There are some quite exciting things taking place in housing. A lot more people are thinking about self-build initiatives—in other words, finding their own way out of the problem and not depending on the Government, the state or developers. That is a great, although small, step forward. Is it true that we will find the modern prefab? Maybe we will; it has been good to read about that. Experts have tried to find the modern prefab for many years and failed, but it looks to me, given the frenzy of activity and heat generated around the issue, that maybe we will find an answer: a small, affordable home that would help to house the lowest paid and the unemployed. Boy, how much happier I would be to see that achieved than see another big tower block go up in central London.

Although I obviously have differences with part of government policy, it is important to recognise that the number of builds has improved and that the Government take housing seriously. Nick Boles has made an important, thoughtful and radical contribution to the debate. We need radical solutions. My biggest anxiety in this policy plethora is that the initiatives will come and go—some will succeed, some will fail—and then, when the turmoil ends and the media wagon moves on to put another issue at the top of our headlines, the problem will remain: still not enough decent homes in the right place for the right people.

That is why, when I thought about what I might ask us to think about this afternoon, I returned to the themes of the January debate in the House. The burden of the argument in that debate, led by the noble Baroness, Lady Ford, and others, was that we needed to think more carefully about the new town development corporation approach, to see whether it could give us a more rounded solution to all the individual policy initiatives we have—not just in London. I take the point made by many noble Lords that there might be different policies for London and the south-east. We need to look at where people’s needs are, wherever they may be. Any policies that look at new towns should focus not just on a set number of new towns, but on what people want and on creating, as has already been said in another place, population densities of about 100,000 people.

I never cease to be impressed by the achievements of my parents’ generation—the generation that kicked off the new town movement. That generation built 32 new towns for their families and their children. Where would we have been without that? We would not have been as well off as we are today. This approach is different from a garden city approach. There is no doubt about that: there were only two garden cities and 32 new towns. Garden cities were created by a group of idealistic people, who many of us in this House—certainly those of us on the left in politics—would identify with, but they are not new towns. There

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were much clearer guiding principles, more rigorous requirements—both from architects and planners—and more involvement from people. The people who inhabited the new towns had a lot more involvement in their environment than we normally see today. Although I support the new town concept, I would like us to be clear that a couple of new towns will not solve our housing problem.

I am pleased to say that the development corporation idea has had some support since January. I came across a recent report from the Housing Forum—a cross-sector, independent housing organisation—that said:

“While recognising the importance of both local authorities and housing associations, there is a limitation to the speed and scale that can be delivered within the confines of their operations, both geographically and operationally”.

The Housing Forum has tried to learn lessons from the London Docklands Development Corporation, which it felt did a good job by doing things such as bringing together local authorities, overcoming difficulties with planning permission, grant giving, using compulsory purchase order powers and overcoming all kinds of issues that probably no company would have on that scale today. It created 24,000 new homes, which does not sound very many to me, but still.

The Housing Forum’s report continues:

“As we continue to struggle to corral a complex and poorly functioning housing market to deliver new homes, it could be that a major interventionist approach will ultimately be the only way of bringing the key components of land, finance, planning and purpose together”.

We should think about that. That is basically why I am on my feet today. Of course, that is not the only solution. Some commentators really annoy me: somebody comes up with an idea for a new town or a garden city and the commentators say, “It has to be brownfield sites”. Nobody says existing cities would not be developed on brownfield sites. As mentioned by the noble Lord, Lord Wrigglesworth, you would not look at developing new towns in the north of England today; you would look at developing on brownfield sites in the inner city. We need both policies to run together; we cannot have a one-policy solution.

As I come to the end of what I wanted to say—I am sure you will agree it was not very much—I want to make one point; sometimes you just have to get up and make one point and that is okay. I just want noble Lords to hear this. As I read about and observe what is going on in our society and in our homes, probably like a lot of noble Lords I feel anxious and upset about what people are having to go through. When I see houses and apartments that are vehicles for profit or pensions, and not for people who need buildings to live in—they are locked out—I get really angry. I would like to see an elected politician—probably a Prime Minister or a leader of the Opposition, somebody with power who the people will listen to—stand up and say, “What we want in this country, what I want to deliver for you, my British friends, my electorate, is world-class housing for this country”. Our politicians said they wanted a world-class Olympic Games and they delivered it. We have sent our England team to play in the World Cup. Did we say we want them

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to come second or third? If we are lucky we might do that, but are we not sending the team out to be the best in the world?

We have the best architects in the world: Rogers, Hadid, Foster and many more. When they travel the world, and as they build these beautiful new buildings, what do they say to their clients when they ask, “But haven’t you got one of the most problematic housing markets in the developed world in your own country?”? They have to say, “Yes, we have”. I say, why do they not help us to solve our problem? Why do they not talk about world-class housing for people who live in this country? Maybe the Prime Minister will use the Wolfson report to make that point. I am very much looking forward to that. Maybe the leader of the Opposition will use the Labour Party’s equivalent, the Lyons review, to say the same thing: that we want world-class housing. Maybe he will not: maybe we will just get more housing reviews.

2.28 pm

Lord Tope (LD): My Lords, as I am primarily going to talk about local government I should begin by declaring an interest as a vice president of the Local Government Association, but for the first time in nearly 20 years in your Lordships’ House I do not have to declare an interest as a councillor in the London Borough of Sutton. I hasten to add that that was by my choice, not the people’s choice. I felt that 40 years was enough and I did not seek re-election.

However, I was invited to the first Liberal Democrat group meeting on the Saturday morning after the election. I like to think I was invited to give some fatherly advice to all the newly elected councillors; the truth is, I was invited because I was the only one they could find who knew how to conduct the group elections by the single transferable vote. I went into the too-small room and saw before me the 45 newly elected and re-elected Liberal Democrat councillors. The nine Conservatives remaining were in a cupboard down the corridor having their group meeting, which took about 10 minutes—they sacked their leader.

The thought that struck me forcibly for the first time as I looked at our new 45-strong Liberal Democrat group was just how much it looked like our local community. For years now, we have had a pretty good gender mix, which is still there and still strong. We have had, for borough population, a better than average visible ethnic mix. I could see from the family names of the newly elected councillors that they reflected a fair number of European countries. I saw a mobility scooter parked at the door, and I happen to know that at least two of our newly elected councillors have been assisted by a scheme to help people with disabilities to attain elected office.

However, what struck me most forcibly and what was new was the age range of our new councillors. At least five of them were under 30, which, I am sorry to say, these days is quite an achievement. Of particular pride to me was the fact that several of those new young councillors had been born in the borough when it was run by the Liberal Democrats. They had been at the schools in the borough when it was run by the Liberal Democrats and now they were there as part of a Liberal Democrat administration. I understand that

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my Conservative and Labour friends will think that there is nothing unusual about that, and indeed in many areas of the country that is not unusual for their parties. However, for my party it is not just unusual but unique, so I was very proud of that. The Liberal Democrats were expected to retain control of Sutton council, so when we did it really was not news. There was much more news in relation to places where we were not retaining control and to some places where, sadly, we were not retaining councillors at all.

However, I wondered why nobody asks why an outer London suburb of 200,000 residents and no particularly distinguishing characteristics has elected a Liberal Democrat council eight times over for 32 consecutive years. I wondered even more why for half of that time—for 16 years—it has elected Liberal Democrats to more than 80% of the council seats. We still support proportional representation; we would just like one or two other councils to join in the experiment.

I say all that not just to boast—although I feel that I have something to boast about—but because I think that having the answers to those questions would certainly be a service to my party and might offer some lessons for politics and politicians as a whole. It is a truly remarkable achievement. If any of my noble colleagues are also wondering about the answers to those questions and are perhaps thinking of commissioning a poll, I shall be only too happy to suggest the questions and to co-operate in finding some of the answers.

I now move on to the subject of local government more widely and more generally. Local government represents roughly 25% of public expenditure and therefore it is inevitable and fair that it should have had to bear its share of reducing the deficit. Indeed, as my noble friend Lord Wrigglesworth said earlier, with the ring-fencing of education and health, it is even more inevitable that much of the brunt of deficit reduction will fall on local government, and that has happened. I cannot honestly say that local government makes no complaint about that. For as long as I can remember, it has always complained about the financial settlement, regardless of who are in government and regardless of the financial situation. However, I believe that all parties in local government generally have done remarkably well in coping with their share, or perhaps more than their share, of the deficit reduction. I recognise and accept that, and I always have done. My main regret looking back—and I said it at the time —was that it was so front-loaded and that so many of the deficit reduction measures for local government happened in the first two years. I say that particularly because truly transforming services and local government cannot be done in a hurry under the pressure of having to find immediate and substantial budget cuts. It takes time. With hindsight, and perhaps not just with hindsight, I would rather that we had been given the full four-year period to meet the same targets.

