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House of Lords

Wednesday, 23 June 2010.

3 pm

Prayers-read by the Lord Bishop of Liverpool.

Introduction: Lord Knight of Weymouth

3.08 pm

The right honourable James Philip Knight, having been created Baron Knight of Weymouth, of Weymouth in the County of Dorset, was introduced and made the solemn affirmation, supported by Lord Puttnam and Lord Adonis, and signed an undertaking to abide by the Code of Conduct.

Death of a Member: Lord Walker of Worcester


3.12 pm

The Lord Speaker (Baroness Hayman): My Lords, I much regret that I have to inform the House of the death last night of the noble Lord, Lord Walker of Worcester. On behalf of the whole House, I extend our condolences to the noble Lord's family and friends.

UK: International Competitiveness


3.13 pm

Asked By Baroness Valentine

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, we are committed to maintaining and improving our international competitiveness by restoring macroeconomic stability, helping provide infrastructure, science and research and better linking higher and further education into the economy. We will ensure that regulation is proportionate and will work towards having the most competitive corporate tax regime in the G20.

Baroness Valentine: I thank the Minister for her reply and welcome the Government's recognition that reducing the deficit depends fundamentally on continued economic growth. In yesterday's Budget, the independent Office for Budgetary Responsibility determined the revenue maximising rate for capital gains tax. Given that the top rate of income tax of 50 per cent is a deterrent to attracting talented individuals and investment to the UK, will the Minister support asking the OBR to investigate what top rate of income tax would maximise Exchequer returns?

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Baroness Wilcox: The Office for Budgetary Responsibility was established to form independent judgments on the overall shape of government finances, not to provide policy advice on different taxes. Beyond a technocratic assessment of the methodology and central assumptions of measures, including tax, the OBR has no remit on tax policy.

Lord Howarth of Newport: Will the noble Baroness explain to the House how reducing capital allowances, imposing a levy on the banks, increasing VAT and shrinking domestic economic demand at a time when demand in some of our most important export areas-notably the eurozone-is contracting, will assist the international competitiveness of UK firms?

Baroness Wilcox: I am afraid that noble Lords have heard this answer before and will hear it again. We are where we are. Given the fiscal plans that this Government inherited, I am afraid that we would put the recovery at risk if we did it any other way. Threatening higher tax and interest rates would affect not just the Government but families and businesses. The noble Lord could have answered that question himself a few months ago.

Lord Hamilton of Epsom: Does my noble friend accept that one of the reasons why productivity has fallen in this country is the enormous amounts of taxpayers' money that have been thrown at public services which have not been reformed? Following the Budget, the opposite is now true. As funds for government departments fall, productivity will go up and may even match the rises in productivity in the private sector.

Baroness Wilcox: I thank my noble friend for that, and I can only agree with him.

The Lord Bishop of Hereford: My Lords, can the Minister give an assurance that the Government will do their utmost to provide high-speed broadband in rural areas in order not to blunt the competitiveness of key development and employment in that part of our nation?

Baroness Wilcox: Yes. Legislation for this is on the way. Noble Lords must already know that we are keen and concerned to ensure that the regions are kept as up to date as everywhere else. We do not want this to be London-centric or eastern-centric; we want to make absolutely sure that rural areas, such as where I live, have as soon as possible all the infrastructure that they need.

Lord Hunt of Kings Heath: My Lords, if we are to be internationally competitive, surely we should support industries such as the nuclear energy sector, which has great potential in the UK and for exports. Why on earth have the Government withdrawn the loan to Sheffield Forgemasters? That is a disastrous decision.

Baroness Wilcox: What we as a Government want to do is make the conditions right whereby all parts of industry can grow.

Lord Cotter: My Lords-

Lord Jones of Birmingham: My Lords-

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Lord Strathclyde: My Lords, there is time for both noble Lords. Perhaps we should have the noble Lord, Lord Cotter, first, and then the noble Lord, Lord Jones.

Lord Cotter: My Lords, the Government are rightly committed to reducing bureaucracy to help competitiveness. Will the Minister look at the hurdles faced by small businesses when they try to borrow? They include new charges and fees along the line, audits, facility fees, reviews, management fees and so it goes on. These are clearly blocks in the way of the ability to borrow. Will the Minister also consider the high rate at which businesses frequently have to borrow through the banks?

