The points that he made about the Middle East and energy are very valid. I also agree about the strengthening of Commonwealth ties. I support what my noble friends Lord Judd and Lord Anderson, and the noble Lord, Lord Maclennan, have said. I think that the soft-power ties of the Commonwealth are very important but that it will not act as one as a political and diplomatic force—at least, I do not see that happening very much—still less as a single economic unit. I know that the noble Lord, Lord Bilimoria, was not talking about going back to a world of imperial preference but I see very little prospect of a kind of free trade arrangement within the Commonwealth. The interesting thing about the Commonwealth is the way in which its economic interests have moved away from those of the United Kingdom. One of the most striking things about the emerging world is the growth of south/south trade, as opposed to south/north, between Commonwealth countries.
The fundamentals of what the noble Lord, Lord Howell, said, were right. Trade with the emerging world is crucial to our success in what the Prime Minister and Chancellor rather irritatingly refer to as the “global race”. However, the danger in such talk is that we convince ourselves that there is some great choice to be made between the rest of the world and Europe. As my noble friend Lord Anderson said, it is not a case of either/or—and as the noble Lord, Lord Kerr, said, it is not a case of a blue-water strategy or a continental one. There was a lot of hullabaloo recently about the fact that for the first time we were trading more with the rest of the world than with the European
single market. That is a perfectly natural development, given the pace of growth in the rest of the world. It should not become a political point.
Membership of the single market remains crucial to our ability to compete with the rest of the world because of its size, its proximity and its relative stability. It is highly integrated. The noble Lord, Lord Alderdice, and I were at a dinner last night where a Foreign Office official made the very good point on the subject of exports to China that France includes Airbus exports in its figures but 17% of each Airbus is made in the UK. We benefit from our partners’ success as well as our own.
Size matters. Being part of the EU single market gives us clout. On trade with China we worry about intellectual property challenges or the dumping of solar panels, but we try to secure fair competition and open up markets. Having that clout behind us is much better than being the United Kingdom on our own because—I think that I am right in saying this—the UK is smaller than the smallest Chinese province.
Europe matters a lot—and it matters in another sense. When the rest of the world thinks about us, it thinks about us not as Britain but as part of Europe. It thinks of Europe as an entity in the world. Britain has great strengths of its own—many noble Lords talked about them—such as the BBC, the World Service and the British Council. However, Europe, too, has strengths in this emerging world. It is regarded highly for its culture, civilisation, science and engineering. The European model is greatly respected as one in which we have achieved democracy and the rule of law, and a model of capitalism that combines innovation and dynamism with social justice. The European model is a strength for us, and in this multipolar world it will matter even more.
Lord Spicer: How long can we go on trading at a loss with Europe?
Lord Liddle: The question about our competitiveness applies not just to Europe but to the whole world. The House will debate later the excellent report of the noble Lord, Lord Heseltine, which addresses these issues. The problem is not with Europe but with UK competitiveness.
In the new world, Europe matters more, not less. Trade policy matters. There is a very ambitious EU trade agenda, as well as a transatlantic agenda and an agenda for trade with the Mercosur countries, with India and now with Japan. I would like to hear from the Minister about these possibilities. There seems to be a tremendous route to opening up more growth potential.
If we want to be an effective force, we have to put more emphasis on our European commitment. We should look at how the Chinese are buying up Africa; at how Europe has been ineffective in dealing with Russia on energy questions; at how as a continent we do not seem to be taking advantage of the opportunities of the Arab spring. Together, the European Union could do so much in these areas that it is not doing.
The biggest risk that this country faces is that we give in to the pressures for a pared-down Europe—the kind of pressures that Boris Johnson talked about
this week—and end up sleepwalking towards our exit from the European Union when it is our membership of the EU that will be our strength in this emerging world.
2.16 pm
The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Green of Hurstpierpoint): My Lords, I thank my noble friend Lord Howell of Guildford for initiating an extremely important debate that has attracted a great deal of interest. My sense is that we have covered an enormously broad range of issues. I assure the noble Lord, Lord Liddle, that although I travel a lot around the world, I hope I travel economically. I turn right, not left when I get on a plane. I do not know what the travel policy is in Brussels.
Many issues have been raised. I hope noble Lords will appreciate that if I do not succeed in responding to every one of them, I will write in respect of the issues that I do not cover. I start with the point laid out by my noble friend Lord Howell that we are in a new era. The context is worth rehearsing briefly. One could argue that there have been only two periods in human history when there was a single global superpower. One was between 1815 and 1871; the other was between 1989 and about now. We are entering a phase where there is no longer one global superpower —or indeed two—but a series of actors on the world stage.
We are also moving out of a period of history that was unusual in the wider context of human experience. For most of human history, a country’s share of global output roughly equalled its share of the world’s population. In 1800 the second largest and largest economies were those of China and India. We are moving towards a situation where that sort of balance of economic output on the world stage will be true again. We all know what happened in the mean time. The industrial revolution enabled Britain, then other European countries, then America and—after the war—Japan to move ahead and take up a far larger share of world output than their populations would support in terms of their share of the world market. That time is now receding and we have to get used to a position in the world where a number of actors on the world stage are competing with us. In that sense there is indeed a global race.
Over the past 20 years or so we have seen the opening up of China, with the extraordinary consequences that my noble friend Lord Bates sketched out for us, and substantial reform in India. It does not always seem that India’s economy is very open, but the reforms introduced in 1992 by the present Prime Minister launched it on what is now, by its earlier standards, a significant growth path. We have also seen the collapse of the Soviet Union. These three major changes brought some 3 billion people into open markets and more into the financial and economic mainstream of the world. That has now spread through other continents as well. We have seen the emergence of powerful economies in Latin America, the Middle East of course, as the supplier of hydrocarbons to so many of those emerging powers, and now Africa. It is worth reminding ourselves that six of the 10 fastest growing economies in the
world over the past five years are African. Ghana, Nigeria, Ethiopia and Mozambique are all growing at more than 8% a year.
The G20 is a key sign of this change. Global institutions are evolving in response. The G7/G8 has a role to play, but its central role in determining the economic issues of importance to the world as a whole has essentially now been taken over by the G20, which is a much better balanced grouping of nations to reflect the state of the world’s economy in the 21st century. This reflects the macroeconomic reality of today, which is that the global centre of gravity has shifted from west to east and from north to south, and that change is irrevocable.
The growth performance of China is remarkable. The numbers are extraordinary: anything times 1.3 billion looks like a very large number. It can be compared to the performance of Japan in the 1950s, 1960s and 1970s. If we look at Japanese growth rates at that time, they were not dissimilar to the extraordinary performance that we have seen in China in the past 20 years. That tells us that as countries go through the process of urbanisation, growth rates take off at a remarkable rate. This is a reminder that this transformation is only halfway through, or thereabouts. China's level of urbanisation now is at about 50%. India's is at about 30%. It will probably move up in both cases to something like 80% over the next generation.
The year 2008 marked the point at which more than half the world's population lived in cities. By 2050, that will be at least three-quarters, maybe 80%. Never before have the two largest nations of the world been urbanising at the same time and at such a pace.
All of this poses substantial challenges for us in this relatively small country. I am not sure whether we are indeed smaller than all the provinces in China, but I am sure that we are smaller than most of them. I am not sure whether “punch above our weight” is the right phrase, but at the moment we certainly have a larger share of output than our population would support. We are at about 3% to 3.5% of world output and our population is slightly less than 1% of world output. We must reconcile ourselves to the inevitable implications of that for market share over time.
We also face many other challenges, which indeed the world faces collectively. The implications of all the development that we have been referring to and the urbanisation that I have alluded to for such matters as climate change, environmental impact and claims on water resources, food and energy are all profound. Greater prosperity and a burgeoning middle class in so many of these countries do not translate straightforwardly into greater peace and harmony on the world stage.
However, this rebalancing neither can nor should be reversed. We must recognise that in the energy markets of the world we will be competing for sources of energy that are reliable, affordable and sustainable. We will have as a country to mobilise significant investment to deliver energy to the economy and to our consumers. We will have to play our part in ensuring that the world’s institutions of governance evolve in a way that makes sense in this new era that
we have been talking about. But I want to focus most of my remarks on the direct commercial challenge for the UK. I want to persuade the House that I see the commercial challenge as extremely important to us, but as one that goes inevitably and inextricably with a positive cultural engagement.
I begin with the raw matter of trade. We have had some rather disappointing statistics this morning on the trade account for last month. Overall, the Office for Budget Responsibility report yesterday showed that trade was a drag on growth in the first three quarters of this year. This is a disappointment to us and a reminder of how far we have to go. What is absolutely clear is that, as we work to rebalance our economy, trade has to play a central role. It is not in my view a matter of mercantilism: it is a matter of understanding where growth will come from on a sustainable basis in this economy.
We must engage effectively with the international markets if we are to pay our way in the 21st century and find sustainable growth. That growth has to be based, as the noble Lord, Lord Bilimoria, reminded us very importantly, on competitiveness. We have a lot of work to do on that and I believe that trade itself is an important driver of competitiveness. There is ample evidence that particularly smaller companies that get into the international markets become not marginally but quite significantly more efficient, and quite quickly too. The more that we are successful in engaging more companies in the international markets, the more we will strengthen the backbone of our own economy.
We should recognise the importance of the European Union. A number of noble Lords drew attention to the importance of the single market. It is an affluent market of 500 million people. It may not be growing significantly at the moment, but half of our exports go to the European Union. We need to remind ourselves that, if you look at incremental import demand over the next few years, Europe will produce as much incremental demand as China. I could put that point around the other way of course: China will produce as much incremental demand as will Europe over the next few years. The real point is that, as a number noble Lords stressed, this is not an either/or issue between the EU and the rest of the world or between the EU and the Commonwealth. This has to be both/and. We cannot afford to turn our backs on any of the important markets, whether the rich ones on our doorstep across the channel or the Atlantic, or the fast-growing ones further afield in Asia, the Middle East, Africa and Latin America.
We need to recognise that the emerging markets will be the main drivers of growth for the next generation. This is not a flash in the pan. People talk about the slowing down of some of the key emerging markets in the past year or so, in Brazil, India and China. But, first, the slowdown is clearly relative. Slowing down to 7.5% in the case of China is a growth rate that anyone in Europe would rejoice to have. Secondly, we should certainly not see this as an implosion. The best central forecast is that they will continue to grow significantly for the next generation because there is quite a long way to go in the transformation, urbanisation and social transformation underway there.
This is important to us for all sorts of reasons. One is that their growth paths will not be automatic. It is very clear that as these countries grow and as their middle classes develop in number and spending power, we discover that they want the same things that everyone else wants. They want air conditioners, fridges and mopeds first and then cars, fashion, overseas travel and good healthcare. The opportunities from the emergence of these countries with significant purchasing power are tremendous for international suppliers. The opportunities are there for Britain as they are there for all our obvious competitors.
As I mentioned, in terms of our own economic needs, we have no choice but to engage internationally and to do so competitively and energetically. That is why we set a challenge last year of getting 100,000 more companies into the international markets over the next few years and focusing more on the non-traditional markets for British business. The fact is that our current market share in these newer markets is disappointing. We have lost market share in virtually all of them. We have not merely lost market share to newer competitors such as China and Korea; we have lost market share to our more obvious competitors just across the Channel in the shape of Germany, France and Italy.
Specifically, we have a minimal market share in many of the 19 priority emerging markets for UK Trade and Investment—that is to say less than 2% in 12 of them. We are behind Germany, France and Italy in 12 of them and we have lost market share in 18 out of the 19. We have work to do in order to encourage and support British business into these markets.
The good news is that we have the underlying capability. I think I have mentioned this to the House before, but I repeat it because I go on rediscovering it. I travel not only around the world but around this country. In every region of the country and in every sector of the economy, you find businesses of all shapes and sizes—traditional and high-tech, old and new—that are taking on the world. They are aggressive, entrepreneurial, dynamic, growing and engaging internationally. The second piece of good news is that our brand, if I can use that phrase, stands in very high regard around the world, not only for our reputation for integrity in the way business is done—the Bribery Act is widely admired—but for the quality of the products and services that we offer. The boost provided by the Olympics to that brand is of incalculable value.
The Government need to do the best possible job of promoting this endeavour. We need to do it through active work on trade liberalisation, which takes me directly to the very constructive engagement with the Trade Commissioner in Brussels, as the Commission has the competence for the negotiation of free trade agreements. As the noble Lord, Lord Liddle, mentioned, the agreement to start discussions with Japan is important. We should not be naive about how smoothly those discussions will go or how quickly we will reach a conclusion but the obvious point is that a serious opening up of the Japanese markets, not merely in terms of tariff barriers but, almost more importantly, of non-tariff barriers, will have a huge and healthy impact on Europe as a whole and on the UK in particular. The US and the EU pushing forward next
year, if we can, on the negotiation of a transatlantic partnership will be even more significant. There is a large agenda, quite apart from the existing work on an Indian free trade agreement and with Canada, Singapore and now Morocco. In terms of looking at the impact, and showcasing, I thank the noble Lord, Lord Kerr, for drawing attention to the importance of the Korean free trade agreement.
We will keep at this. The importance of the trade agenda in Brussels cannot be overestimated; nor, as an aside, can the importance of the single market. One of the things that we have to achieve as a major member of the European Union is a full-blooded implementation of the single market, and there is clearly work to be done on that. Out of 12 dossiers currently on the table under the Single Market Act I, only one has been fully implemented. In particular, with the services directive, digital broadband and the digital single market, there is a huge terrain of activity that will bring significant benefits to the whole of the European Union, including Britain.
However, trade liberalisation, crucial though it is, is only one prong of any meaningful strategy. Trade promotion, through UK Trade & Investment, UK Export Finance and posts around the world, is critical. I note that some noble Lords have reminded us not to throw the baby out with the bathwater and that our posts have other roles to play, but I believe that nothing they do is more important than promoting British commerce in their respective markets. We need to ensure that they are trained and equipped with the right kind of people, with energy, competence and experience. We will continue to work on that.