I now want to look to the future. For most major local authorities, the worst is yet to come. We know now that for most authorities the financial year 2015-16 will be the worst so far. The relatively easy budget cuts have been made. I say “relatively easy” because many of them have not been easy at all, but relatively they have been. What are left now are the severe cuts to public services, and all authorities, of whatever political

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persuasion, will this year—not next year—struggle with having to make difficult, controversial and inevitably unpopular budget cuts.

I understand and wholly accept that there have been significant and disproportionate effects on some sections of the community, but I do not think that the greater majority of residents all over the country—north and south—have been personally greatly affected by budget cuts. That is going to change over the next 12 months and it will happen during a period in which the coalition parties, certainly, will be trying to convince the public that the recovery is on the way. They will be trying to convince them that the past four years of hardship were worth it because the recovery is starting, but that is not likely to be the local experience.

That is clearly an issue for my party and our coalition partners but I do not think that I will see any wise Labour Party people rejoicing either. They will know that those budget cuts are being made in the town halls, and it is at the town halls that people will be protesting to those making the unpopular decisions. In most cases now—sadly, from my point of view—it is Labour councillors who, first and foremost, will get the blame. There is nothing in that for any of us. The outcome will inevitably be even more public disillusionment and disengagement and all the effects that we know only too well will come from that. I feel very sad to give a gloomy but inevitable prognosis for the period up to the general election.

There is one particular issue on which I want to comment. For a local authority, being able to raise income is often a better choice than cutting a budget. It needs to be done proportionately and fairly but, if it is done to raise greater income and thus avoid greater cuts, that surely is usually a better option. Yet, so often when a local authority embarks on that course, Ministers complain about it. I shall take one recent example, although there are many. Charging for the collection of green garden waste in a local authority—I think that it was probably in Birmingham—was recently criticised by CLG Ministers and by one in particular, and it is an issue that many of us are going to have to look at. However, it is a discretionary service; there is no requirement on local authorities to collect green garden waste. To paraphrase the noble Lord, Lord McKenzie, it is, if you like, a service paid for by the poor to provide to the rich. I use both those terms relatively, but all those who live in flats or small houses with small or no gardens are paying through their council tax for a so-called free service to those of us who are fortunate enough to have large gardens and silly enough not to do sufficient composting. At any time but particularly under the current financial constraints, what on earth is wrong with charging for that service? Why does the Secretary of State suggest that there is something wrong with it and why—I can probably guess—does a local Conservative MP choose to describe it as a stealth tax? I would have thought that it was anything but stealthy. I think that Ministers need to think about their attitude towards this.

One particular area of charging which is, and always will be, controversial is parking. Earlier this year, the Department for Transport carried out a public consultation on local authority parking strategies. I think that if there is one subject that should be left

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to local authorities, it is parking; nevertheless, the Government, and the Department for Transport in particular, have carried out that consultation. At this stage, I am not going to start a debate on parking but the end of the consultation document states:

“A summary of responses, including the next steps, will be published within three months of the consultation closing”.

The consultation closed on 14 February. The analysis of the results and the next steps should have been with us before 14 May. I looked on the website last night to see that the results are still being analysed. I have seen quite a lot of the results. I suspect that the analysis is not taking very long. Probably what is taking a little more time is what the next steps will be. I do not suppose the Minister is likely to tell us those next steps this afternoon or will drop just a few hints, particularly about the use of CCTV cameras, which is causing much concern. If nothing else, perhaps she will tell us when we will have the analysis of the results and, even better, when the Government will decide on the next steps. Best of all, will they decide that it is best left to local authorities to decide for themselves?

The greatest welcome from local government for this Queen’s Speech is that there is no significant local government legislation in it, although a number of Bills, such as the Deregulation Bill and the Infrastructure Bill, are of particular interest. As has been said several times already today and no doubt will be said many times more, our real interest is in the Queen’s Speech after the next Government have been elected. We will see from whoever is in government whether they have a commitment to the devolution of power, which must mean a devolution of revenue raising and spending, and whether that really will be in the next Queen’s Speech.

I conclude with the comment that, based on the election results two weeks ago and most opinion polls for a long time now, the party most likely to be in government in a year’s time is the Liberal Democrats.

2.42 pm

Lord Northbrook (Con): My Lords, at the start of his speech, the noble Lord, Lord Tope, talked about commissioning polls. May I advise him that he may need to be careful after recent Lib Dem experiences in this area? Like the noble Lord, Lord Razzall, I shall concentrate on the general economic situation rather than look at details of the Bills in the forthcoming Session. The gracious Speech comes after a generally very well received 2014 Budget. The economy continues to recover. Latest official figures showed the UK economy growing by 0.8% in the first quarter of 2014. Forecasts continue to be revised upwards. Only last Friday, the British Chambers of Commerce became the latest organisation to upgrade.

According to the Financial Times, the chambers now expects GDP growth for 2014 to be 3.1%, which is up from its previous forecast of 2.8%, continuing the strong forecasts of the first quarter and, if achieved, the highest rate since pre-crisis 2007. Separately, the CBI’s latest growth report suggests the UK economy has continued to perform strongly in the second quarter of this year, with the growth survey of its group reaching a record high, making it the best reading since it started gathering data in 2003.

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At the time of the Budget, the Chancellor highlighted the Office for Budget Responsibility’s forecast for GDP growth. The annual budget deficit is coming down and the borrowing target for 2013-14 was reached. The unemployment rate is continuing to decline. Inflation forecasts remain low. Therefore, the economic background continues to improve although there is still a long way to go. Quite rightly, the Budget focused on measures to help business as well as giving important help to savers and taxpayers mainly at the lower end of the tax scale.

Looking overall at the UK economy’s improvement, a year ago at the Budget the Chancellor said that the OBR’s forecast for 2014 GDP growth was 1.8%. It is now 2.7%, which was a good sign of recovery. The 2015 figure also was adjusted upwards. Annual borrowing is also showing a marked improvement. Britain borrowed a horrendous £157 billion the year before the coalition came to office. As was pointed out by my noble friend Lord MacGregor of Pulham Market, the noble Lord, Lord Adonis, in his speech failed even to mention this by way of background to the coalition’s deficit reduction strategy.

In 2014-15, the OBR said that the budget deficit will fall to £95 billion. Although it has taken longer than expected and there is a long way to go, it predicts that it will fall to £18 billion by 2017-18. According to the Red Book, interest payment savings on the debt over this Parliament are expected to amount to around £10 billion per year by 2015-16 as a result of the Government’s consolidation plans.

Unemployment figures also show an encouraging trend. The latest jobless figures published last month show that the number of people out of work fell to the lowest figure for five years. To put this into a longer period context, according to the Office for National Statistics, at the time of the Budget, employment was up by nearly 500,000 people for the year ending January 2014. According to the Budget speech, 1.3 million more people were in work than when the coalition came to power in 2010. According to the ONS, the claimant count fell by 24% in the past year, which is the largest annual fall since March 1998 according to the Budget Red Book. Youth unemployment went down by 58,000 in the past year, which also is a good sign. I applaud the imposition of the welfare cap linked to inflation, which I see is now supported by the Opposition, although I know that cyclical unemployment benefits are excluded.

The next area showing an encouraging recovery is manufacturing. The latest survey on UK manufacturing, published on Monday, stated that UK factory output is continuing to enjoy one of its strongest growth periods for 22 years according to a Markit/CIPS publication. The latest CBI industrial trends survey, published on 22 May, stated that the UK manufacturing sector remained solid in May and that output is expected to rise strongly over the next three months. The CBI quarterly industrial trends survey, published in April, stated that business optimism among manufacturers saw its sharpest improvement since 1973 on the back of strong growth in orders at home and abroad. Encouraging news also appeared in March on manufacturing pay deals. Pay settlement figures in

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manufacturing rose to 2.6% in the first quarter compared to last year’s average of 2.4% in the latest sign that the squeeze on living standards is easing.

The services sector is also showing a good recovery. The latest Markit/CIPS survey stated that the UK’s dominant economic sector grew at a faster rate than expected in May while employment in the sector stayed at the 17-year high recorded in April.

