people, jobs and infrastructure in order to get us out of the recession and ensure that we come out the other side as a nation capable of taking advantage of new opportunities. We were criticised for putting off dealing with the deficit, but tightening spending too early could prolong and even deepen the recession. To ensure sound and sustainable public finances in the medium term, once economic shocks have worked their way through the system, the budget plans will halve borrowing within five years.

On the subject of constitutional renewal, the noble Lord mentioned the need for a mini-treaty to ratify the protocol for Ireland. That will come once talks have progressed with Croatia and possibly with Iceland on membership of the European Union. That is what we are waiting for in relation to a treaty. The noble Lord asked what the other place was doing in terms of reform. I draw the attention of noble Lords to the Wright committee. I mentioned Iceland because there are talks about Iceland at present-I will come back to that in future.

As far as concerns a parliamentary standards authority, I was under the impression that there was a broad consensus that it was right to go ahead with a parliamentary standards authority now in order to put the other place on a new footing to deal with the financial problems that it has encountered over the past months. I hope that, given the views expressed today, the consensus is not falling apart. On the subject of House of Lords reform, I understand the scepticism expressed by the noble Lord, Lord McNally, but the forthcoming legislation will build on the cross-party consensus that all parties have agreed on. The Government intend to present their proposals for comprehensive reform shortly and will produce a draft Bill in the next few months, having consulted the other main parties.

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The noble Lord, Lord McNally, criticised us because he felt that this was a manifesto. This is not a manifesto. It is entirely appropriate, following two unprecedented events-the global economic upheaval and the crisis of confidence in our parliamentary institutions-that the Government should set out new policies. We would deserve to be criticised if we did not do that. I am proud that we are still in government after 12 years and we intend to continue for much longer. I reflect that the Liberals have not been in power for some time.

The noble Lord asked about wind farms and what we were doing to ensure that British technology was used. I hope that the innovation fund mentioned in the Statement will provide public money to assist with wind power projects.

On the question of youth unemployment, of course we all fear for the employment prospects of our children and their peers. Again, that is precisely what the Statement does-it sets out our policies for ensuring that young people today do not suffer from the recession in the way that young people suffered in the past. With that, I look forward to further questions.

5.35 pm

Baroness D'Souza: My Lords, I thank the noble Baroness for repeating the Statement and apologise for raising a parochial matter. Would it not be highly desirable to establish a retirement plan for the House of Lords before the next election so that numbers in the House might be kept within limits that would be acceptable to a wider public?

Baroness Royall of Blaisdon: My Lords, I understand the attractions in principle of a retirement plan, which is sometimes bound up with statements about resignation and retirement. It would be fair to say that the Government are still reflecting on that, and we will come back with proposals in due course.

Lord Howarth of Newport: My Lords, will there not be a very warm welcome across the country for the energy and practicality with which the Government are addressing themselves to ensuring that there will be jobs for the people who have been hardest hit by the recession, promoting growth in what ought to be the lead sectors of our competitive economy in future and ensuring the provision of more social housing?

On the question of restoring trust in politics, does my noble friend share my view that one reason why many people have become somewhat jaundiced about politics at Westminster is that, for the best part of half a century, central government has interfered unduly with the structures and freedoms of local government? Should we not therefore welcome the enlargement proposed in the Statement of the role and responsibilities of local authorities to meet housing needs and the possibility that they may be allowed to retain the full proceeds of sales of council houses and rents? Is not the new policy of stating what citizens should be entitled to expect from local service deliverers, while allowing local service deliverers greater freedom to determine how they will provide those entitlements, a constructive move to balance fairness with local discretion? Will it not help to renew the culture of our local democracy and therefore our democratic culture as a whole?

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