Furthermore, trade is a major driver of economic development. Turning to the comments of the right reverend Prelate the Bishop of Worcester, I am pleased to be able to report that we have reaffirmed the 0.7% of GNP target and indeed have committed ourselves to getting there next year—the first G8 country to do so. Within the commitment on development finance, I draw particular attention to trade facilitation, in which we now invest about £1 billion a year. The gains from effective trade facilitation, particularly in the continent of Africa, will be very significant indeed to the Africans—which is of course a great good in its own right—but also have resonances for opportunities for British businesses. We will continue to be very active in trade facilitation through the work of the Department for International Development.
There is one other crucial point. However well the Government do trade facilitation and trade promotion work among British businesses, and however well we prosecute the case in Brussels for open trading relationships between the EU and the rest of the world, it is very important that there is lively, active support for businesses both here and overseas. The House will be having a short debate later, introduced by the noble Lord, Lord Heseltine, on his report. I am working with chambers of commerce around the international markets to upgrade the support that we provide for businesses, particularly incoming smaller businesses into these markets. There is also a good deal of work to do domestically. As we would all recognise, the quality of business support for business
is very varied around the country, and is certainly very varied around the world. This is a major agenda item for the next number of months.
Finally—I apologise that I am coming under some time pressure—I stress the importance not only of trade but, in that context also, of what we have variously called moral authority or soft power. A number of noble Lords have drawn attention in particular to the importance of education. I strongly believe in the importance of education, both as a significant earner in its own right but, equally importantly, as an indirect supporter of British relationships for generations. If you get that right, at the right stage of people’s lives, you build relationships that last a lifetime with people who become the leaders in their societies. We have a great story to tell in many respects with strong universities—and a strong higher education sector in general—many of which are actively engaging around the world. I note, as one example, the work of the Open University in Vietnam and also fully endorse the comments made by more than one noble Lord about the importance to British students of the internationalisation of our domestic higher education offering. That is a strength that is very hard to put any meaningful value on.
The whole House will be aware that student visas are part of a wider issue where there is a difficult circle to square. We have a commitment to reduce the amount of net migration into the country but we want to remain open for business. I believe we have a good story to tell on inter-company transfers and entrepreneurial visas. It is worth noting that there is no limit on student visas for those that pass the tests, including the English-language test, and where the institution is a sponsoring institution. We are looking at the way student numbers, and ins and outs, are monitored. If I may, I will write to noble Lords with more details on that.
I stress that we have a warm welcome around the world. Soft power is very much about education, the role of the British Council and the role of the BBC. It is also about well recognised brands and is, as I mentioned earlier, about the Olympics. Which other country in the world could have made fun of itself, in a gentle way, on the opening night ceremony by having Rowan Atkinson send up “Chariots of Fire” and by having Her Majesty the Queen accompanied into the Olympic Stadium by James Bond? I can promise the House that this was noted and appreciated all around the world. We have a great brand to build on but have a lot of work to do. Finally, I thank my noble friend Lord Howell for such an important and interesting debate.
2.38 pm
Lord Howell of Guildford: My Lords, it remains for me to thank your Lordships for your kind remarks and my noble friend Lord Green for his excellent and realistic summing up. We have had one Kipling quotation so I will just end with another:
“Let us admit it fairly, as a business people should”,
that over the past five years of financial crisis,
“We have had no end of a lesson”.
Let us hope that over the next few years,
“it will do us no end of good”.
Ugandan Asians
Motion to Take Note
2.40 pm
That this House takes note of the contribution made by the Ugandan Asian community in the United Kingdom on the occasion of the 40th anniversary of their expulsion from Uganda.
Lord Popat: My Lords, it is an honour and a privilege to move the Motion standing in my name on the Order Paper. This debate means a great deal to me and my fellow Ugandan Asians, and I am very grateful to the powers that be for granting government time for this debate.
In 1997, on the 25th anniversary of the expulsion, the great businessman Manubhai Madhvani—sadly now departed—said of the Ugandan Asians:
“We came here 25 years ago full of anxiety to an unknown land. The British people extended a welcoming hand enabling us to make this country our home. Very few people tend to say thank you. We intend to be different”.
This debate gives me a chance, on behalf of so many, to say thank you.
This story begins long before the expulsion in 1972. Indians started moving to east Africa in large numbers in the 18th and 19th centuries to build railways on behalf of the British, and others followed. Some of them became very successful entrepreneurs and established themselves among the business elite. One company alone, the Madhvani Group, accounted for 12% of Uganda’s national output, and many other firms excelled. Uganda was granted independence in 1962, and the Ugandan Asians set about working with the Government to build the economy further, including constructing schools and hospitals. Yet, as we all know, things did not progress smoothly.
I remember the rise of Idi Amin particularly well. On 25 January 1971, I was at Entebbe International Airport as my sister was due to travel to Britain for her studies. At the stroke of midnight, confusion spread as the army moved in and seized control of the airport. The flight was cancelled, and at three in the morning we were asked to vacate the airport. The 21-mile journey from Entebbe to Kampala was the longest of my life. The radio told us of the coup, and I will never forget the harrowing sight of bodies scattered along the roads. Relations between the Ugandan Asians and the new regime continued to sour. Many of us, including myself, knew that our time was up and left before we were pushed.
During Uganda’s independence, Ugandan Asians had been given British protected passports, and in May 1971 my father sent me here to Britain as a student. Others who stayed were not so lucky. On 4 August 1972, Idi Amin announced that he had had a dream in which God had told him to expel the Asians, and he issued a decree ordering almost all Asians—some 60,000 of them—to leave. At the hands of this brutal
dictator, who murdered and tortured hundreds of thousands of people, these 60,000 people were forced to leave behind everything but the clothes on their backs. They were brutally evicted and given only three months to leave.
The expulsion led to a global game of political football. India made it clear that the 60,000 were Britain’s responsibility. Kenya closed its borders to them. Advertisements in Leicester warned us not to go there as there was no housing and no jobs. Friends and family ended up far afield in Canada, India, the US and many other places. Yet the then Conservative Prime Minister, Edward Heath, and his Government rose above the rhetoric of Enoch Powell and others and demonstrated the compassion that I have come to associate with Britain. He ruled that Britain had a legal and moral responsibility to take in those with British passports.
Over 28,000 homeless and scared refugees arrived between August and November at Stansted Airport. In an age when flights are now so regular, it is difficult to appreciate how organised the British were to ferry 28,000 people across two continents in 90 days. It was a great testament to those involved and to British organisation that the operation went so smoothly. Those arriving were greeted at Stansted by a large number of charitable and voluntary organisations, which gave them food and shelter. The then Home Secretary, Robert Carr, established the Uganda Resettlement Board, and 16 temporary camps were set up across the country on old military bases. The resettlement committee did fantastic work and we are very grateful to them, including Praful Patel, who was the sole Asian member of the board.
It was a very difficult time for those who came across. Many of us encountered racial tensions, jobs were not always plentiful, and life was very difficult initially. My great friend and colleague in the other place and fellow Ugandan Asian, Shailesh Vara, has said in the past of the Ugandan Asians:
“Rather than looking at their expulsion as life-destroying, they saw it as a setback. They didn’t stay downcast, got up, and started over again”;
and start over again we did. The Ugandan Asians have helped to transform the fabric of British society, and the children and grandchildren of those who came across are now excelling in so many fields. Today in Britain, Ugandan Asians play a sizeable role in the national economy. While exact figures are not easily available for the impact of this one community, Britons with south Asian roots today make up 2.5% of the population but account for 10% of our national output. The number of Ugandan Asians on the rich list is also sizeable. The influence of the Ugandan Asians has also spread to British politics. Within this House we have four Ugandan Asians—the noble Baroness, Lady Vadera, the noble Lord, Lord Sheikh, and myself, as well as the most reverend Primate the Archbishop of York; and in the other place we also have Shailesh Vara.
Perhaps our most notable achievement has been to come to the nation of shopkeepers and transform the shopping experience for British consumers. When we arrived, shops shut at 5pm on weekdays and were
closed on weekends. It was the Ugandan Asians who introduced late night shopping and Sunday openings. Within the Ugandan Asian community, and east African Asians in general, we have a large number of eminent doctors and surgeons, and I am proud to say that members of our community are serving today in the Armed Forces and the police.
Our community is often at the top of the education league tables, and we have a new generation of British-born children who are excelling. A large percentage of our children study at Russell Group universities, and many of our British-born youngsters are now reaching the higher tiers of their professions, perhaps most notably in the City.
The Ugandan Asians in Britain are philanthropic; always giving back to the society that has given so much to them. I was very proud this year to see our community celebrating Her Majesty the Queen's Diamond Jubilee and to hear of so many Ugandan Asians giving up time to volunteer for the Olympic and Paralympic Games.
In a moment, I wish to reflect on why I feel we have been so successful in Britain. First I want to reflect on, and praise Uganda for, the journey that she has been on since we left. I returned to Uganda earlier this year as a member of our delegation for the Inter-Parliamentary Union assembly in Kampala. I was staggered by the progress made in 40 years in so many fields. It is remarkable that a country Winston Churchill once referred to as the “Pearl of Africa”, that went through Idi Amin's dictatorship and a brutal civil war in its first 25 years of independence, is now such a friendly and outward-facing country.
Unfortunately, the Ugandan economy under Idi Amin fell apart; yet Britain and Uganda now do almost £150 million of bilateral trade every year—a number that I am confident can grow substantially. I am delighted that the Ugandan high commissioner has been able to join us today. Her Majesty the Queen, who is and always will remain a great inspiration to the Ugandan Asians, visited Uganda in 2007, and organisations such as the Commonwealth Parliamentary Association and the Inter-Parliamentary Union continue to support the building of democracy there.
So much of this improvement is down to President Museveni, who in 1997, to commemorate the 25th anniversary of our expulsion, came to Neasden Temple and invited back those who had been forced to leave in 1972. This brought closure to so many of my friends, and a small few even chose to return. Today in Uganda, the Madhvani Group is once again the largest private sector enterprise, showing how time really can be a great healer.
So why have the Ugandan Asians been so successful in Britain? The answer, I believe, lies in our values. Ugandan Asians have always believed in aspiration, enterprise and the importance of family—three of the values that Britain holds most dear. We have also come to understand the importance of hard work and education, which are things that we have learnt here rather than imported with us. We believe in self-reliance yet understand, perhaps because of our ordeals, the need for a strong community and to support those most in need. Yet we are also fiercely patriotic. We
believe in Britain: its values, its tradition and its ability to act as a beacon on the international stage. We are proud to be British; we are the embodiment of people who have found a home that we love and where we belong.
Our values mirror those of the society around us. We have integrated into British society and adopted many new customs along the way, but we have managed to combine the maintaining of elements of our roots and heritage while ensuring that we are British through and through. As a community, we owe a great deal to the Jewish population and to the Board of Deputies of British Jews for helping us to develop. In researching for this debate, I came across an article from the Chief Rabbi, the noble Lord, Lord Sacks, in which he said:
“Many Jews of my parents’ generation owed their lives to this country. It took them in when they faced persecution elsewhere. They loved Britain and deeply internalized its values”.
The parallels with my own community are, to me, obvious.
So often, our national debate on immigration comes down to numerical details. I would argue that integration is a more important element. If you are willing to work hard, learn the language and give back to this great nation, most people do not mind about your skin colour or where you come from. My noble friend Lord Tebbit, who sadly could not join us today, wrote to me ahead of this debate. He originally opposed the arrival of the Ugandan Asians but said in his letter:
“It is clear that the Ugandan Asian community has become integrated into Britain and upholds British values and standards”.
“made a remarkable contribution to our economy and the Chancellor’s tax revenues and a below average call on his expenditure”.
We do not want a multicultural society in which different communities and religions are encouraged to live separate lives under different social structures. That form of multiculturalism is not how we build a strong and stable nation. In the same article, the Chief Rabbi concludes:
“Without shared values and a sense of collective identity, no society can sustain itself for long”.
I could not agree more. Britain is a different place from the one that I arrived in. It is more tolerant of ethnic minorities and the glass ceiling that prevented their rise in many professions has, I believe, been smashed. It is not difficult to imagine Britain continuing to become a more ethnically diverse place and, as long as we can maintain the values that have made Britain great, this is not a cause for concern.
The tale of Ugandan Asians in Britain is one that makes me proud, particularly when I see how much the new generation of British Indians has excelled. In 40 years, we have come far and I hope that our community continues to pay Britain back for what she has given us. At the launch of the Conservative Friends of India in April of this year, the Prime Minister said:
“The East African Indians have been one of the most successful groups of immigrants to any country anywhere in history”,
“give so much to this incredible country”.
The element I am most proud of is how we have integrated into British society and become a values-led community. The expulsion was difficult on so many levels and we cannot forget those who lost their lives, but we are a strong community and better people because of the challenge we had to overcome.
On the 40th anniversary of our expulsion from Uganda, I wish to conclude by saying thank you to everyone who has helped to make Britain our home: to the volunteers who met us at the airport; to Ted Heath and his Cabinet, who took such a courageous political decision; to Her Majesty the Queen, who has been inspirational; and to the hundreds of thousands of people who have helped us to develop as a community. Thank you. We are so incredibly grateful.
2.54 pm
Lord Parekh: My Lords, I thank the noble Lord, Lord Popat, for securing this debate. He is himself an excellent example of the subject of our discussion. He came to this country traumatised and penniless, and is now a successful businessman and a member of your Lordships’ House. Over the centuries, Britain has welcomed and given a home to many persecuted minorities. It is striking that Ugandan Asians have come to occupy a special place in our national narrative. Indeed, they have become a term of art for referring to all east African Asians. That has to do with the way in which the Ugandan Asians came and settled, and the way in which British society responded to them.
There were about 75,000 Asians in Uganda, constituting about 1% of the population. Around 35,000 of them had British passports. They became a target of hostility and tribal politics and were subjected to expropriation and brutality. About 8,000 families, numbering about 28,000 people, arrived in Britain over a period of 90 days. It is important to bear in mind that, unlike the way in which we have dithered about responding to Kenyan Asians, Britain welcomed them, honoured their British passports and made provisions for their settlement. Enoch Powell moved a motion at the Conservative Party conference condemning government policy but the Young Conservatives and the Federation of Conservative Students saw to it that the motion was defeated by 1,721 votes to 736.