As other noble Lords have stated, another economic indicator performing favourably is inflation. The OBR forecasts that it will fall below the 2% target in 2014 at 1.9%, and will not exceed it at any time before 2018. Tuesday’s latest figures confirm the satisfactory trend.

In the 2014 Budget, there were welcome measures to help business. As the Chancellor said in his speech, when the coalition came to power the corporation tax rate was 28%. Very shortly, corporation tax will be down to 21%. The corporation tax rate cut has been a great help to companies, as has been an innovative move to benefit pharmaceutical companies and others with the new patent box tax regime. The second major boost for business in the Budget was the increase in the annual investment allowance from £250,000 to £500,000 till the end of 2015. This was warmly welcomed by the manufacturing and agricultural sectors.

The third major area of help was company energy costs. The Chancellor can be congratulated on producing a £7 billion energy package that will cap a green tax and shield companies from rising renewable energy subsidy costs. The major manufacturing trade body, the EEF, and the employers’ group, the CBI, have praised all the above as well as congratulating the Chancellor on his apprenticeship funding, changes to the R&D tax credit regime, the extra support for UKEF to boost exports and the decision to make permanent the seed enterprise investment scheme, which is such a help in financing new start-ups.

I now move on to measures for savers. First, I warmly welcome the Chancellor’s proposals from 2015 with regard to pensions, allowing investors free access to spend or invest their pots as they wish once they have reached the qualifying age. I remember occasions when this was nearly achieved in the past but fell at the last fence, so I am delighted to see the Chancellor finally acting to give pension savers their freedom. Also, I welcome the new pensioner bonds for those over 65, paying up to 4% if held for three years.

Next, I warmly welcome the Chancellor’s plans to extend the ISA limit to £15,000 and the merger of the cash and shares ISAs. According to the Daily Telegraph, these tax-free accounts are now held by 24 million people. Sensibly, in a separate move, the Treasury has also allowed, encouraged by a campaign by the noble Lord, Lord Lee of Trafford, and myself, AIM stocks to be included in ISAs.

I also welcome the abolition of the 10% tax rate on savings for certain savers and basic rate taxpayers. The increase in the personal allowance is most welcome too—up to £10,500 next year from £10,000. The limited increase in the starting level for the higher-rate band is also welcome, but more needs to be done to uprate this in line with inflation and, over the long term, consideration should be given to bringing the top rate down to 40%.

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Turning to the most gracious Speech, I welcome the small business, enterprise and employment Bill in particular, which has been welcomed by the CBI among others. I welcome the updated Charter for Budget Responsibility and was impressed by the Minister’s remarks on infrastructure projects with regard to planning, roads and shale gas. I was also attracted by the idea of the noble Lord, Lord Birt, for an independent commission for major infrastructure projects.

In conclusion, the Government have been right to stick to their course on deficit reduction. I listened with interest in the March economic debate to the ideas from noble Lords opposite that there should have been increased government spending earlier in the Parliament, but these do not seem to have been generally repeated today. That would have been a dangerous course because the markets could well have been upset by a perceived lack of control on government finances. The recovery is heading in the right direction. There is still a long way to go, but the coalition’s approach has been fully justified.

2.52 pm

Lord Lea of Crondall (Lab): My Lords, after that Panglossian account, I wonder whether the noble Lord who has just spoken was knocking on the same doors as I was a couple of weeks ago. Many Labour politicians who were knocking on doors found a deep sense of insecurity right across the country, apart from in London, where the experience is generally not the same as that of the rest of the country. All the statistics show that—not least the fact that house prices in London are double the rest of the country. The rest of the country more or less moves together.

There is no easy way to fix this, but fix it we must because otherwise we will be left in the position of those people on the continent who remember the 1930s. I remember that when I was on the Bruno Kreisky commission on unemployment in Europe one wise old bird said, “Well if people don’t believe that politicians can do anything about their insecurity in employment, why do we need any politicians?”. That has dangerous implications. I do not want to exaggerate, but the malaise is not unrelated to some of the types of data that we have been hearing about. I will give two examples.

Involuntary temporary and part-time workis growing, but the actual numbers are startling. I was going to say, “Hands up who know that the ONS has shown that these categories of involuntary temporary and part-time work have risen by 66% and 103% respectively since 2008”. A new analysis by the ONS of zero-hour contracts shows the scale of insecure work. There are 1.4 million such contracts—or 2.7 million if the 1.3 million contracts for people who are reported as doing no work over the two-week time period used for the analysis are included.

There is another example of an unjustifiably satisfied gloss being put on the state of our economy at the moment. I pick up the point that arose from a remark by the noble Baroness, Lady Noakes, with whom I always enjoy crossing swords on these occasions. It is true, as she said, that no major advanced economy has grown as fast as we have in the past 12 months. But the explanation for that is very largely that, in the vernacular,

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if you dig a bigger hole, you have to grow faster to get out of it. I will give you the statistics. If we look at the total position of the British economy and the German economy from the same benchmark starting date of the same quarter of 2008, our position as of April is that we are still two thirds of 1% lower than before we fell off the cliff. We are still below the peak. Germany, from the same benchmark starting date, is now 3.83% higher than before the peak. That is the relevant statistic—not how fast we are growing in one or two quarters at the present time, welcome as that is.

Baroness Noakes: I am fascinated by what the noble Lord said. Could he remind noble Lords under which Government the hole was dug?

Lord Lea of Crondall: It was Lehman Brothers what dug the hole, if we want to get to that level of sophisticated debate. Gordon Brown was the most courageous statesman in the world in stopping it being even worse than it was. The noble Baroness represents the flash boys in the City and so on as part of the ideal economy, but I would say that it is those people what created the crash. Unless there are any more questions I will proceed.

We had a 7.2% fall from the peak, as I think my noble friend Lord Adonis pointed out.

One party in the coalition Government was the party of Disraeli, who famously referred to one nation. We are losing a sense of one nation and I would like to hear a little more from the Benches opposite about whether they do not think that there is a deep, chronic problem now in talking about one nation. Of course, there are three or four dimensions of it. There is the regional dimension, which I will come to, and top-down, education and social class. We all know that you can measure all the interactions until the cows come home. However, it would be foolish to deny the absolutely extraordinary change in the degree of inequality in this country over the past few years. We have now gone back to before 1945. I am holding up a graph which normally hangs on my wall. It looks like we are climbing Mount Everest, having last seen a similar peak of this ratio before the Second World War. That is not conducive to one nation or to a healthy economy.

I want to talk a little about the structural problem that is reflected in the contrast between the two economies in the United Kingdom: the London economy and the non-London economy. All the figures for the non-London economy of the UK correlate to some extent and show that the London economy is nothing like that of the rest of the UK. A brilliantly argued and well researched report by Deutsche Bank Securities published last November reached the conclusion that,

“there was less correlation in growth patterns between London and the rest of the UK than between the different members of the eurozone”.

It is hard to believe that, but it is pertinent to another point that will immediately become obvious. What are the implications of this? How many people in this House, particularly those on the Benches opposite, which have one or two more Eurosceptics than there are on the Labour Benches, have argued that the economic growth patterns seen in the eurozone mean

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that it is not possible to have a single monetary policy or any sort of economic governance? Based on that criterion, what if I were to say that we cannot possibly govern the United Kingdom? Would it be said in this House that we cannot possibly govern the United Kingdom?

Lord Flight (Con): I thank the noble Lord for giving way. Is not the crucial point that within the United Kingdom there are transfer payments worth at least £70 billion per annum from the more prosperous south and south-east to the less prosperous north, Scotland, Wales and Northern Ireland? The problem in the EU is that Germany is unwilling to make transfer payments to the less prosperous parts that are unable to compete with that country.

Lord Lea of Crondall: If that is the reason why the noble Lord does not agree with the eurozone, I would say that over recent months Angela Merkel and her friends over there have been ready to put their hands in their pockets to do what it takes. It is all to do with the single market and having a single currency. I think that this could be a diversion; I am just drawing attention to the fact that the United Kingdom is in the same position. The transfer payments that we need now are becoming a huge challenge, given the rates of return—unless you count what might be called the external economies such as HS2, which I strongly support.

I strongly support the infrastructure proposals for our roads, but I would say to the noble Baroness, Lady Kramer, that she should note that the graph detailing major road expenditures over both Governments has gone up and down even more dramatically than the Blackpool Pleasure Beach attraction to which the noble Lord, Lord McNally, earlier referred with such nostalgia. We cannot have sudden switches on and off for road expenditure—I was going to say something unparliamentary—with not much in other periods.