Baroness Wilcox: The enterprise finance guarantee scheme has been extended and there will be a Green Paper soon in which we will be looking at all these issues.

Lord Jones of Birmingham: My Lords, our international competitiveness depends on producing a value-added, innovative economy. That calls for skilled people. Will the Minister explain how, after 11 years of full-time, compulsory and free education-which is something that 5 billion people on this planet do not have-half the young people who will take a GCSE this month will not get grade C or above in English and maths, and will therefore be unemployable?

Baroness Wilcox: The noble Lord will of course be delighted that we are bringing forward the Academies Bill and he will no doubt be supporting it. We want to ensure that British higher and further education are better linked into our economy. Our priorities include an increasing emphasis on adult education, stripping out some of the bureaucracy around further education, and putting an end to the outdated distinction between blue-collar apprenticeships and further education on the one hand and university education on the other. BIS has already redeployed £200 million from Train to Gain to fund 50,000 extra apprenticeships and an additional £50 million towards capital spending on colleges.

Lord Pearson of Rannoch: My Lords, does the noble Baroness recall the estimates made by the EU enterprise and industry commissioner, Mr Gunter Verheugen, that EU overregulation was costing us some 6.4 per cent of GDP per annum-around £84 billion today? Why do Her Majesty's Government insist on staying on the "Titanic" when the iceberg of international competition is staring us in the face?

Baroness Wilcox: The noble Lord will be very pleased to know that we have already said that we will look seriously at the gold plating that we have been doing to European Union regulations. I am sure that he will support us in that.

Railways: Crossrail


3.21 pm

Asked By Lord Faulkner of Worcester

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Lord Faulkner of Worcester: My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and declare an interest as a member of the First Great Western advisory board.

Earl Attlee: My Lords, as we made clear in the coalition agreement, the Government support Crossrail. The project will support and enable growth, now and in the future, in London and across the UK as a whole. However, we need to ensure that every pound invested in the project is well spent and that the project remains affordable. That is why Crossrail Ltd is focused on optimising value for money through effective management of risk and best-value engineering solutions.

Lord Faulkner of Worcester: My Lords, I thank the noble Earl for that Answer. I was about to congratulate him unequivocally on its content until the section that began with "but". Can he give an assurance that, in any review of Crossrail, there will be no question either of shortening the length of trains, which would lead to overcrowding almost from the day it opens, or cutting back the route from either Abbey Wood or Maidenhead?

Earl Attlee: My Lords, no decision has been made to reduce the scope of Crossrail. A key point of the Crossrail project is the length of the trains and of the platforms. To alter that would impact on the funding stream for the project.

Lord Bradshaw: I wonder whether the Minister will reflect a little more on the scope for reducing costs. We very much support the central area of Crossrail-and of Thameslink, which I used to call Thameslink 2000 and which the party opposite did very little to advance when they were in government. Will the Minister look very closely at the western extension to Crossrail? It does not provide an express service from Heathrow to the City, it does not do anything to ease overcrowding at Euston and it does not provide a satisfactory service to places such as Maidenhead, Reading and Oxford.

Earl Attlee: My Lords, the noble Lord has great experience in these matters and I will draw his comments to the attention of my ministerial colleagues.

Lord Davies of Oldham: My Lords, will the noble Lord forgive me if I look upon the word "scope" as a somewhat weasel word in this context? If he is interpreting the position as one in which the length of trains and the length of stations are not to be changed, and the range of Crossrail-the areas which it will serve-is not to be changed, where on earth are the economies to come from?

Earl Attlee: My Lords, the economies will come from best-value engineering solutions. For instance, the noble Lord will be aware that innovative engineering solutions were used for the station box at Canary Wharf station. That is a good example of where economies can be made. In 1997, Crossrail was but a faint blip on my radar. I pay tribute to noble Lords opposite for their work on Crossrail, particularly brokering the funding package and obtaining parliamentary approval for the Crossrail Act 2008. We support the project and will run with it.