The Heath Government were unbending; not only that, they gave leadership to British public opinion. It is very striking that this was more or less the first time since the Second World War that ordinary British people had offered their homes and hospitality to people whom they had never seen, as they did with the Ugandan Asians. In the first three months, 2,000 private individuals had offered their homes, and within about a year that figure had risen to 5,000. Among them, several political and religious leaders had offered their homes. I gather that one Member of this House whom I know quite well—the noble Baroness, Lady Bottomley—and her husband Peter Bottomley were among those who offered their home to a Ugandan Asian family.
Of course, there were cases where some local authorities panicked, not being quite sure what was in store for them. The fine city of Leicester was one of them; it put a notice in a Ugandan newspaper saying, “Please
do not come here”. To its credit, it must be remembered that that notice—I have a copy of the advertisement—referred to the fact that they should not come, as advised by the Uganda Resettlement Board—in other words, the decision was taken by the URB, not by the city of Leicester on its own. The city acted in that way because it was not quite sure how many of the 75,000 people would be going there or what the central Government’s policy would be. It was only a few months later that central Government introduced Section 11 of the Local Government Act 1966. To its great credit, Leicester—in spite of that advertisement, which in a historical context is fully understandable—welcomed them and provided them with a home where they could flourish. That was Britain at its best, and it goes to show how immigration, if wisely handled, can become a source of great public support and strength.
To their credit, the Ugandan Asians reciprocated in the same spirit of gratitude and self-help. Many of them refused to accept the help that the Government were extending to them, while some who accepted financial help returned it. Within 15 years, all 28,300 of the Ugandan Asians who had come here had settled down. Never before in British history has a persecuted group established itself so well in such a short time, without recourse to public resources. That is a wonderful example to all minorities and that is the Ugandan Asians’ first contribution—one to be measured not in terms of their monetary and professional contribution but in terms of the historical example that they have set to other minorities.
The second contribution is no less important. I hope you will forgive me if I concentrate on non-tangible aspects of their contribution; after all, I am a philosopher by training. This contribution has to do with the fact that in spite of being persecuted and harassed, they did not bear a grudge against the Ugandan Government. They did not become an anti-Ugandan lobby, as they could have easily done. They blamed Amin but not the country and its people. As the noble Lord, Lord Popat said, they took great pride in returning to the country from time to time. That spirit of forgiveness and reconciliation is their second great contribution.
While many Ugandan Asians came to Britain, some of them went to Canada, Australia, the United States and even India. Family members were scattered all over the world and formed a vibrant trans-national network. As a result, there is hardly a Ugandan Asian family that does not have one branch in Canada, one in the United States and one in India. This not only makes them a transnational network; it also gives them a unique global and cosmopolitan consciousness. That is the third great contribution: a way of looking at the world that is grounded in global interconnectedness.
The fourth great contribution of the Ugandan Asians is at the level of culture. They have built temples and community centres. Sadly, not many noble Lords can read or write the language, but many of them have written wonderful short stories and poetry in their language, which also happens to be my language—namely, Guajarati. In fact, they are the only minority I know who have produced a rich, vibrant literature on their experiences in Uganda and in Britain.
They have also profoundly transformed our shopping culture, living on top of the shop, opening until late and serving exotic items, with all family members joining in to look after the shop, ranging from the grandfather to the grandchild of seven. They provide a kind of shelter—a lively, vibrant place—in inner cities.
They have also thrown up a prosperous middle class, giving the utmost importance to the education of their children. It is very striking that their children tend to be high achievers at GCSE and A-level; many of them are finding their way into some of our great universities.
The third generation of Ugandan Asians—and they are what we are now talking about—has continued this trend. Ugandan Asians, in short, are continuing to make an invaluable contribution and to provide a great pool of commercial and professional talent. I join the rest of your Lordships in saluting this country and in welcoming and celebrating the contributions made by Ugandan Asians to this country.
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Lord Steel of Aikwood: I congratulate the noble Lord, Lord Popat, on introducing this debate today and warmly thank him. I have to begin with an apology, because when I put my name down, I thought the debate was going to start at 2 pm and I have to attend an engagement in my former constituency this evening over snow-covered roads. I hope the Front Benches will acquit me of discourtesy for not being here at the wind-up and transgressing the Companion in that way.
I did not want to withdraw my name because of my own personal background in this matter. My father was a minister of the Church of Scotland, ministering for eight years to the Scots population in Kenya and Uganda officially, and Tanganyika unofficially. As a boy, I drove with him on his preaching tours during the school holidays throughout those three territories. I have used every excuse and opportunity to go back and visit those places whenever I can, and I will be again during the February Recess.
The problem for the Asians in east Africa started not in Uganda but in Kenya, with the Africanisation programme of the Kenyatta Government. At that point, the Asian population of Kenya was less than 2% of the whole. They had come there from 1895 onwards to build the railway and develop a considerable role in trading in the colony. Sadly, in 1967-68, when they started to come to Britain because of the Africanisation programme, there was a great controversy in this country about what should be done about it—against the wishes of people like Iain Macleod and Hugh Fraser, who had been the Ministers responsible at the time of independence of these territories. They had given the Asian—in fact, the whole expatriate—population two years in which to opt either for local citizenship or to retain British citizenship. Many had retained British citizenship, but the Government of the day decided to introduce the Commonwealth Immigrants Act 1968, which withdrew that fundamental right of entry into this country. It was something to which we in the Liberal Party at that time were very much opposed, and I was very proud of my party that we divided the
House of Commons against the Second Reading of that Bill. We only had 10 Members at that time, but we attracted 62 others from the major parties into the Lobby in protest against that decision. Interestingly enough, I looked up what the vote was in this Chamber, and it was much closer. With the influence of the Bishops and other sensible people, the vote in favour of the Bill was carried narrowly by 109 votes to 85, which shows again how this Chamber was perhaps rather more principled than that of the Commons.
Anyway, I wrote a book about it at the time and that much neglected work I discovered in the Library here cost £2 at the time. I could not find my own copy, so I went on to Amazon and I found that I could get one for £44. I wish that everything I have done had risen at the same rate. That is slightly irrelevant, because the impact of that Act clearly had to be withdrawn when Idi Amin’s Government in Uganda started to expel the British population by force. In 1971, I went on a visit to Kampala to meet a member of Idi Amin’s Government who had been at university with me in Edinburgh; later I had to flee the country. The British high commission was not very happy to have a Member of Parliament on its hands, and insisted that I be driven back to Entebbe Airport for 21 miles—to which the noble Lord, Lord Popat, referred—in the daylight, getting there at 6 pm, when the plane from Nairobi was coming through at midnight. For six hours, I sat in the airport, accompanied by the noble Lord, Lord Kirkwood, who at that time was my assistant. We watched the exodus of the Asians: we watched their baggage being looted and dumped on the tarmac; we watched their jewellery and watches being taken off them. I wrote at the time:
“I have never witnessed such scenes of unbridled abusive power and virtual anarchy”.
I will be brief because I am not able to stay. Winston Churchill visited the colonies in 1908; he was Under-Secretary of State for the Colonies at the time. He wrote:
“It is the Indian trader who, penetrating and maintaining himself in all sorts of places to which no white man would go, or in which no white man could earn a living, has more than anyone else developed the early beginnings of trade and opened up the first slender means of communication. It was by Indian labour that the one vital railway on which everything else depends was constructed. It is the Indian banker who supplies perhaps the largest part of the capital yet available for business and enterprise, and to whom the white settlers have not hesitated to recur for financial aid”.
That was written in 1908 and it was that spirit of enterprise and adventure that these people brought so commendably to this country, and for which we thank them.
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Lord Singh of Wimbledon: It is a pleasure to follow the noble Lord, Lord Steel, who has done so much over the years to assist not only the Ugandan Asians but many others on these shores. I, too, would like to thank the noble Lord, Lord Popat, for securing this important debate celebrating the tremendous contribution of Ugandan Asians to the life of this country following their expulsion from Uganda by Idi Amin 40 years ago.
Looking back to the time of the expulsion, I recall the arrival of disorientated people with little more than the clothes they were wearing. I was struck by both the resilience of the Ugandan Asians and the extraordinary generosity of the British people. There were some noisy, ill informed protests against the decision of Edward Heath’s Government to welcome bewildered refugees who, in some cases, had been thrown out of the land of their birth. Edward Heath rightly earned the lasting gratitude of Ugandan Asians, and his humanitarian stance was, as we have heard, widely supported by many others.
Following the end of the First World War, immigrants from India, mainly Gujarat and Punjab, were encouraged to bring their enterprise and skills to newly developing British east Africa—to Kenya, Uganda and Tanganyika. Life was tough, and they endured many hardships. My father was a medical officer there for some years, and he would tell us about the difficulties the early pioneers had in establishing themselves in a new country. Over the years, they gradually became the industrial and commercial backbone of the country, with their own schools, places of worship, clubs and community centres. Then, suddenly confronted with Idi Amin’s cruel and erratic behaviour, they were forced to leave their settled life behind and seek a new future in Britain.
Well educated and previously reasonably wealthy people had to leave their homes, assets and African friends for the uncertainty of life in a new country. Some spent a brief period in resettlement camps and from there sought cheap, crowded accommodation and worked all hours of the day to feed themselves and their families. However, their extraordinary resilience and spirit of enterprise stayed with them. They worked long hours running corner shops or in low-paid employment. By dint of hard work, some slowly moved into the food and clothing warehouse businesses.
Others, as we know, moved into wider branches of industry and commerce, bringing trade and adding value to the country that had given them refuge in their hour of need. The same spirit of enterprise soon took them and their children into medicine, law and other professions. I remember a young lad in a local corner shop who used to do his homework in between serving customers; today, he is a university professor.
Noble Lords have heard of some of the individual achievements and successes, and I want to focus on another very important achievement that has lessons for us all today. One of the criticisms of immigrant communities is that they are sometimes reluctant to integrate into the life and norms of their adopted country, instead leading parallel lives in what are sometimes termed ghettoes. It is a two-way thing. On the one side, some immigrants tend to fear the hostility of others and therefore keep together. Unfortunately this itself increases suspicion, and sometimes a measure of actual hostility, in the host population. We see a little of this today in some parts of Yorkshire, where even those born here sometimes seem to lead separate lives. None of this applies to those who came here from Uganda 40 years ago. Many in Britain understood and sympathised with their plight, and the new arrivals enthusiastically adapted
to their new environment where they have since gone on to reach the highest level in local and national government, including a much valued presence in your Lordships’ House.
As I said, successful integration is a two-way process, and I want to end by paying tribute to the British people for their kindness and generosity in welcoming Asians forced out of Uganda. It is truly a remarkable success story which has important lessons for us today in a world of increasing movement of populations and cultures.
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Lord Cormack: My Lords, it is a great pleasure once again to follow the noble Lord, Lord Singh. I did so a few weeks ago. I speak in this debate for two reasons. The first is that towards the end of March last year, I sat by my noble friend Lord Popat shortly before he made his maiden speech. There was an exchange on the Floor of the House on prayers. I shall never forget it because he said to me, “I can’t say anything because I haven’t made my maiden speech”—and, of course, he could not—“Could you let it be known that those of us who are not Christians but are of other faiths attach great importance to the established church in this country and to the ritual of daily prayers in this Chamber?”. I was very moved by that, and I did indeed quote my noble friend and make those points on the Floor of this House. I was moved by it because it was indicative, in a few sentences, of what the noble Lord, Lord Singh, has just said: the way in which this community has become part of Britain in every possible sense. My noble friend, in his admirable opening speech, made that very plain.
My second reason for wanting to say a few words in this debate is that I was elected to the House of Commons in 1970. I was one of the Conservatives who helped to create the majority for Edward Heath by defeating the late Lady Lee—Jennie Lee, as she then was—in the Cannock constituency. I represented a seat that was adjacent to Wolverhampton. I am proud to say that I was until his dying day a great friend of Enoch Powell. Indeed, I had the privilege of giving the address at his funeral. He was not right on everything but then, nor is anyone else.
I was proud to be in the House of Commons when the Conservative Prime Minister said, “This is our duty. There can be no equivocation. These are British subjects with British passports. They are being expelled from their country which in many cases is the land of their birth. They are entitled to come here and they will be welcome here”. I was one of those Conservative Members who was proud to support a Prime Minister who was doing what was right. Although it was not desperately convenient and there was very understandable concern at the numbers of immigrants coming into this country, here was a special category—a group who did not deserve to suffer from that 1968 Bill of which my noble friend Lord Steel of Aikwood spoke so movingly a few moments ago.
They came here and we all know what has happened since. They integrated into our country. They infused a new life into the economy in many parts of the land. They worked. They prospered. They learnt how to
adapt to and adopt British ways. They are a remarkable example to which only one other community can perhaps be compared. They have already been referred to—the Jews who came here, not necessarily expelled, but forced to flee the tyranny of Nazi Germany before the war.
As a very young Member of Parliament I was already aware of what it was like to live in a country where, because of your colour or your religion, you were persecuted. In this context I am delighted that I am to be followed in this debate by my friend—and I use the word very advisedly—the noble Lord, Lord Janner of Braunstone. He and I in 1970—another founder member, the noble Lord, Lord Dykes, is also here—helped to found the Campaign for the Release of Soviet Jewry. They were people in Soviet Russia who were not allowed to worship or to live normal lives but for whom there was an opportunity, if they could get a visa, to get out of the country. The noble Lords, Lord Janner and Lord Dykes, and I and others—I think of our friend Sir Ivan Lawrence who was a Member of Parliament at that time and was part of our group—worked very hard to draw attention to their plight.
That was the underlying reason why, in many ways, I felt that it would be utterly inconsistent and totally wrong, working as we were on that front, to do anything other than give the most unequivocal support to Edward Heath in the difficult but principled stand he took when it came to the Ugandan Asians. Although he is far too modest to say this, my noble friend Lord Popat is a living example of the rightness of that decision. He came to this country, put much into it, prospered as a result—I am delighted to say—and is a valued Member of your Lordships’ House. What greater example can there be of progress from exile—a member of a repudiated and expelled community obtaining a position of leadership and influence in his adopted country, of which he is rightly and so movingly proud?