What are the policy consequences? Someone who sits in this House but is not with us today said something about getting on your bike. Getting on your bike is fine, of course, if you want to go and work in London. But we know that there is a terrible dilemma around the green belt, town and country planning, and more growth in London relative to anywhere else. I strongly support what the Government have said about HS2 tying up with the Northern Hub. Infrastructure plans, as well as other subventions in terms of training, the labour market and so on, have to be somewhat disproportionately higher than for what might be called a private rate of return. If you were a private enterprise running education in Bolton, you would have to deal with this on a broader basis. I would ask the Government to consider whether they appreciate the scale of transfers which have to be made, which must also come with a challenge to enterprise to respond.

One nation is receding from us—hence the malaise, insecurity, lack of full-time jobs and so on. Mr Miliband has been mentioned and I will refer to him. Only Mr Miliband has the analysis that will lead to the policy with which the next Labour Government will be able to make a significant improvement to these structural problems.

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3.07 pm

Lord Teverson (LD): My Lords, I take a particular interest in energy and climate change, so it was some relief to see in the list of Bills that we do not have another energy Bill this Session, the previous one having taken up most of the time of energy teams on all sides from the general election through to December last year. As my noble friend Lord Jenkin of Roding said earlier in the debate, there is relief that it is all about implementing quickly and effectively all the enabling secondary legislation that will be needed to make sure that our energy supplies in this country—hopefully renewable rather than non-renewable—are guaranteed, protected and in place over the next one or two decades.

Having said that, I particularly want to draw the Government’s attention to the fact that the latter parts of the Bill put much greater emphasis on the demand side of electricity markets, in contrast to the complete and utter focus on supply at the beginning. I ask my noble friends, Ministers and the Secretary of State in DECC to make sure that that momentum continues, particularly when it comes to the capacity mechanism that is out to consultation. A number of important decisions will be made fairly soon on demand-side management, and the demand side should be taken fully into account so that we can benefit from the investment that will lead to further reductions in electricity costs as well. I hope that that emphasis will remain strong.

What we have in the Infrastructure Bill, as has already been mentioned by many noble Lords, is fracking and being able to exploit that resource and get around the legal difficulties and hurdles that there are at the moment. I support this in principle. I think it is quite a difficult message to sell, because stating that you are going to take away people’s rights, even though the fracking will be at a greater depth than 300 metres underground—I think that is the proposal—will mean that there are concerns. It is a way forward through which we can exploit our resources effectively. It has been true of other areas of energy already. However, we have to make sure that the environmental controls on gas from those unconventional sources are absolutely tight, that they work completely effectively—not just partially—and that people can have complete confidence in the environmental checks as that industry starts to work.

Again, we have to remember that gas can only be an intermediary fuel in the UK’s energy mix. I suspect that it is unlikely that we will have a lot of gas that will benefit from carbon capture and storage, or from other ways of taking carbon content out of gas, so it is an intermediary technology. Nevertheless, as illustrated many times by my Conservative colleagues, we have seen that by introducing more gas into the generating mix in the short term, the United States, which is still the largest economy in the world, has managed to reduce carbon emissions quite significantly. I may come back to that theme later on.

What intrigues me from a renewables point of view, as someone who lives in the far south-west, is that the logic—forgive me, I was going to say spin, but I am sure it is not—of this particular development and legislation is also about helping geothermal generation,

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not just of electricity but of heat. I hope that my ministerial colleague in her answer will state or confirm that with the increased profile of geothermal energy in the gracious Speech we will have further action from the Government in promoting this technology—not just through the renewable heat initiative, which has started to work very effectively, but in terms of electricity generation. We have a fantastic resource, which is completely renewable and not an intermittent power source either. From that point of view, I hope we will see a brighter future for it.

The other area I wanted to move on to is that of zero-carbon homes, which is a DCLG issue as well as one of energy and environment. I am interested to read the proposals as they are published on that, because we have had a target—set, I think, by the previous Government—for the number of zero-carbon or carbon-neutral homes by 2016. That was a very important target but one that was always under threat from the temptation to dilute it as we approached that date. I am very pleased indeed to see that the Government have reaffirmed their intention to meet that target and maybe to meet it in a more practical sense. Through what they describe as “allowable solutions”, there are ways outside that particular development to make sure that overall, maybe through community energy schemes and that sort of thing, developments are carbon-neutral. In particular, I press on the Government and my noble friend the need to make sure that those definitions and restrictions, and the allowances to move away from the building itself being zero-carbon, are interpreted strongly and really are delivered. If that is the case, it will be a sensible way to move forward in this area.

However, I am concerned that there is an exclusion around small developments. No one would wish to promote smaller developments more than I do. I live in a village community. I think it was Prince Charles who asked why we do not have more small developments in village and other communities, as well as garden cities and new towns. I agree—we should have those smaller developments and they should be a significant proportion of the total housing stock—but it is dangerous to exclude them totally from this legislation.

One thing really worries me about this, given my business background. In a way, I can see that there is a sort of logic that says that smaller developers do not necessarily have the skills and are not necessarily able to apply some of these technologies. However, you then create a barrier to growth for those organisations in the future—in a way, this is where the whole construction industry needs to learn those skills and to be able to apply them. I will be testing that exclusion very strongly, because I think it is likely to be a mistake. We have learnt that the biggest mistake over the past decades, particularly in the 1960s and the 1970s, was to build homes that we have to spend an endless amount of extra money retro-converting decades later to make them suitable places that people can live in within sensible energy budgets in the future.

I was delighted with the part of the Speech—I am sure it was not supposed to be quite as marginal as it perhaps appeared—that said:

“My Ministers will also champion efforts to secure a global agreement on climate change”.

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This, perhaps, is the most important area for all of us that will develop in Lima in December this year at the international conference and particularly a year later in Paris, where we expect and hope—I certainly do—that there will be a new international agreement on climate change. The announcement in the United States by the Obama Administration that they will start to get tough on their own emissions was a major step forward in setting the climate, if I can put it that way, for those negotiations, not just with Europe and developing countries but with China in particular.

In the past week, I think, the final figures for EU emissions for 2012 came out, and there are already provisional ones for 2013. The 2012 figures showed that European emissions had come down by 1.3% and were very close to the Kyoto target for the European Union of 20% from 1990. That target will be met soon, but there were two major exceptions in those figures. One of them was Germany, where emissions had gone up. The other, I regret to say, was the United Kingdom: our carbon emissions had gone up 4.5% and our overall greenhouse gas emissions by 3.5%. They are coming down in 2013 but not by that amount.

Why is that? It is because, despite the fantastic work this Government have done in delivering renewables, we have moved from a primarily gas-based system of electricity generation to one based on coal. Just over 40% of our electricity is now generated by coal. Those coal stations are expected to move out of production over the next decade, but I ask the Government to redouble their efforts. Regrettably, they did not do this completely in the Energy Act, but they should make sure that while the UK promotes shale and alternative gas, at the same time the old dirty technologies of coal generation disappear. That way, our emissions can come down substantially once again.

3.18 pm

Baroness Jones of Moulsecoomb (GP): My Lords, I was not here yesterday but I listened very carefully and I was, quite honestly, very disappointed. The Bills that are coming before us offer nothing to the disadvantaged and nothing to the vulnerable. The poor and the disabled are virtually ignored, which means that these Bills will open up the rich-poor divide even more than it has been opened up already by this Government. It is a shame that this is happening, and the Government really have to deal with it. I will raise a few issues that I would like answers on and will flag them up as I come to them.

The idea of infrastructure is always very interesting. For decades now, new power stations, energy supply projects and so on have been put in infrastructure, which means they are relatively protected from funding cuts. However, energy efficiency programmes do not come under the infrastructure tag. Why not? A good energy efficiency programme means that you do not have to build the new power stations, so why is that not infrastructure as well? I would like an answer to that.

Secondly, I assume that all infrastructure projects are assessed for their economic, social and environmental benefits. Are they prioritised according to what is the most beneficial? Many of the policies in the Queen’s Speech do not have any concept of what is good for

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people and good for the planet. It is obvious that future spending restrictions on capital investment in infrastructure are going to be much less than in other areas, so we really need to put in as much as we can away from funding cuts. That is absolutely crucial.