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Baroness Valentine: Does the Minister therefore accept that all parties have done a very good job in supporting Crossrail thus far?

Earl Attlee: My Lords, I entirely agree with the noble Baroness. I thought that she would come in with a slightly different question which I would latch on to, but her support is much appreciated.

Lord Broers: Can the Minister predict whether British engineering companies will be building much of Crossrail?

Earl Attlee: My Lords, the answer is here somewhere in my brief. I assure the noble Lord that British industry is heavily involved in the Crossrail project. Some firms are based outside the UK but the roles are based inside the UK.

Lord Teverson: My Lords, can the Minister assure us that long-distance train services from south Wales and the south-west of England will not be disrupted during the construction of the Crossrail project?

Earl Attlee: My Lords, it will be clear that there must be some impact-I cannot say that there will be none-but the work will be carefully managed to minimise the impact on the travelling public.

Lord Haskel: The Minister spoke about cutting costs. How will he ensure that it is not a matter of cutting corners?

Earl Attlee: My Lords, it is clear that we will not cut corners. It is about finding good solutions to deliver the project to time.

NHS: Budget


3.26 pm

Asked By Lord Campbell-Savours

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, the Government have guaranteed that health spending will increase in real terms in each year of the Parliament. However, it is clear that funding growth will be constrained and, in order to meet rapidly rising demands and to realise our ambitions for improved health outcomes, substantial improvements in economy and efficiency will be required across all areas of health spending. Full plans for delivering these improvements will be developed during the spending review.

Lord Campbell-Savours: My Lords, recognising the relationship between transparency and the economic use of resources, will the Government consider amending the National Health Service pharmaceutical regulations to require manufacturers of prescribed products and appliances to indicate on the label of the packaging the tariff price of a generic product or the manufacturer's list price of a branded product? Can he refer this whole matter to the transparency unit that his Government have set up?

23 Jun 2010 : Column 1314

Earl Howe: My Lords, on an instinctive level, I completely understand the noble Lord's concerns and I can tell him that the department has looked very carefully at this whole issue. The worry, based on research, is that labelling medicines with prices has a much more complex impact on patients' attitudes towards their medicines than one might expect. A high or a low price on a medicine could lead to a patient doing the opposite of what one wants in terms of taking medication appropriately. Therefore, I am afraid that we have reached the conclusion that this is not something that should be pursued at the moment.

Lord Walton of Detchant: Does the Minister accept that for some years the National Health Service has been beset by the activities of an intolerable quangocracy? In fact, no fewer than 50 organisations have the right to inspect and assess the performance of health service bodies. In their proposed bonfire of the quangos, will the Government look first at whether it is necessary to continue with the mechanism of looking over the activities of the individual regulatory authorities? Is it necessary to continue with that supervisory body or with, for example, the National Clinical Assessment Authority? Have not these two bodies probably outlived their usefulness?

Earl Howe: My Lords, I am very much in tune with the noble Lord's general theme. As I said in the House last week, it has to make sense for us to look at each and every arm's-length body. We need to consider what it does and what it was designed to do, decide how critical those functions are and how well they are fulfilled and then decide whether we can achieve better value for money by doing things differently. I do not want to promise the noble Lord a bonfire, as I have not yet taken any decisions, but I assure him that I will be rigorous in my approach to this whole exercise.

Baroness Gardner of Parkes: My Lords, as a former chairman of a hospital trust, I know that when staff are consulted about the way in which savings can be made they come up with very constructive ideas. Could not the cumulative effect of many hospitals seeking the comments and advice of their staff lead to considerable savings and improved efficiency in running the hospitals?

Earl Howe: My noble friend makes an extremely good point. Much of the thrust of what we are trying to do is to achieve much greater local ownership by clinicians, staff and managers of the problems that we can all identify. The ideas that my noble friend has put forward already operate in many trusts, but they should be imposed more widely.

Lord Warner: My Lords, in his review will the Minister encourage his ministerial colleagues to enhance the coalition Government's reputation for taking tough decisions by looking seriously at the number of acute hospitals that are failing financially and are unsustainable, especially in London? Is he willing to market-test the provider side of PCTs, which the Department of Health has identified as inefficient?

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