Over the years, all of us in politics make many, many mistakes. We are all guilty of missing opportunities but in this case the British Government of the day held fast to that which was good. They did not render evil for evil but said “Welcome” and, as a result, they have been richly rewarded. I should like to conclude by echoing the words of my noble friend Lord Steel of Aikwood. It is very splendid that my noble friend Lord Popat has said thank you to this country but we owe a big thank you to him and to his community for all they have done.
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Lord Janner of Braunstone: My Lords, I thank the noble Lord, Lord Cormack, especially for his kind words about me and about the Jewish community, of which am part. I praise my noble friend Lord Popat on this remarkable and important debate on the occasion of the 40th anniversary of the exile of the Ugandan Asian community from their home by Idi Amin. My noble friend was right that there are similarities between his community and my Jewish family who were immigrants. I also thank the noble Lord, Lord Cormack, for his very kind words. He has long been a friend of mine and I only regret that he sits on the wrong side of the House.
I remember all of this so well and I am delighted to share my memories with the House today and to speak of my experience with the unique and wonderful Ugandan Asian community from 1970, when I had just become an MP for part of Leicester. We could ask why the Ugandan Asian community chose Leicester. The first immigrants went to the city by chance and the rest by recommendation. My Jewish family had fled intolerance and discrimination, and had moved to Britain, as did many Asian families who moved to live with their relations who had already settled in Leicester.
In 1972, in the Ugandan capital of Kampala, an advert in its local newspaper declared that Leicester was full up and that emigrating Asians should look for somewhere else. However, just like all other communities, the Asian immigrants were intelligent people and the families already in Leicester contacted other family members in Uganda to make sure that they hurried up and moved before it was too late. In that year, an even larger influx from Uganda arrived in Leicester.
Sadly, as you would expect, as proud as I was of Leicester—I still am—for welcoming the diverse communities, they were not accepted by everyone. The local National Front and other fascist organisations encouraged more “white” people to join their campaign to fight against the immigration. Thanks to the Leicester Mercury, the local newspaper which is still running today, and the local police, we kept the fascists at bay. In 1977, I won the next election, but I only just made it.
One of my most unique and touching experiences was when I first met the Asian community at a meeting in Leicester. A mix of Ugandan and Indian people attended this meeting. Having spoken to Apa Pant, the Indian High Commissioner at the time, I stood up and declared with passion how I wanted to help their community, and how happy I was that they were bringing diversity and new culture to Leicester.
Immediately, a young man wearing traditional Indian dress stood up. He said: “Mr Janner, you have no right to lecture us on how we should live. You do not understand the problems we face. You have never been spat at because you are a different colour. You have never been cursed on a bus or sworn at because of your accent. Go away, Mr Janner”. He sat down and the room was absolutely silent.
I replied, “You are wrong, sir. I am a Jew and half my family were murdered by racists; destroyed because of their race. Sadly, I am an expert on discrimination. I know far too much about it. We must work together to fight racism. We have the same enemies. We have the same friends. We have many of the same ideas”. From that moment, my relationship with the Asian community blossomed and developed from respect to friendship.
The Ugandan Asian community has brought so much to this country. Its determination to survive and to create a home in Britain is evident. It helped to save Leicester’s economy by bringing in new ideas. It built up wholesale and retail sectors. Today, Leicester is one of the first non-white majority cities in Britain. It is a truly remarkable place where communities of different
races and backgrounds work together. I am delighted to have worked for Leicester and I still remain a supporter of that wonderful city.
We can look around this House and see the diverse Asian communities, who are first, second, third, or even fourth generation and who have contributed to our country. We all should praise my noble friend Lord Popat, who moved from Uganda after being exiled because of his own race. At the young age of 17, he put himself through night school. During his career he has worked to advocate community cohesion between different faiths. He became a brilliant businessman and, sadly, he joined the Conservative party—the wrong party. He is the first Gujarati Member of the House of Lords and he stands in this Chamber with many other distinguished Asian Members. It is truly remarkable and so is he.
For me, the key to acceptance and to sensible immigration can be summed up in one word—integration. You retain your pride in your culture, customs, religions and traditions but you adapt to the place where you have chosen to live. Integration takes time. Over the past 40 years, the Ugandan Asian community in Britain has demonstrated how it can keep its individuality but also identify itself as part of our country. Our friend is the leader.
We congratulate here today our Ugandan Asian community on its contribution to our country. Here in Britain, we must always recognise and celebrate our true diversity, and continue to ensure that we work with all minorities in our very fine country to keep Britain a unique place in which to live.
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Lord Dykes: My Lords, the fact that I am following the excellent speech of the noble Lord, Lord Janner of Braunstone, gives me the opportunity to say that some years after we had the great dramas which centred not only on Leicester, but on the London Borough of Harrow, where I was a Member of Parliament—in those days in the Conservative cause—we had the great privilege, right in the centre of the borough in Harrow, of celebrating the 50th anniversary of the second and third exodus of the Kindertransport children coming to the railway stations in London. They had been saved and rescued and taken to various parts of the country, and been given good, kind homes where they were welcomed as Jewish children fleeing from Nazi tyranny. I had, of course, to remind them that British Rail had asked me to pass on a message saying that there was still a bill outstanding for 950 scones, 475 cups of tea, 725 cups of coffee and could someone eventually pay the bill, which, with interest would be about £19,000? I did not bother with that.
I was very proud of the fact that Harrow, my borough, where I was the MP for one of the two constituencies, represented the multiethnic, multiracial, multicommunity philosophy that had already begun. We had a very substantial Jewish community of various groups, kinds and origins, as the noble Lord, Lord Janner, will know—he came to Harrow quite often I think. In an informal, colloquial sense I was honorary member of at least four synagogues and I went to synagogue as much as I went to church, which I was
very proud of, and I always enjoyed them, even if the service was a bit longer than the Christian one. It was a great joy for us to welcome them and to remember what that meant for people.
Harrow had other groups as well. We had 190 Ismailis centred in a complex of about five different roads, with their pictures of the Aga Khan on the mantelpiece and so on, and I kept in close touch with them. In 1970, when I was first elected, having been very close to Edward Heath as his campaign assistant for the general election in 1964 and a candidate in 1966, he by then having become leader of the party, it was rather difficult for the local Conservative Association to say no to me when I was presented as possible choice of candidate and so I fought Tottenham. The courage he showed was immense. He was not always an easy person to work with—I hasten to add that I worked at a very humble level and he was the famous Prime Minister by then—but when I was elected in Harrow he had not forgotten that Enoch Powell had issued his venomous remarks on several occasions just before that election.
We tried to take action in Harrow because it was such a sensitive subject, with our multiethnic groups and so on. Edward Heath, with his characteristic dark, gothic humour said, “Now that you have become an MP I want to punish you by making you a PPS at the Ministry of Defence, dealing with all the Ministers, but in the mean time we are also going to do something else”—this was slightly later—“we are going to make Harrow a red-star zone for receiving Ugandan Asian refugees”. We therefore promulgated this locally.
Noble Lords can imagine that the scenes were a bit stormy in some of the local political groupings. In my own association there were some indigenous characters from the original community who were not so keen on this, but we insisted and Edward Heath, with great courage, and Alec Douglas-Home as well as other members of the Government ensured that legislation was passed, as referred to by the noble Lord, Lord Cormack. I thank him for his remarks. We insisted on that and we never looked back from the original reception when two sets of families, I think, came in. I am not exaggerating when I say that the borough of Harrow was already a dynamic area, thanks to the local MP—that is exaggerating, of course—and a very successful business area in terms of the people who resided there, but the philosophy, ethics and business acumen of the borough was transformed not only by the original Jewish communities whose members were resident there and sometimes working there, but by the arrival of the Ugandan Asians.
It had an extraordinary, tangible effect over a few years. The borough was transformed; it was electrified into becoming an interesting, riveting place, not only because the local corner shop stayed open until midnight or even 1am, but for all the other contributions that this remarkable community has made. Some time after, doing my rounds as the Conservative MP for Harrow East in our main residential area of Stanmore where we had our most important ward committee, I noticed the arrival of a very distinguished, very courteous, very polite young Ugandan Asian gentleman who slightly later became the ward chairman. I am referring, of course, to Dolar Popat; now the noble Lord,
Lord Popat, of Harrow. That has given me, just as a personal example, a wonderful picture of the success of what this community has done for this country and what it meant for them to be saved, along with their families, children of all ages and older people, too. They have made such a contribution, which is unbelievable for a community that is quite small in comparison with other influxes over the decades. So we say thank you to them for what they have done.
As the noble Lord, Lord Popat, said, it is a matter of great delight that a reconciliation subsequently occurred, with Uganda becoming a totally different country. I am glad to see that the Ugandan Government are represented in the public seats today. That, too, means a lot to us. I often feel that historically each continent has its turn. I remember the stark poverty and abject conditions in Asia after the end of the Second World War and the old empires, with the French, the Dutch and so on leaving those territories in great poverty and distress. Good things have been done in the economies of various countries, but Asia was transformed by business acumen—by entrepreneurs, business people and investment. Who is to say that in some decades’ time, with more education and investment, not only will the Chinese come to Africa but other people will, too? Perhaps the British and other colonial powers will come back with their companies and invest more as well, not just in mining and extraction but in other things. They will help to build up Africa, as will the existing and emerging bourgeoisie in Africa—the business community that is in many different African countries, and I am sure in Uganda as well, which I have not had the pleasure of visiting. That reconciliation is important, because we are all in the global village now, and it means that Africa could be the next continent to develop—with more investment in education, and more of the air-conditioning that is needed in very hot climates. As those things gradually come, they will mean a great deal to those who experienced the bitter past and later a glorious future, and arrived here to help this country to become one of greater justice and fairness and multiethnic tolerance.
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Lord Bilimoria: My Lords, over the over the centuries communities have had to flee persecution, drop everything they owned and the connections they had built up, and flee. Over 1,000 years ago my own community, the Zoroastrian Parsees, had to flee their homeland of ancient Persia and settle in India. Fast forward to today and I would say that the Parsee community, in terms of per capita achievement, was one of the most successful communities in the world, in spite of the way in which they had to leave their country.
I thank the noble Lord, Lord Popat, for initiating this debate. Forty years ago, as we have heard, Ugandan Asians had to drop everything and flee due to the cruel actions of a brutal dictator, Idi Amin, and came to this country with nothing. Fast forward 40 years and look at what they have achieved. There is the Madhvani family, of whom the noble Lord spoke; Anuj Chande, my friend, who is a member of that family, is a senior partner in Grant Thornton. The noble Lord, Lord Popat, himself has been an enormous success himself, and then there is my friend Shailesh Vara in
the other place, and the Jatania family. I could go on with the numerous examples of Ugandan Asian business people who have been successful in this country, all in the space of a few decades.
When I first imported Cobra beer to the UK, I knew that Indian restaurants were going to be my base, but the first case I sold was to my local corner shop, owned by east African Asians. Today I am a senior independent director of Booker, the largest wholesale company in Britain, and we supply over 70,000 independent retailers, many of whom are east African Asians. I have seen first-hand how hard these families work and how every member contributes to the success of their businesses. I know so many stories of children coming home from school to work in their parents’ shop, who then work late into the night on their homework. This embodies for me what it is like to be an Asian in Britain.
When I am asked about Asian values, I say that it is very simple—it is down to the importance of hard work, of family and of education. The noble Lord, Lord Popat, also spoke of these values. Nobody embodies these Asian values more or better than the Ugandan Asian community. I congratulate the noble Lord, Lord Popat, on securing this debate and highlighting the achievements of this wonderful community. However, the success of the Zoroastrian Parsees in India was possible only because the Indians, starting with the Gujaratis on the west cost of India, allowed the Parsees to come in and settle, practise their religion and keep their culture and customs—and not just exist but co-exist with the local Indian community. Similarly, the success of the Ugandan Asian community has been possible only because of the generosity of this great country that took them in and gave them the opportunity to flourish. The noble Lord, Lord Popat, has thanked this country; I always thank it for giving me and the Asians here that opportunity.
Let us put this in perspective. As the noble Lord, Lord Janner, said, in the 1970s this was a country full of prejudice, when the glass ceiling was not just still there but was double-glazed. Even when I came from India as a 19 year-old in the early 1980s, Britain was a very different country from what it is today. Today, we have improved in leaps and bounds as a nation that is not just an opportunity-for-all country but a multicultural country and a meritocracy, where people from any religious or racial background can reach the top in every field. It is a country where entrepreneurship was looked down upon three or four decades ago. Today, entrepreneurship as demonstrated by the Ugandan Asian community is celebrated in this country.
In fact, those corner shops started by this community are the cornerstone of our economy—the entrepreneurial success stories of these individuals, who went as complete strangers to every high street of this country, opened up their shops, won customers, made friends and, more often than not, put back into their local communities. To this day, in spite of the proliferation of the giant supermarkets, the Ugandan Asians who own the two corner shops near our house know the names of all of my children, as they know the names of the children of all their customers, and they work really hard.
This country has been built on good immigration, the kind that we have seen from the Ugandan Asians, but the way in which this Government are dealing with immigration, with their immigration cap, is crude and blunt—they are using a carpet-bombing technique. The Government’s policy is not just addressing bad immigration, it is also stifling the good immigration that, quite frankly, this country has been built on over the centuries. The immigration cap is affecting businesses, not only in the signals that it is sending out in general but in very practical terms. For example, as I mentioned earlier, the foundation of my business is the Indian restaurant industry, where I know from the Bangladesh Caterers Association—the leading industry body—how much the industry is suffering because it cannot bring in the skilled staff, and chefs in particular, that it desperately needs. I am all for “curry colleges” being set up in Britain in the way that the University of West London, where I was proud to be chancellor for five years, is doing. However, these initiatives take time to produce the skilled individuals that the industry so badly needs. In the mean time the restaurants, which are already suffering a huge recession, are, on top of that, being deprived of skilled staff by the Government’s ill-considered Immigration Rules—and we as consumers are suffering because we are a nation of “curryholics”.
I have spoken many times about how the Immigration Rules are affecting higher education. Britain has the best universities in the world, alongside those in America. Now the Government have removed the two-year postgraduation visa for students, which was such an attraction to foreign students, who brought some £8 billion of revenue into this country. Quite apart from that, foreign students enrich our universities; they enrich our home students, giving them wonderful experience of interacting with international students as well as building generational links across the world. I am the third generation of my family to have been educated in this country.