Finally, the Infrastructure Bill seems to offer assistance to big oil companies and housebuilders but not to hard-pressed householders. It builds on the tax breaks that fossil fuel companies have already been given in the hope that they will find gas and sell it cheaply to bring down bills. If that money were given to householders to insulate their homes, that would be a much more efficient use of the money and, of course, overall much better for the environment. Hoping that the big companies will do the right thing is madness; it is a forlorn hope and we have to think about better ways to protect ourselves. We really should not be spending public funds on the extraction of fossil fuels that would be better left underground. The Government have not understood the IPCC’s recent report, which says:

“There is a clear message from science: To avoid dangerous interference with the climate system, we need to move away from business as usual”.

The Infrastructure Bill also gives new freedoms to the Highways Agency for road construction and introduces planning changes to fast-track developments. With the problems that we have already with our carbon emissions, building new roads is, again, absolute madness. I just do not understand how any Government could think that this is all right.

Global agreements on climate change are wonderful —we really need them—but they come to absolutely nothing if the Governments who are actually setting the policies and spending the money do not understand what climate change means. Specifically, this fracking trespass Bill introduces a new right of corporate trespass for oil and gas companies and threatens home owners across Britain because it will allow companies to run shale gas pipelines under private land without seeking the consent of home owners. I understand that the Prime Minister said today in the other place, in response to a question from Caroline Lucas MP, that it will not be legal to frack against a property owner’s will. Perhaps the Minister could clarify that point and tell me whether the Prime Minister is speaking for the whole party.

The fracking trespass Bill would also decimate our environment and climate infrastructure. It will not only make local conditions very bad because of the pollution that it will cause and the lorry movements and so on, it will mean the development of a whole new fossil fuel industry that will make it impossible for us to keep to our climate change targets.

Thirdly, this Bill suggests that the Government have already chosen National Grid’s slow progression energy scenario but have kept quiet about it. Perhaps the Minister could let me know if that is true. In 2012 National Grid released a report, UK Future Energy Scenarios, which gave three options. The first was “Slow Progression”, which assumed that climate change targets would be abandoned. The second was “Gone Green”, which was to meet climate targets. The third was “Accelerated Growth”, which was about meeting climate targets early. This Bill suggests that the

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Government have chosen the slow progression and have in effect abandoned the whole concept of climate change targets.

I will now say what I really would have liked to have seen in the Government’s plans for next year. There are four things. The Government could still introduce them. Perhaps we could discuss them afterwards if the Minister would like to take them up. The first is a fossil fuels divestment Bill, which would require the withdrawal of all public funds that are indirectly or directly supporting companies or activities involving the exploration and extraction of fossil fuels, domestically and internationally, and to reinvest all such funds in zero-carbon energy generation and energy conservation measures—a much better use of the money.

The second Bill would be a fair pay Bill, which would set a company-wide pay ratio of 10:1: that is, the lowest paid worker in a company should get 1/10th of what the CEO is paid. You pay the CEO whatever you think he or she is worth but you make sure that your cleaner or your security guard is paid at least 1/10th of that. That would start to rebalance the rich-poor divide that is widening under this Government.

The third Bill would be a public ownership Bill, which would promote public ownership of public services, introduce a presumption in favour of service provision by public sector and not-for-profit entities, and put in place mechanisms to increase the accountability, transparency and public control of public services, including those operated by public companies.

The fourth Bill would be a housing Bill to prevent rent increases above inflation for existing tenants and to increase security of tenure with five-year tenancy agreements. A little of this is being done in London and it looks as though it could be extremely successful. With the problems that we already have with housing in London, it would seem logical to produce something like this.

I do not want to sound alarmist. When I talk about destroying the planet, I am not talking about really destroying the planet; I am talking about destroying the little bit of the planet that we rely on for our existence. The fact is that if we do not take climate change into account, if we continue with business as usual, we are damaging not only our future but that of our children and grandchildren.

3.26 pm

Lord Horam (Con): My Lords, I pay great respect to the campaigning zeal of the noble Baroness, Lady Jones, on climate change and the environment. If I may say so, I share her concern for the environment. I was for six years the chairman of the Environmental Audit Committee in the other place. I hope that we managed to push climate change a little bit up the media agenda during that time. As it happens, I was born in the Bowland area of Lancashire, where fracking for gas has had its first trials. I have therefore studied the issue rather more closely than I have others.

I have to say that although I respect the point of view of the noble Baroness, Lady Jones, I fundamentally disagree with her on fracking. It seems to me that it will actually lead to greater energy security for this country, it will help with fuel poverty and it will help

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by creating a new industry—and we badly need to rebalance the economy. It will also help with climate change. One can argue about that, but I think that the dash for gas did help with climate change in the past and this will help in the future. Looking at the local situation in that rather beautiful part of the country, the Bowland area of Lancashire, it would do no more damage to the immediate aesthetic of the environment than do electric pylons and wind farms, to take two examples.

Therefore, I support my noble friend’s remarks in his opening speech and what the Government are doing on new measures to help fracking. I was glad to hear from the noble Lord, Lord Adonis, in his opening speech, that the Labour Party also supports this. It is profoundly in our national interest that the reserves underneath our feet should be exploited, whichever party is in power, frankly.

One thing I liked about the Queen’s Speech was that it was relatively short. I am all in favour of brevity—I hope I do not disprove that with the length of my speech now—particularly in legislation. This may be a product of advancing age but I like to think it is actually a product of advancing wisdom. If we have fewer Bills—I think 11 are promised in this Session of Parliament, although no doubt there will be a certain amount of creep in addition to that—against 28 in the previous Session, which is quite a reduction, it means that Bills can be both better drafted and better scrutinised by your Lordships’ House. I also think it will mean less time spent by Ministers rushing around dealing with issues in Parliament and more time for good governance.

It is good governance that really matters in this country at the moment. More than ever, if we look at the global situation with China, Russia, India and so forth developing as they are, the UK needs excellent governance and I believe that in the present coalition we have a good, radical, progressive Government who are doing broadly the right thing. An example of that is how on the very first day of the Queen’s Speech debate they have flagged up the issues of infrastructure, transport, energy and local government that are at the heart of the need to improve things—as the noble Lord, Lord Birt, and others said in the debate—together with skills and education. They are the twin tracks of necessary improvement which we need to grasp very firmly.

As regards transport, first, I am delighted that my noble friend Lady Kramer has at last got a task worthy of her talents and that she has thrown herself into it with such evident enthusiasm. I am a strong supporter of HS2, at least partly because, as I said, I am from the north of England originally. I was born in Lancashire, educated in Yorkshire and for 13 years I represented a constituency in the north-east of England. I am a sort of northern mongrel, but I therefore claim to have some understanding of the problems of the north. Transport-wise, what the north needs is good connections with the Midlands and the south. Good connections will enhance people’s confidence in that part of the world in building businesses in the north.

At the moment, rail capacity is strained to the limit and, indeed, beyond. There are queues at Euston and King’s Cross at certain times of the day. There is no

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doubt that we need new capacity and that, just as Ernest Marples, many years ago, started building the new motorways separate from the old trunk roads, we should build a new rail route that is distinct from the old Victorian lines. There is really no alternative.

None the less, I am conscious of the demands which HS2 will make on the communities and individuals affected by the route, and I believe that the Government should be generous in those circumstances—they never have been generous enough in the past—in terms of both mitigation measures and, where necessary, compensation. The only thing I found odd about the recent review by Sir David Higgins is that he thought that the link between HS1 and HS2 at Euston and St Pancras should be reconsidered. That baffles me. I thought that part of the point was that you could get on a train in Birmingham and get off at Brussels. Nigel Farage may not agree, but to me that makes total sense. I hope that my noble friend will reconsider that and keep it in the programme.

In addition to greater rail capacity, we need more motorways and trunk roads. On a journey to the Ribble Valley up the M6 in the recess, I was struck once again by how the slightest hiccup—a small accident or some roadworks—can reduce the traffic to a stationary state for mile after mile. Many motorways are now often a nightmare to travel on. I am not an advocate of predict and provide but, none the less, we need more provision. I was pleased by the sentence in the Queen’s Speech on that and by the further details indicated by my noble friend in his opening speech, although I have to say that the point about the A14 made by the noble Lord, Lord Adonis, is absolutely relevant. I opened the Cambridge section of the A14 when I was a Minister for Transport 25 years ago, one grim pre-Christmas day, and it has crawled and stuttered along since then.

Then there is the thorny question of London’s airport capacity. Obviously my noble friend will not be able to say much about that because the situation is under review, but from the perspective of someone who is not only a northerner but has been an MP for a London constituency during my career and has run an international business from London, I have no doubt that we need a third runway at Heathrow.