We have seen a dramatic fall in the number of applications from students around the world, particularly from India, because the Government are sending out signals that Britain does not want foreign students. I know that this is not the case but that is the perception that has been created. Some 30% of academics at Oxford and Cambridge, for example, are foreign. Even they are suffering in terms of getting the brightest and the best because of what I believe is a retrograde government policy.
I have spoken before about the UK Border Agency abruptly taking away the licence from London Metropolitan University to sponsor visas for foreign students and telling the existing students that they had 60 days to find another university. It claimed to have found irregularities but the vast majority of those 2,500 to 3,000 students were completely innocent of any wrong-doing. This is without regard to the finances of the university, which will be short of £30 million a year. Not only does this jeopardise the university but it sends a signal to foreign students around the world that if they come and study in Britain there is no certainty that they will be able to complete their studies at their institution. That is damaging and short-sighted. Again, I ask the Minister if she will request the Government to remove student figures
from the immigration figures, just as the United States, Canada and Australia have done. Why do we have to include them?
In conclusion, we are a tiny country of 60 million people and we are rightly worried about excessive immigration. We need to clamp down on illegal immigration, but why are we doing it in a way that is harming our economy, our universities and our competitiveness—the very fabric of our nation? As the noble Lords, Lord Popat and Lord Janner, said, the Ugandan Asian community has shown the wonderful way that it has integrated. The Asian community makes up 4% of the population of this country and yet is contributing more than double that percentage to its economy. The Ugandan Asian community has shown clearly and brilliantly that good immigration always has been, and always will be, great for this country.
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Lord Sheikh: My Lords, I am extremely thankful for the opportunity to speak in this debate, and I am most grateful to my noble friend Lord Popat for calling it and for his excellent speech. That is not least because members of my family were among the 28,000 Ugandan Asians who came to the United Kingdom in the 1970s. Thus, the personal resonance of this subject for me holds no bounds.
I also believe that this 40th anniversary provides us with an opportunity properly to reflect on just how significant a part this movement has played in the cultural and social development of the UK, and how much better off we all are because of it. Ultimately, the UK gave asylum to around half of those exiled from Uganda, including many from a cross-section of different religions. Such a considerable and complex movement of people brings with it personal stories of triumph and turmoil.
My father originally came to Uganda in the 1920s and quickly carved out a name for himself in a wide range of industries including cotton, hides and skins, coffee and property. He was president of the Indian association in our home town for more than 30 years and represented all the communities of Asian origin. He also helped to pioneer the Ugandan education system, benefiting thousands of children. He can be described as a man of vision, an entrepreneur and a philanthropist. He died in the 1960s, before my family were expelled the following decade, but I had already learnt much that has inspired me to do well in this country.
I brought that hunger and enthusiasm with me when I came to this country. This culture is typical of many other Asians who came here from Uganda. Although the ancestors many of the Indian families were originally brought over in the 19th century to help build the railway system, they had since become successful in businesses and professions. The community prospered in every walk of life. By the 1970s, they were the backbone of Ugandan economy. There was peace and harmony between people of various religions and racial origins in Uganda. When the Asians were expelled, their properties, businesses and almost everything else was taken from them by Idi Amin and his Government.
As such, they arrived on British shores completely penniless. General Amin took everything from us except our knowledge and what we had in our heads.
I think that I speak for most, if not all, of those who came to this country during this time when I express my gratitude for Prime Minister Edward Heath’s honourable decision to allow those of us with British passports to settle here. Others went to places such as Canada, Australia and Europe, but I am grateful that my family was able to come and enjoy the opportunities that the UK provided to us and thousands of others. Upon their arrival, many Ugandan Asians were able to open corner shops and other small family businesses that proved to be highly successful in serving the needs of local communities. Many of them also took jobs in various sectors. This provided them with a solid base on which to raise their families and rebuild their lives.
The children of those families have since grown up and been educated here in the UK, serving only to advance their family lines through the high quality of learning that we so celebrate in this country. While some have taken over the family corner shop or followed in their mother’s or father’s footsteps, others have moved into different professions that in many cases were not accessible to their parents.
Today, the sons and daughters of Ugandan Asians are visible in every walk of life, from medicine to banking and from writing to manufacturing. They make valuable contributions to our workforce, pay their taxes and help us to compete on the international stage. It should also be noted that the crime rate among this community is very low. Their influence can even be felt in this very House; I know that my colleagues, the noble Lord, Lord Popat, and the noble Baroness, Lady Vadera, share my proud heritage, as do Shailesh Vara and Priti Patel in the House of Commons.
Perhaps the most notable example of where Ugandan Asians have thrived as a community is in Leicester and in the London Borough of Harrow, where, despite much resistance at the time, a number of the immigrants chose to settle. In the short term they helped to breathe new life into the economy of these areas, mainly through regenerating the manufacturing base and establishing new businesses.
There are many specific examples of individuals and families who have thrived and become successful in their own right upon coming to the United Kingdom. I should like to mention the inspirational example of a good friend of mine, Mr Jaffer Kapasi, who was one of those who moved to Leicester in 1972. He arrived in the United Kingdom at the age of 22 with nothing. After university, he trained as an accountant and, several years later, set up his own business. He chaired a housing association for elderly and vulnerable people in the Midlands. When he took over the chairmanship in 1992, the association had 280 homes, and when he stepped down last year it had 1,900. He was awarded an OBE in 1997 for services to business in Leicestershire. This year, the Meiji University in Tokyo published his life story and I highly recommend that noble Lords read it.
The contributions of Ugandan Asians to the United Kingdom can be acknowledged on many levels and in many circles—economic, cultural, social and professional. It is a testament to how homogeneous a community they are that they have integrated so well into the British way of life. Wherever they have gone, they have earned respect, maintained a strong work ethic and forged successful relationships with other communities.
This is a land of opportunity and tolerance, and we have always found the environment highly conducive to success. These qualities have allowed the Ugandan Asian community to flourish and, in turn, its members have served only to enrich our society further. I believe that this anniversary should remind us of the opportunities that there have been for members of that community to live well and flourish.
Uganda’s loss truly has been Britain’s gain. The Asian community that came here and its future generations will, I believe, be good British citizens and help in the advancement and well-being of this great nation. Thank you, Britain, for accepting us when we arrived here. You have certainly lived up to the name “Great Britain”.
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Lord Bach: My Lords, I congratulate the noble Lord, Lord Popat— who, along with me, is a member of the all-party group on India and whom I have come to know through that organisation—on obtaining this debate and particularly on the quality of his opening speech. It is a subject on which I think the whole House can be united and I look forward to what the Minister has to say in due course.
I am delighted to be making a guest appearance on the Front Bench. Like my noble friend Lord Janner, my experience is based on what I describe as “God’s own city”; others call it Leicester. For a number of years I was a ward councillor for St Margaret’s ward—part of the noble Lord’s old constituency and part of which is in the Belgrave area of the city. A very large number of my constituents were Ugandan Asians. Even today my links with the city remain strong. I have spoken to both the executive city mayor, Sir Peter Soulsby, and to Sundip Meghani, a young Labour councillor born in Leicester of Ugandan Asian parents who came to this country as refugees—Councillor Meghani started the debate in Leicester to celebrate the 40th year—concerning the Motion of the noble Lord, Lord Popat. I thank all other noble Lords who have spoken in the debate. We have had some remarkable speeches. I very much enjoyed the account by the noble Lord, Lord Steel, of what must have been a really awful experience of watching people being forced out of their own country.
Looking back at that time 40 years ago, it is easy to be critical of some of the early responses from this country to the crisis that was caused suddenly and solely by President Amin. It represented a brutal act with no regard for generations of Ugandan Asians who had been a vital and successful part of Ugandan life, particularly where business and commerce were concerned but also in a much wider context than that. The noble Lord, Lord Dykes, talked about the Heath Government, who have to be praised for the courage
of the course that they took. I have no doubt there were queries within the Government. The late Lord Carr, a former Member of this House who is not spoken of much, was the Home Secretary. The proudest part of his political career, he told someone later, was the time that he spent persuading the Cabinet to do the right thing—which they clearly did—and do its duty to dual passport holders. The Government were pressed by their own supporters during the course of that year and it is to their credit that they saw off those opponents on this matter. They also had to face the appalling National Front in taking the brave decision to allow the refugees in, a decision for which they are still remembered today.
At local level, Leicester City Council’s famous advertisement, placed in a Kampala paper, encouraging people not to come to Leicester was not, perhaps, its proudest moment. However, I think it is worth repeating what the noble Lord, Lord Parekh, said: that particular advertisement appeared because the Ugandan Resettlement Board had made it clear that it was designating areas that it was trying to dissuade people from coming to. In fact, the advertisement told people to accept the advice of the Ugandan Resettlement Board. Thankfully, that advice was not taken. In fact, it may well be that many Ugandans were encouraged to come to Leicester by the advertisement. Whatever the reason, the effect has been very advantageous indeed for the city of Leicester. It is worth pointing out that there was no extra government money at that early stage when the advertisement appeared.
The truth is that this country can be pretty proud of the way in which the authorities, whether at local or national level, dealt with this issue. Grants were eventually made available; they were wisely spent, and sensible policies were adopted. I am immensely proud that for many years now Leicester has had a reputation for having people from many backgrounds and cultures living and working together in harmony. Much of that is down to the good sense and decency of both the indigenous population and the newcomers, to the sensible pragmatic policies of Leicester City Council over the years and to the Leicester Mercury and BBC Radio Leicester. I know it is not fashionable at the moment to praise the press or the BBC but they have done a lot in their own way to ensure that the culture of the city grew up and that the new Leicester was supported.
Those early days cannot have been easy for the Ugandan Asians who came to this country. Many of the men had professional jobs in Uganda but had to go on to the factory floor while many Ugandan Asian women, who I understand were used to staying at home, had to find jobs in the hosiery industry. In Leicester, the tradition is that the factories are very close to the residential areas due to the history of women having worked there for many years. It was through working together that barriers began to be broken down. When looking back, it is important not to fall into the trap of thinking that things were easy for those who arrived. The National Front targeted the City of Leicester and, after a brief burst of popular support but not electoral success, thank goodness, it was seen off by the good sense of the city and its citizens.
The Ugandans’ homes had been forcibly taken from them and this was a strange new country. Forty years on, it is the unanimous view among sensible people of good will across party, race or culture that Ugandan Asians have, as the debate has made clear, contributed enormously to the British way of life. Their commitment to family life and to entrepreneurial spirit has benefited this country immensely. Their ever-increasing role in public life enhances our political system too. From Members of Parliament and Ministers to senior officials in national and local government, through the arts, fashion, food and sports, those with a Ugandan Asian background have become an essential part of British life. Long may that continue.
This coming Saturday I hope to be having my lunch on Belgrave Road in Leicester at a very well known landmark, a vegetarian restaurant called Bobby’s. Some noble Lords will have had very pleasant experiences there. That restaurant is owned by a Ugandan Asian. When I come out from lunch at about 2 pm—it gets dark at that time these days—the Diwali lights on Belgrave Road will be on. Later on, those lights will become Christmas lights. I do not think that there is a better symbol of how Ugandan Asians, Asians in general in Leicester and the indigenous population have managed to find a way of living together in harmony.
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The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi): My Lords, I congratulate my noble friend Lord Popat on securing this debate and on his moving and personal speech. The noble Lord clearly embodies the Motion he is moving as he highlights the contribution of the Ugandan Asian community. Perhaps I may start where he finished. I say thank you to the noble Lord, Lord Popat, for allowing me an opportunity to respond on behalf of the Government to such a timely debate. I thank the noble Lord, Lord Parekh, for an informative and enlightening contribution, teaching me much that I did not know. Few people alive in Britain 40 years ago will forget the scenes of thousands of Ugandan Asians being uprooted from their homes and arriving in Britain. In August 1972, 60,000 people were given just 90 days to leave their homes, their businesses and their country after a senseless decree by a brutal dictator, Idi Amin.
Looking back at that fateful time, we know that the UK acted swiftly. Amin announced on 4 August 1972 that there would be no room in Uganda for British Asians. Preparations began immediately in the UK for receiving those Ugandan Asians who had British passports. By 18 September the first 193 British Asians from Uganda had arrived at Stansted Airport. By 17 November more than 27,000 Ugandan Asians had arrived in the UK. In the first year—1972-73—a total of 38,500 Ugandans Asians came to Britain. I learnt about this event as history. It has been fascinating today in your Lordships’ House to hear of it as an event that so many noble Lords lived through.
My noble friend Lord Popat touched on the huge efforts to bring thousands of people to this country in that short period. He also mentioned the kindness that
they were met with on arrival—of the charities waiting at Stansted and those who supported them, put them up and helped them get back on their feet. It was fascinating to hear from my noble friend Lord Dykes about his role as a local MP at that time, and it was interesting to hear from my noble friend Lord Popat about the late Conservative Prime Minister Edward Heath’s photograph proudly hanging in the living rooms of Ugandan Asians. I wonder how many recent Prime Ministers can imagine that their image hangs on people’s walls and is held in such esteem.
I thank my noble friend Lord Cormack for his contribution both today and at the time, when he supported a Prime Minister who was, as he said, “doing the right thing”. While many Ugandan Asians were forced to leave everything behind, Amin could not force them to relinquish their strength, their skills and their flair as entrepreneurs. They brought them here in abundance and we see the evidence every day. These qualities were referred to by my noble friend Lord Steel of Aikwood.
Just three months after the refugees had begun arriving, 1,000 employers had offered jobs to the newcomers. By 2002 it was estimated that Ugandan Asians had created 30,000 jobs in Leicester, which was one of the main cities where they settled in the early 1970s. In fact, Ugandan Asians now make up about 11% of employers in the city. The noble Lord, Lord Bach, referred to Leicester as “God’s own city”. I come from Yorkshire, which—I have it on good authority—is God’s own county, so I may not be able to agree with the noble Lord in his assessment of Leicester. However, we can both agree that the positives of Leicester, created both for and by Ugandan Asians, far outweigh what may have been some early mistakes.
Today we see Ugandan Asians making their mark in every corner of society: in politics with my noble friend Lord Popat and the honourable Members in the other place Shailesh Vara and Priti Patel, who was the first Asian woman elected for the Conservatives and whose parents came from Uganda; in journalism with the likes of Yasmin Alibhai-Brown and Rupal Rajani; in sport with Mohamed Asif Din playing cricket for Warwickshire; in public services with Tarique Ghaffur becoming Assistant Commissioner of the Metropolitan Police; and of course in business with entrepreneurs such as Zul Virani of Cygnet Properties & Leisure plc, Rumi Verjee, chairman of Thomas Goode & Co, who established Domino’s Pizza in the UK, Naseem and Moez Karsan of Jordans Cereals, Rupin Vadera, CEO of First International Group, and many others, including Jaffer Kapasi, to whom my noble friend Lord Sheikh referred.
In 1997, recognising the vitality lost to Uganda, the President invited the Ugandan Asians to return home. While some families did, most chose to remain in Britain as integrated British Ugandan Asians—one of this country’s greatest success stories. Their story is a lesson to us today about the successes of integration. I recently spoke about the barriers that stop people integrating. I highlighted how much Britons miss out on by failing to utilise the talents of the ethnic communities. The figure was estimated at £8.6 billion a year, but I believe it could be a lot higher.
I argued that ethnic minority communities were vital to our future. My noble friend Lady Thatcher once said that,
“a new resilience derived from diversity can only strengthen Britain”.
Today we are in a global race and Britain has a secret weapon: the races from around the globe that make up our diverse nation. These people have ingenuity, resilience, determination and links and networks around the world. As my fellow Minister Don Foster said in his speech in another place earlier today, the Government are committed to promoting and supporting successful integration, and to unleashing all that untapped talent by giving everyone the opportunities they deserve.
So what is the Government’s approach to integration? Our aim is robustly to promote British values such as democracy, the rule of law, equality of opportunity and treatment, freedom of speech and the rights of all men and women to live free from persecution of any kind—values that are clearly apparent in the Ugandan Asian community. It is these values that make it possible for people to live and work together, bridge boundaries between communities and play a full role in society. When there are also opportunities to succeed and a strong sense of personal and social responsibility to the society that has made success possible, the result is a strong community.
We must ensure that all sectors of our diverse society are contributing to the economic vitality of our nation. We want to create the conditions for everyone to play a full part in national and local life. I have said before that the things that stop people getting on are the same things that stop people getting on with each other. The noble Lord, Lord Singh, spoke of integration as being a two-way street. I agree, but we must also tackle the barriers to integration, and afford everyone the opportunities and values that we all take for granted.
The noble Lord, Lord Janner, gave a reflective account of what he understood by integration—to hold on to religion, culture and where you came from but adapt to the place where you now are and consider to be home. We recognise that integration is a local issue and the Government’s role in this approach is to facilitate and set the tone. I want to give you a flavour of the 30 or so projects we are supporting.
People of faith—Christians, Muslims, Hindus, Sikhs and others—are called by their religious beliefs to serve their communities and neighbourhoods, and as a Government we are committed to promoting and celebrating this record of service. We also want to help link up the social action undertaken by different faiths to maximise the impact on those in need. So this year, to celebrate the Queen’s 60 years of service to the country, we facilitated the Year of Service programme, with each faith in turn hosting a day or days of volunteering and inviting people of other faiths to join in. Around 500 projects around the country have been part of the Year of Service and I pay tribute to all those who have taken part. We are looking for ways to harness this enthusiasm and help ensure that there are further opportunities for faith-based volunteering in future.
Separately, we continue to work with the Church Urban Fund on the Near Neighbours programme, taking advantage of the existing infrastructure and experience of the Church of England. We have invested £5 million over three years to support local projects in four areas of high deprivation, which bring people of different faiths together to improve understanding and improve neighbourhoods. So far, more than 300 local projects have received grants of up to £5,000 and there are also training programmes for community activities and faith leaders.
We recognise that English language skills are fundamental to people’s ability to participate in our society, to break down barriers and do all the everyday things that we take for granted. We have already provided more than £8 million to 35 ESOL providers—mainly further education colleges—in 19 areas of England with the highest demand for English language training, and we plan to do more to support those who most need to improve their English skills.
The noble Lord, Lord Bilimoria, referred to the issue of students. Let me be clear: there is no limit on students coming into this country. If you are a genuine student wanting to study a genuine course in a genuine university, this country is open to any such applications. The noble Lord also asked about the Asian cuisine sector. I can inform him that we are taking forward the Asian cuisine policy specifically to encourage home-grown culinary talent. We are offering support through the Department for Communities and Local Government and BIS to support training and scholarships to bring bright young people from all communities together to support this industry.
The noble Lord makes an important point, but I am sure that he would also agree that we sometimes find that the people coming to work in the communities where this demand is needed are the same communities where there are the highest levels of youth unemployment. It is therefore absolutely right that we invest in our own young people to take up these opportunities.
I am delighted to see so many events taking place to recognise the contribution of our Ugandan Asian communities. The India Overseas Trust and the British Uganda Asians Core Committee have arranged a number of commemoration events that have been taking place since September in London and Leicester. There was a speech by Shri Praful Patel in east London on 13 October and a thanksgiving event in Leicester on 16 October. Many further events are planned for the full year up to September 2013, as well as an exhibition organised by the New Greenham Arts Centre. I would urge noble Lords to participate.
I end my remarks by praising my noble friend Lord Popat for securing this debate. He has given us the chance to reflect on the enormous contribution of his community—our community—which turned dispossession into opportunity and tragedy into success; a community whom we proudly call the British Ugandan Asians.
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Lord Popat: My Lords, I am humbled by the Minister’s excellent summing up and her comments about the Ugandan Asian community. This 40th anniversary is
always going to bring mixed emotions: sadness, regret and a wonder of what might have been, but also pride, delight and inspiration. I was very proud to tell my story about the success of my community in your Lordships’ House and am delighted and inspired to have heard today from so many Peers with such a wide range of experience of the Ugandan Asian community.
Britain is an amazing country. It has been a wonderful home to the Ugandan Asians, who are—and will always consider themselves—proud to be British. I beg to move.
Economy: Growth
Question for Short Debate
4.15 pm
To ask Her Majesty’s Government what is their response to the Report No Stone Unturned in Pursuit of Growth.
Lord Gardiner of Kimble: My Lords, this is a time-limited debate and the limit for Back-Benchers is three minutes. I respectfully remind the House that this means that when the clock shows three minutes the speaker has already reached their permitted limit.
Lord Heseltine: My Lords, it is eight months since I set out my remit from the Government to comment on their national agenda for growth. A team of officials across Whitehall provided unlimited access to any department. No attempt was made to constrain or censure my comments. I thank the Government for that unique privilege. I am greatly indebted to the talented and dedicated team of officials who enabled me to produce a report regarded, even by those who disagree with its conclusions, as professional and well presented.
It has been suggested to me that my report should have been more focused on a limited number of targets. I do not accept that. The challenge we face is too immediate and too comprehensive. Any adequate response must involve the broad range of our institutions and our people. That is why I stress the leadership of the Prime Minister, the need for a comprehensive growth agenda, the involvement of every government department as appropriate and, critically, a central capability to ensure the delivery of the promises involved in such a strategy.
Yesterday, the Chancellor of the Exchequer directed most of his response to my central theme of localism. I am most encouraged by this and by his promise of a full response in the spring.
Uniquely, of all advanced economies, this country relies on central government and its bureaucracies to initiate, determine and administer economic policy. I believe there are consequences from this: the minimum of local initiative, the almost total absence of incentive for localities to add to government funding from their own or from outside resources, and a conformity of practice that ignores the diversity of local economies.
My report outlines an alternative concept. I argue that our local economies should be more driven by local factors. They should engage a wider involvement
of local leaders and use competition to attract additional, non-governmental funding. As envisaged, most of the localist agenda should be led by the local enterprise partnerships. The Government have now made available sufficient funding to ensure their ability to do this. If any local authorities are still uncertain about this partnership with the private sector, I believe that the need to bid from a single fund will persuade them to participate, although my own view is that most of them will need no such encouragement. Against that background, their local people would not be impressed by the failure to seize such an opportunity; and, of course, such a failure would strengthen the case of those who, at every turn, argue that only central quangos or departments can be relied on to deliver quality of service.
I had, then, to consider the response of the private sector to a localist initiative. We talked to each of the groups that represent the private sector. We also looked overseas at the support available in competing economies. Our findings were published in an annexe to the main report and our conclusions were as bleak as those first reached by Lord Devlin, who conducted a similar exercise in 1972. At home and abroad, other countries have developed different but comprehensive support for their small and medium enterprises. This Government have set out an ambitious target to increase our exports to £1 trillion by the year 2020. The Prime Minister, on recent visits to Brazil and India, two of our target markets, found that there were no British chambers of commerce there at all. Led by my noble friend Lord Green, this Government have moved swiftly to remedy this problem. In the first instance he is working on 20 key markets, and he has appointed a number of new trade envoys. I think that is excellent, and I am very much in agreement with the remarks of my noble friend Lord Howell of Guildford and of my noble friend Lord Green himself in an earlier debate in this House today.
However, we need the same sense of urgency at home. Chambers of commerce, as they are now constituted, represent only a fraction of our companies. Let me give just two examples: Birmingham has fewer than 3,000 members; Milan has 350,000 members. As the noble Lord, Lord Haskins, knows, as he was present at the meeting in Humberside, where I discovered these figures, the chamber there has 1,000 members. The Federation of Small Businesses has 1,000 members. There are 70 entrepreneurs who have formed a breakaway group; that is 2,070 firms. There are 40,000 firms on Humberside.
An important route to the export market is to reach out to the overwhelming majority of companies that actually do not export. The British Chambers of Commerce’s own analysis revealed that 58% of exporting companies did so because overseas customers approached them in the first place. This is not exactly what we might call entrepreneurial salesmanship.
It is my belief that we need to provide more sophisticated services to support our small and medium enterprises across the range. They need to be private sector-led. Membership of chambers should remain voluntary, but it should be sufficiently attractive to draw more members. They should signpost advisory services, they should be involved in the provision of
mentoring opportunities, they should encourage local procurement and they should provide a vehicle for the delivery of central departments' services.
The simple test is to ensure that our companies are supported by the same quality of services that our competitors enjoy overseas, whether it be the Small Business Administration in the United States of America or the more state-orientated proposals on the continent of Europe. The British Chambers of Commerce and its associated member chambers have now communicated to the Government their enthusiastic endorsement of such an approach in this country. I very much hope that this will be reflected in the Government’s response in the spring.
The Chancellor was good enough to say that the report has attracted wide support, and much work was already under way in the localist agenda. Greater Manchester has pioneered the concept of a combined authority. Liverpool negotiated the first city deal. The noble Lord, Lord Adonis, is working in the north-east on how to make progress there. More specifically, Andy Street, the managing director of John Lewis and chairman of the West Midlands and Solihull LEP, and Sir Albert Bore, leader of Birmingham City Council, have asked the Prime Minister whether I can work with them to develop proposals along the lines of my report, which the Government could consider as they reach conclusions. Such work would obviously include and involve the Birmingham chamber of commerce in exploring a wider role. I hope very much that the Prime Minister will agree to this suggestion and I fully recognise that it would involve no commitment to accept any proposals that arose from such an initiative.
The Chancellor’s response yesterday seems to have one novel feature. Most government reports are targeted at specific policies, activities and groups. It is easy for most people to feel that it is someone else’s responsibility and has little to do with them. The announcement of the single fund for local economic development and competitive bidding changes that. There are now 39 teams—the LEPs— of talented, motivated local people with the opportunity to attract public money in a way that serves their places, encourages them to raise additional resources and binds the public and private sectors together in a common cause. If I may borrow a phrase, we are all in this together.
4.26 pm
Lord Mandelson: My Lords, I warmly congratulate the noble Lord on securing this debate and on his report as a whole. It will not surprise him that I strongly agree with the bulk of it. When I returned to the Government when the financial crisis struck in 2008, my eyes had been opened by my continental experience to what most other sensible Governments do in placing their weight behind the growth of new markets, sectors and technologies in their economies.
This is not, or need not be, dirigisme of the clumsy and counterproductive kind. It is about identifying an economy’s comparative advantages and then maximising the public and private investment in those advantages; removing unnecessary barriers to new and growing businesses; making sure that all the available national and local instruments or interventions of government
are acting, as far as possible, in harmony; pump-priming with additional government resource where the market is failing to provide adequate finance; doing some of the heavy lifting in attracting foreign investment in R&D and building domestic supply chains based on this activity; or helping British manufacturers and service providers to enter global supply chains.
The kinds of frustration that the noble Lord will experience in achieving his report’s implementation are, I suspect, the same that I faced. I want to comment briefly on them. Broadly, they are of three kinds. First, there is lethal short-termism—the bane of British government and corporate life, neither of which have a sufficiently long-termist view inculcated into their perspective and working methods. When I embarked on my own policies of industrial activism, I am afraid that the policy horizon of many in government seemed to stretch from the day of policy announcement to around a couple of months before interest was lost. The hope of those who never signed up to the policies in the first place seemed to be that the policies would die through indifference. It therefore requires strong political will in government to counter this. I regret that such stop/go short-termism kicked in again when the change of government came. The coalition, rather than building on what I started, decried Labour’s growth policies and pinned all its hopes on deficit reduction instead.
The second obstruction lies with the Treasury. Its long-held attitude is that smart, strategic, interventionist policies do not work because, in principle, Ministers and markets do not mix. This is coupled with deep scepticism about public borrowing for extra investment which, in its view, simply adds to the country’s borrowing requirement without delivering anything of very much value. Its approach, I am afraid, is to kill the policies at birth when it can. Then, if this fails, it severely cash-limits the measures and makes access to them by businesses so difficult that they are soon shown to have failed. This inbred Treasury attitude simply has to be conquered in order to make any progress.
The third source of obstruction is more latent than malign, and possibly the most difficult to overcome. It is the sheer lack of experience and capability inside government to design and implement the sort of market-based interventionist policies and instruments we need, especially in the financial area. We need to prioritise this capability and recruit it with government—by which I do not mean, incidentally, collecting further centrally based Whitehall officials.