I was in Dubai recently. Dubai has recently taken over from Heathrow as the busiest international airport. Paul Griffiths, the English managing director of Dubai Airport, has taken it to the top in seven years and is worth listening to on the subject of the third runway. His opinion is that Heathrow must have a third runway, even though it will mean more competition for Dubai. He said in the Sunday Times recently:

“Britain needs it, and Heathrow is the right place for it. It is close to London and close to all the major motorways. An airport”—

this is significant—

“is only as good as its ground transport links”.

I hope that Sir Howard Davies and my noble friend are listening. Again, one has to be sympathetic to local noise problems, and really good compensation—I hear talk of 25% above pre-blighted market value—is the right approach.

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Finally, I turn to housing, which has been much commented on during our debate. The Government’s Help to Buy scheme has undoubtedly kick-started construction, and I also support garden cities, but those initiatives by themselves and the other small ones cannot hope to fill the gap of about 200,000 homes a year that we need. That can come only from a concerted, Government-led effort involving housing associations and local councils. More than two years ago I wrote a memo for the Government advocating that they emulate the 1951 Conservative Government, when Harold Macmillan was appointed Housing Minister and given the target by Winston Churchill of building 300,000 houses a year—it seems a miracle, does it not?—which he achieved in three years. Incidentally, Britain’s debt to GDP ratio at the time was 200%, so no excuses there.

Obviously, I accept that things have changed a lot since 1954 when Harold Macmillan achieved all that. The planning laws, in particular, have become much more complex, but as one who started a successful housing association back in the 1970s, I know what can be done if the political will is there and the incentives for housing associations and local councils are structured in the right way. I very much hope that the Government will bring forward an initiative of that kind in the not-too-distant future so that we can look at it in the context of the next general election.

So there are holes in the Government’s programme—in particular, on Heathrow and on housing—but, broadly speaking, they are moving the country in the right direction. All I can say is: please get a move on.

3.36 pm

Viscount Simon (Lab): My Lords, I should declare my interests as in the register, as I will be speaking about practical matters of concern which some might consider as coming into the subject of transport, but which were not covered in the gracious Speech.

The number of deaths and serious injuries on our roads was predicted to fall by 2030 in an academic study published by the Parliamentary Advisory Council for Transport Safety. I hope that that proves to be correct, but I have my concerns about sufficient suitably trained roads-policing officers being available to enforce the laws. I suspect that few noble Lords will have seen a marked traffic car on a motorway for a long time, and that is the same for criminals, who go from A to B knowing that the chances of being stopped are very remote. The number has been reduced and is being reduced further. In some areas, driver training has also been reduced. I wonder whether, in the not-too-distant future, there will be enough officers to train other officers in the special investigatory skills required following a road death or serious injury.

Further, as more emphasis has been placed on investigating serious accidents, the resource that does that has been withdrawn from roads, meaning that there is less deterrent to prevent such accidents. That is set, as I have already said, against a background of reducing the number of trained officers. Why are those reductions taking place? All police forces are having to reduce operational and administrative costs and, as the cost associated with running traffic operations is

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high, it is an area that is financially attractive to chief constables in assisting them to achieve the Government’s requirements.

The Institute of Advanced Motorists, under a freedom of information question on excessive speed, has drawn attention to the fact that there is a good need for a deterrent presence of roads-policing officers out there on the road, ready and willing to deal with those who misbehave deliberately. Driving at 149 miles per hour, which was the speed of one of the drivers mentioned in the article, is a deliberate act, not an error.

We all think that it is awful when we read of drivers with points over the maximum of 12, but there are some out there with more than 40 points on their licences. The information available to the courts needs to be up to date, but that is not always the case, I have been told. I draw the Minister’s attention to the fact that not only the DVLA but the courts need to be both efficient and quick in updating their records accurately.

I was interested to read a newspaper article about young drivers being involved in more road accidents than others as a percentage of all drivers. We all remember when we passed our driving tests and thought that we were the best drivers in the world but, since those days, road and traffic conditions have changed. The time is ripe for introducing special conditions to be imposed on young drivers and for them to have graduated licences. This is a road safety proposal and not, as the Government have stated, a restriction on their driving. We all know that, in time, we learn by experience and I hope that the Government will introduce appropriate legislation.

On a completely different matter, which has been raised, the European Union has proposed that diagnostic software chips are placed in all new vehicles in the near future, which would enable authorised people to interpret what a car and driver was doing at a particular time. This would have extremely useful implications, which I leave noble Lords to work out for themselves. I imagine that the insurance industry, the police and some other departments would welcome this, whereas certain motorists would say that it was an invasion of their privacy.

The Government’s efforts to make speeding and other driver misbehaviour gain the stigma of being regarded as anti-social needs to be maintained and not allowed to decrease. Much of that is about the visibility of ministerial and government leadership. At the moment we hear and see little of this, despite the huge total cost of road deaths and serious injury collisions increasing every year.

The Law Commission’s final report and draft Bill retains and strengthens the existing, two-tier system between taxis and private hire and sets national standards, which are based on those currently in force in London under the Private Hire Vehicles (London) Act 1998. I understand that the private hire industry broadly welcomes the proposed reforms and I look forward to the Minister confirming that the Government intend to bring forward those proposals. It had been my intention to mention other disturbing matters, including the background to the proposed taxi demonstration on 11 June, but I think that I have said enough.

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3.42 pm

Lord Shipley (LD): My Lords, a number of speakers have said that this debate on the gracious Speech gives us an opportunity to assess the success of the coalition Government as they enter their fifth year. The speech reminds us that the Government have a long-term plan to rebuild our economy which, if it is to be achieved, requires further reductions in the deficit and continued low interest rates. I subscribe to that aim. The Government’s overall debt continues to rise and the only way of controlling and reducing it is to reduce the annual deficit. Of course, the deficit will be reduced if tax revenues rise but for tax revenues to rise we need growth, and growth will be encouraged by continuing low interest rates. That is particularly important for those parts of the UK which have higher than average unemployment rates. That is why I am pleased that the Bank of England did not seek to raise the base rate when unemployment fell below 7% nationally. The continued recovery needs low interest rates to encourage business investment.

In this respect, I am particularly impressed by the recent performance of the small business sector and welcome the small business, enterprise and employment Bill which, for the first time, specifically addresses the needs of the country’s 4.9 million small businesses. Small firms have been responsible for four in five jobs created during the three years between 2010 and 2013. In addition, nine out of 10 unemployed people either found work in a small firm or started their own business in that period. I welcome the proposals to help small businesses grow, not least in procurement policy, where Whitehall has been too keen to push procurement contracts towards large national companies, mostly headquartered in the south-east, and away from regionally based companies which are smaller but nevertheless have excellent track records in delivery and localised training. The test of that Bill will be whether the Government deliver their procurement ambitions. The Government say that they want to provide small firms with fair access to the £230 billion spent each year in the form of public procurement contracts, so I hope it will become clearer how this will be done when we discuss the detail of the Bill.

Overall, the recovery cannot just be about cutting the deficit and I welcome the emphasis in the gracious Speech on growth, infrastructure investment and access to finance, not least because the outcomes from Funding for Lending have been lower than we would wish. The Bank of England recently reported that Funding for Lending had fallen by £2.7 billion. In recent months, it has been only for business lending and not housing. However, the evidence seems to be that lending to SMEs has not been boosted. It could be that crowd funding and peer-to-peer lending are rising and accounting for part of that gap but it is vital that small businesses can borrow more from the banks.

The potential of the small business sector is very great. A few days ago I visited a small but fast-growing precision engineering company, Chirton Engineering, which is to host the new North East Advanced Machining Academy. The academy is the product of work by Tyne Metropolitan College, working in collaboration with Chirton Engineering, Tyne North Training and

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North Tyneside Council, and it will enable students to be trained to the highest of standards on specialist machines and ensure that apprentices are job-ready for their first day on the factory floor. What particularly impressed me was the integration of an expanding business with training and apprenticeships in engineering, and with excellent linkages to local schools.

I spoke earlier about the opportunity that this debate gives us to comment on the Government’s achievements, and apprenticeships are one of them. I congratulate Ministers, particularly BIS Secretary of State Vince Cable, on their determination to give young people the opportunity to learn on the job. Some 1.6 million apprenticeships have been created since the 2010 election, and I welcome the plan to build that further to 2 million apprenticeships by 2015. I do not want to be overcritical of the previous Government, but the Future Jobs Fund was expensive. Each placement cost up to £6,500 and created short-term placements, predominantly in the public sector. Half of Future Jobs Fund participants went straight back on to benefits after the six-month job ended. What this Government have done, and are continuing to do, is proving much more sustainable.