In conclusion, we can and should learn from others, so if I had one piece of advice for my own party, it would be to spend its time while it can looking at others’ experience internationally and, at home, be inventive; build on what exists rather than returning to ground zero and be prepared to take a major leap in ambition, intervention and organisation in government. Nothing short of that will be needed in the huge economic battle we have to continue to take on.
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Lord Shipley: Every time I cross the Gateshead Millennium Bridge I think back 25 years to a polluted River Tyne with little economic activity. The
transformation has been inspirational. It is the result of public sector intervention through urban development corporations, led largely by local people triggering private sector investment. Those corporations were, of course, the creation of my noble friend Lord Heseltine, who had a compelling vision of what could be achieved in our cities.
That vision is here again in this report: England is too centralised and faster growth cannot be delivered by Whitehall. The Government have taken several steps to address this: city deals, the Localism Act, and enabling local authorities to share in business rate growth. They now need to go a step further so that local enterprise partnerships, the private sector and local authorities working together and empowered by central government can drive growth in their localities.
Most of Whitehall operates in silos and my noble friend Lord Heseltine is right to say that the Government need to think more in terms of places outside London and how to build on their unique strengths. The abolition of government offices in England was a mistake. I do not advocate government offices which centralise public service delivery in their regions, but I do want government offices which bring key Whitehall departments into a single place with a duty to drive growth and unlock barriers to growth.
Such a government office would work as a partner of the private sector, local authorities and LEPs. I agree entirely with my noble friend Lord Heseltine that LEPs must become engines of growth and I welcome the Chancellor signalling yesterday that a greater proportion of growth-related spending would be devolved to LEPs from April 2015 in transport, skills and employment.
Central to this are enhanced roles for FE colleges and the private sector. Recently I was at an event in the new creative quarter in Nottingham. The event was held in New College, Nottingham, a founder member of the Gazelle Colleges Group formed last year by five leading FE colleges in England: New College, North Hertfordshire, Gateshead, City College Norwich and Warwickshire College. There are now 20 of them, all seeking to reshape FE colleges by putting entrepreneurs in a more strategic position and focusing on self-employment and new business development. They are working to align local growth clusters to support business formation and the delivery of appropriate skills. They should be commended for this.
This report has attracted strong support from the private sector, but there was a hint, initially from the British Chambers of Commerce, that the report focused too much on institutions. I do not think that is valid because institutions matter. We need our chambers of commerce to be delivery partners of the LEPs in business support and training, and if the chambers maintain a voluntary membership structure, as they seem to prefer to do, we should create a one-stop shop through the chambers which businesses positively want to join.
A local structure is now emerging composed of LEPs with authority and resources, enhanced private sector support for business, as outlined by my noble friend Lord Heseltine, and local government leading the growth agenda, with all three partners being supported by central government,
Eleven words in this report are vital, although every word is important; that,
“there are some things only government can do to drive growth”.
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Lord Skidelsky: My Lords, the best thing about the report by the noble Lord, Lord Heseltine, is that it reflects a broad agreement that something more than deficit reduction is needed to get the economy growing again. The noble Lord’s enthusiasm to get things done is the thing I have most admired about him over the years. There is a good cartoon on the front of his report, No Stone Unturned. Noble Lords have probably all seen it, but the rock the noble Lord needs to push away ought to have the image of the Chancellor graven on it. The noble Lord proposes a Whitehall pot of £50 billion to be bid for by voluntary partnerships between local authorities and businesses over five years but, as far as I understand it, and I stand to be corrected, the Government are making no extra resources available. Rather, this is a way of getting local responsibility for the spending of money already available to local authorities so there is no assurance of any additional stimulative effect. That is an important defect.
The noble Lord has been anxious not to breach the Chancellor’s deficit reduction programme. In fact, the report explicitly states:
“I believe the Government’s economic strategy is right”,
but it is precisely this that needs to be questioned. We are in an extraordinary position. The main international organisations now all agree that austerity is having a chilling effect on the economies of Europe, yet they also say that there is no alternative. That seems much too passive. The Chancellor alone denies that his deficit reduction policy has any responsibility for the weak performance of the economy. It is all blamed on head winds. I regret to say that the OBR has helped him massage his figures to show that the deficit is coming down and therefore that he is on track, even through the track is five years longer than he thought it would be in 2010. As Chris Giles notes in today’s Financial Times,
“had the OBR shown teeth, Mr Osborne would have failed on all his fiscal targets”.
The only thing worth talking about today is the validity of the targets themselves and the theory of the economy on which they are based, but that is the last thing this House seems to be willing to discuss. I hope we will soon be given more than three minutes per speaker to address the larger issue.
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Lord Baker of Dorking: My Lords, the essence of the Heseltine report is the growth and wealth of the economy over the next 50 years. We all know that it will not come from banking services and real estate but from technological innovation, inventions and the capacity to make goods and services that the rest of the world wants to buy, but there is a massive skills shortage. The Royal Academy of Engineering and the Engineering Employers’ Federation have recently forecast that by 2020 there will be a shortage of 1.25 million
professional scientists, engineers and technicians in this economy. If we have that, we cannot meet any of the targets that the Chancellor set yesterday.
The only educational institutions that are trying to meet that demand are the colleges that I have been pioneering for four years, which started under Labour, as the noble Lord, Lord Mandelson, will remember: university technical colleges. They are for 14 to 18 year- olds. There are 600 students. They are employer-led, university supported, and the youngsters do up to two days per week practical work.
The first one, which has operated for two years in December, was the most successful school in the country. Every youngster at 16 or 18 got a job, an apprenticeship or a place at college or university. We have five colleges open; 33 approved and 21 applied for. We need masses more of these colleges—seriously a large number. They accord very much with the spirit of the Heseltine report as they are employer led. Hitachi wants one in Durham because it is building a factory for 700 staff to build rolling stock and there are simply not enough skilled technicians in that area to fill the factory.
In Salisbury the LEP, the agency my noble friend is quite rightly using, came to us and said there was a skills shortage there because of the redeployment of the Army from Germany and the building of new maintenance depots, so together with the local employers, the University of Southampton and local people it was going to apply for one.
My point is that if we do not fill this skills shortage, you can forget all the targets because we will simply stagnate. This is the single most important thing we have to do. Matthew Hancock, the Minister for Skills in my noble friend’s department today issued a statement setting out the policy for the next two years. In particular, he said that the LEPs should be given a strategic policy for skills policy. That is going to be very important. I hope that they will bid for some of the money that has been suggested and have some money of their own. This is singly one of the most important things we can do. Without those skilled people, unless we import from overseas, we will meet none of our targets.
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Lord Haskel: My Lords, the noble Lord, Lord Heseltine, has form on industrial policy and I am delighted to see that he has carried it with him into this report. Instead of just market forces, he speaks about all aspects of industrial strategy and what it should look like. I particularly welcome his emphasis on co-operation—Government, business, technology, education, finance and society all working together and all interrelated, aligned in a trajectory directed towards growth, leaving no stone unturned. At least I think that is what the cover says.
He calls for all government departments to develop a growth agenda. He wants the Government to help industry to create winners. He wants the Government to tilt business towards British industry. I absolutely agree. He wants the financial sector to play its part in this to serve business and industry rather than itself. I agree.
He wants to help the education system to create the STEM graduates the noble Lord, Lord Baker, has just told us about. He wants to do something about the one in four adults who are functionally innumerate. Who could not agree? We are again reminded that we enjoy the fruits of investment in science and technology and research planted by earlier generations. Of course, we have a similar obligation to the generations that come after us.
The noble Lord speaks of localism. He wants to bring back the importance of place and the Government have responded with money for the LEPs. It is a pity they did away with the RDAs because then it would have happened a lot more quickly.
He explained why he wants to strengthen the local chambers of commerce but society now plays an even more important part in industrial strategy. It plays an important part in getting people to work together. During the past 20 years, we have developed clusters where we can stimulate and support each other and speed things up. We have developed knowledge transfer networks. Publicly funded science is becoming open source. The minimum wage is developing into a local living wage.
Some employers have kept people in work by reducing working hours to see them through the hard times instead of sacking everybody. We have some highly productive factories, not only because of investment, but also because employers and workers see themselves as one instead of two sides of industry.
Business now has to be socially responsible because society rejects clothing from sweat shops, it prefers products and services that are environmentally friendly and fair trade, and it rejects those firms whose tax arrangements are seen to be unfair. Marks & Spencer wins prizes for its Plan A.
We probably have to shine more light under this stone better to understand how society has to play its part in our industrial strategy. I think that goes beyond localism.
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Lord Bilimoria: My Lords, the noble Lord, Lord Heseltine, has always been known as a man of action. From the day of his long-awaited maiden speech—after more than 10 years’ patience on behalf of your Lordships, to be precise, and when I had the privilege of paying the tributes to him—he has hit the ground running. Within barely seven months, he has produced his No Stone Unturned—In Pursuit of Growth report. The Economist teasingly referred to it as “Tarzanomics”.
To his credit, the noble Lord is absolutely right to conclude that:
“There are no easy or short term ways to beat the world’s most competitive economies”.
The suggestion to create a huge pool of money, endorsed by the Autumn Statement yesterday, to be devolved locally is, in theory, very good. The promotion of public-private partnerships is excellent. I am proud to be the founding chairman of the UK-India Business Council, which is funded by UK Trade & Investment and the private sector. I know that the strength of the UKIBC is that, as a public sector organisation alone it would not be effective, and as a private sector organisation
alone it would not be effective. It is effective only because of the collective efforts of the public and private sectors—from British and Indian business to UKTI and Foreign and Commonwealth Office teams in the UK and across India.
My worry is that, in spite of what the noble Lord, Lord Haskel, has said, the RDAs created by the previous Government were not considered to be that effective. The Learning and Skills Council, which was created at great expense, was disbanded. These were great ideas in theory but difficult to implement in practice. They simply resulted in the creation of another layer of bureaucracy and another opportunity to waste money.
In building a business from scratch, I have seen that ideas are one thing but execution is what makes it happen. Will the Government confirm whether LEPs are local enterprise partnerships or, as the report refers to them, local economic partnerships? I hope it means both.
I was very worried about the report’s approach to foreign investment. Just look at what Tata has done since 2006. It has invested more than £10 billion and has performed a miracle in turning around Jaguar Land Rover, which now has made a profit of more than £1.5 billion. This is in spite of the previous Government turning it down for the funding that it so desperately needed in the depths of the recession. I hope that the Government will not take up the insinuations in the report. We have always been one of the most open economies in the world and we need constantly and desperately to attract foreign investment.
In the report, I was delighted to see the Government being asked to deal with illegal immigration, which they have failed to do so far. UKBA has been absolutely failing. However, will the Government also rethink their immigration policy, which is damaging British business and higher education?
In conclusion, I congratulate the noble Lord, Lord Heseltine, on his report but will it really get this Government creating institutions that are as effective as the American Small Business Administration, to which the noble Lord referred? It has been instrumental in supporting small businesses, not just with advice but by providing finance to the tune of billions of dollars a year in a sustained manner for decades. Will it be as effective as the German chambers of commerce, to which every business in Germany belongs? If not, I fear that this report will be another well intentioned, half-way step when what we as a nation desperately need is a giant step forward.
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Lord Wolfson of Aspley Guise: My Lords, I congratulate the noble Lord, Lord Heseltine, on his excellent and energetic report. However, I should like to add a different perspective. In doing so, I declare an interest: I am the serving CEO of a FTSE 100 retailer that employs around 46,000 people. Our problem is not cash or the availability of funds; we generate £240 million more than we need to invest in the business or to pay our dividends. Our problem is not finance. Along with many large companies, we are able to raise finance on the bond markets at prices that we have never seen before—4% for 10-year money. Nor is the problem a
lack of opportunity for investment; we have identified 1.2 million square feet of shops that we would like to open and we would like to employ 5,000 more people.
The problem is that all too often the Government are getting in the way. Next year, of that 1.2 million square feet, we will open barely 250,000 square feet. In the vast majority of cases, the problem is the planning system. The issue is not just that it says no but the time that it takes to say yes. In one shop, it took nine months just to get planning permission to build storage for stock. We then had to wait three months to see if we were going to be judicially reviewed. That is one year in which 100 people did not have jobs because of our planning system.
The problem, it seems to me, is that, while we have some great councils in this country, there are far too many people involved in our planning system who simply do not understand wealth creation. They do not understand that building new shops and creating new jobs and new services for local communities actually creates wealth. Far too often they say to me what one council official I was talking to said. We have a £2 million shop in the town centre and we wanted to put an additional shop outside the town. He said, “Surely you’ll just spread the same amount of trade over the two shops”. The shop outside the town centre will take, conservatively, £20 million. He did not understand the potential. Oddly, he did understand the inverse. He understood that to close shops is to destroy wealth and deprive people of local services.
That imbalance of perception courses through the veins of our planning system. It means that we have a planning system driven by people who are profoundly pessimistic about the ability to create wealth. Their belief that one cannot create new wealth by opening new shops, for example, means that they stop us opening new shops. It is a self-fulfilling prophecy and extremely dangerous. In particular, it has led to a hugely damaging zoning system that puts houses in places where people do not want to live and shops in places where they do not want to shop.
Noble Lords will all see an example of that if they drive down a motorway over the next week; if they look to the side they will see, at some point on their journey, a brand new housing estate; neat new-build houses, built where the planners have put them. The planners cannot see, because they do not understand wealth creation, that by building houses in horrible places they destroy wealth.
If we are to have a thriving economy, my belief is that there is enormous pent-up energy in the private sector that can be released. All the planning system needs to do is let us build homes where people want to live, and of the type they want to live in, and build shops where they want to shop and offices where they want to work. If the planning system were driven by those principles, we would have a far more vibrant and effective economy.
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Lord Hollick: My Lords, on page 17 of his excellent report, the noble Lord, Lord Heseltine, sets out in graphic detail the persistently poor level of UK productivity compared with our main competitors. His response is, characteristically, to lead from the
front. He has demonstrated that one energetic and open-minded person who believes that the state has a key role to play in promoting economic growth can, in six months, come up with a telling analysis of our growth crisis—and it is a crisis—and recommend 89 generally sensible and practical proposals to address that crisis, a task that has eluded a platoon of Business Ministers for two and a half years.
Investment in infrastructure, plant, equipment and skills are, as the noble Lord, Lord Heseltine, points out, essential to improving our productivity. Yesterday the Chancellor made welcome moves in that direction, but far more ambitious measures are required in order to meet the estimated £350 billion infrastructure investment needed over the next 30 years, according to McKinsey. Such measures include an infrastructure bank which can benefit from record low long-term borrowing rates. Road pricing, long advocated across this House, would spur large-scale investment in our aging motorway networks. These measures as well as the proposal of the noble Lord, Lord Heseltine, to help public and private pension funds, insurers and banks to finance infrastructure instead of buying gilts must all be energetically pursued.
The noble Lord is surprisingly reticent about additional measures to stimulate demand, which is the key to growth and investment. The failed efforts to promote lending will continue to fail unless and until businesses can see increased demand to justify taking on more debt or, preferably, raising more equity. There are fiscally neutral ways of stimulating demand. Is using the proceeds of the 4G auction to pay down debt the best strategic use of this windfall during the worst economic crisis of modern times? Why are the Government still taxing houses on the basis of the 1991 valuation when the proceeds arising from a modest revaluation at the top level would finance the reduction of VAT on home refurbishment or a further £200 on the income tax threshold?
The noble Lord’s call for empowered localism to replace the inefficient and bureaucratic Whitehall is welcome and was warmly embraced by the Chancellor. The history of local versus regional versus central delivery is littered with disappointment and failure, all too often driven by political fashion rather than by proven performance. Recommendation 7 hits the nail on the head when it calls for LEP boards to have,
“the necessary skills and expertise to deliver their expanded functions”.
The recent excoriating report by the Public Accounts Committee into the competence of the Regional Growth Fund provides a stark and timely warning of what can go awry.
The noble Lord rightly highlights stability as an essential precondition to economic transformation and goes on to cite our relationship with Europe as a prime example of the need for stability. Now that the noble Lord enjoys the warm embrace of both the Prime Minister and the Chancellor, we can be more confident that a rational voice in support of developing a sustainable relationship with the European Union, our major economic and trade partner, will be heard and, hopefully, heeded.
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Lord Hodgson of Astley Abbotts: My Lords, in the three minutes available to me, I begin by congratulating my noble friend on his remarkable tour d’horizon and its 89 recommendations. I want to focus on just two issues: the malign impact of regulatory overlap, in his recommendation 44, and the role of the Government as a commissioner and purchaser in recommendations 36 and 37.
First, on regulatory overlap, during the two reports that I have done for the Government, in particular Unshackling Good Neighbours, which focused on the regulatory burdens on smaller firms, charities and voluntary groups, it became clear that there is a great tendency for regulators to take in each others’ dirty washing. Ofsted asks about the frequency of testing electrical appliances, the Charity Commission about CRB checks. Both those issues are very important, but they are the subject of separate statute law and have their own enforcement procedures and authorities. Firms, especially smaller ones, are vulnerable to repeated questions about whether they have checked this or that—questions that very often are not set in context, do not need to be asked and are not accurate. They leave the firm feeling that, to be on the safe side, everything should be checked. As a result, the default option becomes, “If in doubt, check everything”. Per contra, if my noble friend’s ambitions are to be realised, we need more judgment and less process.
On commissioning and purchasing, of course we have to ensure value for money for taxpayers, but purchasers and commissioners need to consider how many tenderers need to be invited against the size of the contract. There can be only one winner, and the economic frictional costs of many losers are considerable. Purchasers and commissioners also need to consider the cost of tendering in relation to the value of the contract. In Unshackling Good Neighbours, we suggested 2% of the value of the contract up to £500,000 and 1% thereafter. When a service is being provided, commissioners also need to consider the annual cost to the provider of the monitoring. Again, we suggested 4% up to £500,000 and 2% thereafter.
Further, commissioners should not change their methods of measurement midstream. To do so adds exponentially to the costs of SMEs. All this may appear very nitty-gritty but, unless the Government are able to agree centrally and locally and stick to some performance yardsticks, much of the potential benefit of their purchasing power will be dissipated.
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Lord Giddens: My Lords, there was quite an amusing headline in the satirical magazine Private Eye recently, which touches on the point made by the noble Lord, Lord Skidelsky. It went something like, “After four years of intensive study, the IMF has concluded that austerity leads to austerity”. We can all agree that we now need to focus on growth, but not just any old growth—it has to be environmentally sustainable and evenly spread. There is no point if it benefits only the top 0.1% of income earners.
There is much to agree with in the outstanding report from the noble Lord, Lord Heseltine. We should think in a radical and adventurous way about our
economic future. Something utterly dramatic is happening at the cutting edge of manufacture, perhaps equivalent to or much more than Arkwright’s spinning jenny all those years ago: computers have crossed the line from the digital world and are intervening in the world of reality itself. This is perhaps one of the most momentous changes ever to happen in human productive activity. Although it is in its early stages, 3D printing can already make an enormous range of items, from engineering parts to dental crowns. At MIT, Neil Gershenfeld is working on computers that will be able to fabricate not just single items but complete functional systems. For example, his aim is to make a plane that can fly right out of the computer, as he says—and he does not regard this as a Utopian project.
This might be thought to be fanciful but much of it is already here. It is documented in a very detailed book by Chris Anderson called Makers: The New Industrial Revolution. Crucially, it reverses the assumption that manufacture will inevitably be outsourced to low-cost countries.
In Barcelona, where youth unemployment is more than 50%, the city is setting up digital fabrication workshops across different neighbourhoods, encouraging young people to train in them. The aim, in Gershenfeld’s words, is for the city to be,
“globally connected for knowledge but self-sufficient for what it consumes”.
This, to me, is the cutting edge of what could be a tremendous global revolution. Why should we not think along the same lines for Manchester, Birmingham and Liverpool, which brook so large in the noble Lord’s report?
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The Earl of Lytton: My Lords, this is an enormously important report. It sets sheer practicality in a philosophical context, and I hang my hat on that.
By virtue of my professional business and chamber of commerce interests, I have spent much of my life, like Voltaire’s antihero, Candide, noting both cause and effect while observing that current times are not the best of all possible worlds. The elephant in the room is the unnecessarily adversarial nature of much of our national politics, legal system and regulation. This creates risks and, in public administration terms, the response often seems to be inward-looking and protectionist, sometimes as turf wars but primarily in defence of systems rather than outcomes for growth. This has consequences. The Federation of Small Businesses surveys support my own long-held view that small businesses in particular still bear disproportionate burdens in terms of regulation, employment and tax treatment. For example, nobody wins by turning employment rights into a legal battlefield and the general costs to small businesses are, I believe, unsustainable.
The informer network of HMRC has been likened in this week’s press to the Stasi. The taxman’s reputation for aggressive treatment of small businesses is well known. While this department formally accepts some tax avoidance schemes—it has a box for it on its forms—it is an avid player in a game of catching out the ignorant, weak and unwary, even if honest, while
apparently shrinking from bigger issues and slipperier customers. Similar generic shortcomings, dual standards and ignorance occur downstream in every aspect of business life.
On the plus side, though, is the growth in microbusinesses. Many are home-based and rural-based, outsourcing much of what they need and requiring little direct employment, and thus avoiding workplace pitfalls. Many are not VAT-registered or incorporated. The internet facilitates this virtual world of micro-commerce. West Sussex, where I live, apparently has 27,000 of them, but no one knows quite how many make up this major element of local GDP. Is this simply opting out in favour of lifestyle choices? Is it a consequence of obstructive and ephemeral laws and regulations? Is it a desire to keep beneath the radar? Or is it a new economic dawn? What might it mean for national economic policy?
I applaud the efforts that the Government are already making to cut red tape. The UK remains a great place to start a business. It also needs to be a great place to grow one on. This splendid report shows that we need a revolution in regulatory attitudes and I hope that the Government are listening.
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Lord Sheikh: My Lords, the United Kingdom finds itself at an economic crossroads. This is due not just to the current financial crisis but also to the fact that changes need to be taken in our business and industrial landscape. I congratulate my noble friend Lord Heseltine on the submission of his excellent report. A renewed focus on overseas trade is severely overdue as we cannot continue to buy so much more than we sell. Our industries must be world leading and globally competitive, thus attracting inward investment and creating the potential for us to increase exports.
I was pleased that this report placed an emphasis on the long-term stability of our science and research sector, and how we market it. We need to better support and stimulate the creativity we hold within, and ensure that this is better promoted to the rest of the world.
I would also draw attention to the report’s focus on the need for our government departments to build better relationships with the private sector and with each other. So much can be gained from government embracing private sector business in a way that works with it rather than alongside it. We must give businesses confidence that the Government understand their concerns and share their aims. I agree with my noble friend Lord Heseltine that wealth creation should be the business of all government departments. BIS and the Treasury cannot capitalise on every opportunity for growth and wealth creation without the help of those in other fields. I am therefore in favour of departments contributing to a wider growth strategy through which they could join up their thinking and complement each other.
The notion of localism is also extremely important and we must capitalise on the progress that the Government are already making on this. I was pleased to hear the Chancellor accept the recommendation that more of the funding for locally tailored schemes
will go into a general pot for which local enterprise partnerships can bid. True innovation is released when it is free from central constraints, and it is the job of central government to promote and support this. Competitive bidding for such funds will encourage local communities to raise their game, give the successful bidders freedom to spend in ways that better support their local areas and, ultimately, build a nation of more ambitious and creative communities. There needs to be a greater level of co-ordination between government and the private sector, and indeed within the Government themselves. There also needs to be full recognition of the benefits of allowing strong, independent and dynamic local economies to flourish, supported but not controlled by national government.
In conclusion, I agree that we should think hard about our industrial approach, with a fresh examination of a wider economic landscape and a reshaping of our education system. We also need to take a creative look at the skills agenda.
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Lord Monks: My Lords, as the noble Lord, Lord Heseltine, rightly says in chapter 7 of his report:
“If there is an upside to the worst … crisis of modern times, it is the emergence of an audience for deep seated and radical proposals”.
Indeed, we cannot just go back to business as usual, pre-2007. We know that we must rebalance our economy towards innovation, manufacturing, infrastructure and the weaker regions. We must save more and invest more. We should not continue to treat the City of London with exaggerated reverence, adopting an almost protectionist zeal that we do not apply to any other sector. The City can be an asset but the banks can be near-lethal to the country, as they were in 2007-08.
The noble Lord, Lord Heseltine, details measures that aim to get the UK economy match fit. For starters, this has to be done up to the level of our neighbours on the other side of the North Sea—Germany, the Netherlands, Flanders and the Nordic states. They have high productivity, positive balances of payments, strong social states, excellent training systems, scope for local and regional initiative, and influential trade unions. Those neighbours are savers and investors.
We have covered our lack of match-fitness in the past, sometimes with North Sea oil revenues and then with the boom in the financial services sector. There are no further windfalls in view and no more short-term fixes except, perhaps, devaluation, of which we have had seven against the deutschmark or the euro since the end of the war. We must surely not rely on devaluation for our future strategy. By the way, the last thing we need is a self-imposed exile from the EU unless it bends to our model. That would be, in effect, a sort of voluntary Dunkirk—and that was a defeat.
Many of the recommendations of the noble Lord, Lord Heseltine, nod in the direction of Germany and the lessons that that country provides for the UK. I add one more: the advantage of codetermination over adversarial relations at work. These codetermination principles seem outlandish to many in the UK, but they keep managements more long-termist and less
inclined to help themselves to a disproportionate share of company profits. They guide unions in the right direction, too.
The nation owes much to the long period of public service of the noble Lord, Lord Heseltine. I think of Docklands in the 1980s, Manchester in the 1990s after the bomb, and especially Liverpool over a long period, as well as many other matters, some of which have been mentioned. With this report, we are in his debt once again, and I urge the Government to act on its central recommendations.
5.10 pm
Lord Haskins: My Lords, as the chair of the Humber local enterprise partnership, it would be remiss of me not to say that I entirely support this proposal from the noble Lord, Lord Heseltine, and I congratulate him on it. It was a very interesting symbolic moment when he chose to launch it in Birmingham Town Hall, which many noble Lords will recall was where Joe Chamberlain made all his speeches. While the noble Lord, Lord Heseltine, was giving his speech, the figure of Joe Chamberlain was standing over him, reminding us of the past.
The talk of the erosion of local government and the move towards central government is one aspect that I should like to mention. I can also point to the talk of the erosion of corporate Britain away from the provinces and towards the centre, into London. In 1906, some 85% of the headquarters of the top 100 companies were outside London. Today, I guess that there are less than 10. We have seen over a period great companies such as Rowntree’s being devoured by Nestlé, an old international company, and the local identity of Rowntree’s has gone. Aviva thought that Norwich Union was not a great name, so it chose something else. Above all else, the banks have devolved local power to the centre. In the job that I do, it is difficult to make sense of all that. Contrast that with BMW in Munich, Volkswagen in Saxony, Microsoft in Seattle, Coca-Cola in Atlanta and McDonald’s in Chicago. Corporate Britain must learn to let go.
There is a huge attraction in localism. There is better accountability—a case of Whitehall versus City Hall, and I have no doubt where the accountability lies—as well as local knowledge and local experience. The noble Lord, Lord Baker, mentioned the skills problem. It is very important that that is dealt with at a local level and that local needs are met. Localism also means a speedy response, ownership and civic pride. I believe that the LEPs will develop into something called city regions, which will probably have more credibility than the regional development agencies because people identify with cities. If people identify with cities, there is a chance. Apart from in Yorkshire, people have never identified with regional development agencies.
However, the LEPs have to demonstrate that they are competent to take greater responsibility, getting talented people into public life once again and getting local authorities to pool their resources—something that is not very easy in my part of the world. Getting local business associations and local authorities to work together is, again, not very easy. Big businesses must devolve much more authority to the local level so
that people such as me can get answers on big economic decisions at the local level, rather than having to go back to daddy.
5.12 pm
Lord Northbrook: My Lords, I welcome this opportunity to debate the important report produced by my noble friend Lord Heseltine but I regret that the usual channels have not allowed the opportunity of a full three or four-hour debate. To limit contributions to three minutes makes each contribution only a speed-dating effort in addressing such an important publication.