A number of speakers today have talked about the commitment in the gracious Speech to increase housing supply. I welcome that because the shortage of affordable housing, both to buy and to rent, is becoming critical. While there is some evidence that Help to Buy is not by itself creating a bubble in London and that it seems to be working in the regions, the fact remains that the affordability gap has risen to almost 10 times average salary in 2013. That is not sustainable.

The problem is a shortage of supply. Rightly, the Government plan to increase supply, but the question is whether they will provide the means at the same time as they desire the end. It is not just about reforming the planning system or, as the noble Lord, Lord Sawyer, pointed out, garden cities. It is about providing decent homes for all, which, together with a good education and a secure job, are the foundations of an inclusive society. The Government are planning to do something. It is good to see that they will provide support to smaller builders to develop new homes with a £525 million builders’ finance fund, which will deliver up to 15,000 homes on small sites. The problem is that too many small construction firms—two-thirds of them—closed down when the recession hit. It has become clear that more competition with larger firms is in the public interest. I am also pleased that the Government will introduce a £150 million repayable fund to support up to 10,000 new service plots for custom-build homes, and that there will be further reform to make it easier for empty buildings to be converted into new homes, supporting brownfield regeneration.

Welcome as all these initiatives are, I fear that they will not be enough to deliver the 250,000 homes that the country needs each year over the next few years to meet demand. The Government simply must use every means at their disposal to get councils building again. We have heard what happened in the 1950s and it is entirely possible to do that all over again. As a start, I hope that the remaining cap on local authority borrowing can be removed in its entirety. That would help.

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There is mention in the gracious Speech of Scotland, the case for Scotland staying in the UK and the implementation of new powers. The gracious Speech says:

“My government will continue to implement new financial powers for the Scottish Parliament and make the case for Scotland to remain a part of the United Kingdom”.

It is the first part of this that I want to look at more closely because I think it has profound implications for English local government. I declare my interest as vice-president of the Local Government Association. The issue is going to be this: once the referendum is done and dusted, who raises what taxation? Too often over the past two to three decades, the issue has always been that money is disbursed from London. We have heard from my noble friend Lord Flight about the £70 billion that is effectively transferred from London and the south-east, in terms of public spending, to other parts of the United Kingdom. That is a very large sum of money. The time is coming when all parts of the UK, if we are not to have a continued centralised state in London, are going to have to take greater responsibility for raising the sums that they spend.

There has been devolution in the past three years to local enterprise partnerships, to local councils and to combinations of local councils in the form of combined authority, but that question of who raises what taxation is rising up the agenda. I think that there is greater awareness of this now in England; there certainly is in Wales. There are pilots, of course, not least the Greater Manchester earn-back model, which gives Greater Manchester a half share in the increase of all taxation. However, English local government now needs to be fleet of foot and help to define and drive forward the devolution agenda, because we know from European experience that devolved power drives faster growth and we need to replicate that across the UK.

Devolution in transport funding is well under way and Ministers and the DfT should be congratulated on that. For one thing, it will require local areas to prioritise their projects. Wish lists are all very fine, but if local government wants to make a success of devolved powers it simply must be able to prioritise across council boundaries.

In conclusion, I shall say three things. I have been very impressed by the contribution of the Governor of the Bank of England. His points about inequality, the overdominance of London and the potential of a housing bubble in London have been well made. I am much more positive about London than some other speakers have been. It is possible that part of the growth of London is cyclical, but clearly not all of it is. London is producing high tax revenues that get recycled to others and a large number of jobs for people across the United Kingdom. For me, London’s success is a success for the United Kingdom. We have to bear in mind that London has a very strong economy, but the part of the UK that has highest rate of child poverty is immediately adjacent to the City of London and is the London Borough of Tower Hamlets, so the problems of equality are not just between London and the rest of the country but within London. These are major issues for politicians of all parties. There is clear evidence that, even if you take out expenditure on

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Crossrail, more capital infrastructure funding has been spent in London than in other parts of the United Kingdom. That needs to be reversed.

I note the comments that have been made about devolution. This Government have done far more than any previous Government on devolving to the constituent parts of England. However, it takes time to be a success. The process has been going for just over three years. One of the things I have learnt in the work that I have been doing is that you need a structure to devolve to. It often has to be a structure that transcends individual council boundaries. I see the city deals process and the local growth deals as a step in a long-term process that moves greater decision-making out of London.

Finally, I think we are starting to see the green shoots of growth in a whole set of ways. The gracious Speech identifies the strengths that this coalition Government have produced. As long as we bear in mind all the warnings that we have heard about rising inequalities, that growth agenda can continue to be supported.

3.56 pm

Viscount Trenchard (Con): My Lords, I thank my noble friend Lord Deighton for his excellent introduction to today’s debate and congratulate the right reverend Prelate the Bishop of Rochester on his excellent and thought-provoking maiden speech. Yesterday, I was able to listen to the excellent speech by my noble friend Lord Fowler, which was entertaining and informative, proposing the Motion for an humble Address. As he rightly pointed out, it is a great pity that our noble friends on the Liberal Democrat Benches were unable to support the totally justified constituency boundaries proposals. It is widely but mistakenly believed outside the House that their position on that was justified by the fact that your Lordships’ House declined to support proposals for its reform, whereas, as your Lordships are well aware, the quid pro quo for the parliamentary boundaries Bill was actually the referendum on adopting the alternative vote system, which was granted to our coalition partners but was decisively rejected by the electorate.

The gracious Speech states that the Government will work to promote reform in the European Union, including a stronger role for member states and national Parliaments. I trust that the Minister will make clear whether a stronger role for member states actually means repatriation of powers over certain areas of our national life. In particular, I believe we strongly need to recover full control of our financial markets and their regulation. The FCA and the PRA should sit at the same table as the EBA, ESMA and EIOPA and should not be subordinate to them. The latter three should be the regulators for the financial markets of the eurozone countries. The recent European elections, albeit on a low turnout, show clearly how important people think this matter is, and I look forward to the next Government being able to negotiate a better settlement with our European partners. It is a pity that negotiations with them cannot start until after the general election in May 2015.

In connection with that, I have to say that I do not think the adoption of fixed-term Parliaments has necessarily been a good thing. If we have to have

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fixed-term Parliaments, I believe the term should be four years rather than five. The average term of Parliaments since the Second World War has been rather less than four years, and those countries that have adopted the fixed-term Parliament system in the main provide an opportunity for the people to elect their representatives once in four years or less. In the United States, it is four years; in Australia, a Parliament can run for a maximum of three years. Furthermore, it makes our political life rather dull if there is no opportunity to speculate on the timing of the general election. Ironically, the absence of speculation on timing probably limits the power of the electorate against that of the Executive even though, theoretically, the reverse is the case. I understand the reasons why the coalition Government decided to adopt the fixed-term Parliament principle four years ago, but many people feel that this Parliament is already a little bit stale. It is a pity that the Prime Minister does not have the opportunity to go to the country for nearly another year. That is notwithstanding the notable achievements of the coalition Government in saving the economy from the disaster for which it was headed.

The next Conservative Government will need to start the urgent task of negotiating with the European Union as early as possible. To start only after May 2015 does not allow much time to negotiate both real reform to the structures of the Union and the repatriation of powers over matters better decided at the nation state’s level. This will be extremely complicated and needs to be agreed with our partners before a new basis for membership can be put to the people in the referendum promised for 2017.

Although I do not think that fixed-term Parliaments are a good thing for all time, I must congratulate the coalition Government on all that they have achieved in their four years to date. They have clearly confounded the sceptics who denied the reality of the recovery that has been taking place, and the reduction in the budget deficit has been much greater than many had predicted. This has been recognised by the IMF. Also, the employment statistics are most encouraging. It is heartening to know that we have recently been more successful than any other G7 country in reducing our deficit.

Although it is not the subject of today’s debate, the centrepiece of the gracious Speech was the proposals to reform the pension system. I believe that the automatic enrolment pensions which were introduced two or so years ago have met with only limited success. I ask the Minister whether these reforms to workplace pensions are intended to replace the auto-enrolment pensions or to supplement them. The Government’s press release states:

“By no longer forcing people to buy an annuity we are giving them total control over the money that they have put aside over their lifetime and greater financial security in their old age”.

I am very clear that it will give them greater freedom and control. As for greater financial security, I am not quite sure that that will necessarily follow.

I am not quite sure why the measures concerning pensions reform are not combined into a single Bill. The pensions tax Bill provides the freedom for individuals aged 55 or over to have free access to their savings held in defined contribution schemes subject to paying tax

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at their marginal rates at the time of draw-down. However, it is the private pensions Bill which would allow the Department for Work and Pensions to decide whether to allow recipients of defined benefit schemes similar access to their savings or not. While I welcome the Government’s decision to give individuals the right to access their defined contribution pension pots in principle, it is important that an appropriate health warning is provided to those exercising their new freedom. Those who buy an annuity today can still receive a return of more than 5% and do not bear the risk that they may not receive this return for the 40 years or so that they may well live after retirement. Those who withdraw their funds and invest them in managed funds or a mixed portfolio would do well to receive higher returns than they would from an annuity. The impression given recently by the media is that the pensions industry has been exploiting people’s savings by providing poor returns and applying hidden charges. This is less than fair. To purchase an annuity on retirement will still be the best course of action for many.

I note the Government’s plan to introduce a third type of pension: defined ambition schemes. Under these schemes, risks will be shared between pensioner and provider. It will be interesting to see in what terms “ambition” will be defined by pension providers and whether prospective contributors to such schemes will have similar ambitions.

The noble Lord, Lord Adonis, was too dismissive of many of the measures in the gracious Speech. The Federation of Small Businesses has warmly welcomed the small business Bill. The childcare payments Bill has also been widely welcomed. The Government propose to make childcare tax deductable to the extent of £2,000 per annum per child. This amount is, of course, not nearly enough, but it is nevertheless very welcome.

I strongly support the opinion expressed by my noble friend Lady Noakes that too little has been done to simplify tax and it is disappointing that the gracious Speech contains no Bill to achieve this. The combination of income tax and national insurance makes a great deal of sense. I ask my noble friend the Minister whether the Government will commit to move ahead with this.

I strongly agree with my noble friend Lord Marlesford in what he had to say about the EU financial transaction tax and hope the Minister can assure the House that London will be completely protected from the negative effects of this tax.

I strongly support the Government’s proposals to stimulate investment in shale gas projects included in the Infrastructure Bill. Shale gas can certainly provide an economic and relatively clean contribution to our energy mix. However, the best and ultimately most economic way to obtain energy security in the nick of time is to accelerate the development of new nuclear power stations. Hinkley Point is a start, but much more progress needs to be made soon with the other proposed projects.

It has been a privilege to participate in this debate. Even if this Parliament is already a little stale, we will have plenty to do. I look forward to the remaining speeches and especially the Minister’s winding up.

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4.07 pm

Baroness Thornton (Lab): My Lords, perhaps I may suggest to the noble Viscount, Lord Trenchard, that although Parliament may be stale, we in your Lordships’ House never are—we are always fresh.

Surely one of the tests of the efficacy of a legislative programme is what it does to our society and whether it offers more help to those who have not very much or to those who already have a great deal. I will be testing the gracious Speech on its effect on equality in our economy.

The government parties, not surprisingly, are very keen on a programme that appeals both to their own party members and to their electoral interests, and let us be clear: this gracious Speech is mostly about those things. On the other hand, we on this side are seeking more—much more—for families and individuals whose lives are often a struggle and who rightly feel that this Government do not have their interests at heart. How are they served by this legislative programme? What will this government programme do for the 1 million young people who are unemployed and were mentioned by my noble friend Lord Adonis in his opening remarks? I looked in vain to find anything. What in this programme will help people with disabilities who are struggling with the cruel complexities of Iain Duncan Smith’s welfare reforms? Again, I looked in vain.

What in this programme will deal with the fact that childcare costs have risen by 77% in the past 10 years? Of course I welcome the late-in-the-day proposal that tax-free childcare worth up to £2,000 is coming on stream. However, it is too little too late, and why not this year instead of next? Just one in five families will receive help through tax-free childcare. Some 4 million families on universal credit could be waiting until 2017 or later for any extra help. That is three times as many as the number of those who will benefit from the tax-free childcare scheme.

What is in this programme for the low paid? Many of them are resorting to food banks, because high rents and fuel bills and their low pay mean that they cannot afford all the food that their families need. I looked in vain for that, too.

Figures from the House of Commons, analysed by the TUC, reveal that, nationally, one in five jobs pay under the living wage. As is so often the case, the situation for women workers is even worse. The most striking example in this research is in Kingswood, in the south-west of England, where over 56% of women employees are paid less than the living wage. I looked at this legislative programme for what would help those women workers, but I looked in vain.

Like my right honourable friend Ed Miliband, I welcome what can be welcomed, particularly where Labour set the agenda anyway, as we did on the childcare proposals. On the national minimum wage, Labour has committed to raising it to a higher proportion of average earnings and to improving enforcement, with penalties increased to up to £50,000 for non-payment. So while we welcome the £20,000 penalty that is proposed in the gracious Speech, we do not think that it goes far enough. Labour has committed to banning exploitative zero-hours contracts, including ensuring

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that those who work regular hours month after month get a regular contract. Of course, we also welcome the ban in the Queen’s Speech on exclusivity clauses that stop workers on zero-hours contracts from working for another employer, but it does not go far enough.

On childcare, we have announced plans to help working parents with 25 hours of free childcare for three and four year-olds. The childcare proposals in the Queen’s Speech do not match our plans, and they do not make up for the childcare crunch of reduced support. On the gender pay gap, if this Government had continued to make the same rate of progress that we have made in government on closing the gender pay gap, women would get £177 a year more in their pay packets. As my honourable friend Gloria De Piero has said:

“David Cameron likes to paint a rosy picture when it comes to women in work but the reality for most women struggling with the cost-of-living crisis is that things are getting worse for them and their families”.

She also said that,

“44 years on from the Equal Pay Act being passed, women are still earning 80p for every pound men earn”.

Why is addressing the inequalities in our economy so important? I take women in our economy as an example of how counterproductive, piecemeal, traditional, short-sighted and often punitive the economic and social programme of this Government has often been. I draw on three impeccable sources—the McKinsey Women Matter series, the TUC and the Maternity Alliance. Every year since 2007, McKinsey has produced a report about the economic value of women in business and, particularly, in the boardroom. The TUC represents millions of women workers. Both organisations agree, in their own way, about the underperformance of the UK in the economy and business due to the barriers that women face at work. McKinsey has discovered that companies in the top quartile for female representation—the top 25% of companies in terms of the share of women on their executive committees—perform significantly better than companies with no women at the top. They have on average 47% higher equity returns and 55% higher earnings before tax and interest. Companies that have no women on boards earn less and perform worse than those with women on them. Diversity leads to prosperity.

I turn to the question of women’s representation in boardrooms, which has improved partly because of the work done by people like my noble friend Lord Davies in his report. I am very pleased and welcome the support that the Government have given to this and the targets that he set. I am very pleased about the increase of the number of women on boards in FTSE 100 companies, from 12.5% in 2011 to over 21% in May this year. That is to be welcomed. However, the fact that there are only four female chief executives in the FTSE 100 is simply not good enough. In his latest report, my noble friend Lord Davies said:

“Gender balance makes good business sense. Women make up over half of the UK population, account for nearly half of the working population, outperform men educationally and are responsible for the majority of the household purchasing decisions”.

The problem is that women are basically outnumbered at all levels of the pipeline to the top. It is not so much a glass ceiling as, as the Chartered Management Institute

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describes it, a “glass obstacle course”. In March this year, the TUC analysis of the 10 best-paid and the 10 worst-paid occupations in the UK showed a stark gender divide. Nearly two-thirds of the 900,000 employees in the best-paid occupations, such as financial managers and medical practitioners, are male. Legal professionals, head teachers and college principals are the only top-paying occupations that employ more women than men.

There is also a lack of part-time positions in the top jobs. Employees are half as likely to work part time in top-paying professions, at a rate of 13.7%, as they are in the rest of the labour market, at 28.3%. Among chief executives and senior officials, the best-paying occupations in the UK with an average hourly wage of £43.17 an hour, just 6.6% of employees work part time and only one in four is female.

In contrast, of course, the lowest-paid occupations, such as retail assistants and cleaners, are dominated by women and part-time work. Of the 2.6 million employees in the 10 lowest-paying occupations, where average hourly wages range from £6.20 to £6.82, 1.7 million employees are female and 1.8 million work part time. The concentration of women and part-time workers in the UK’s low-wage sectors shows why fair pay remains such a big issue for women and why part-time work so often pushes working women into poverty, and thus their families too.

The virtual elimination of the gender pay gap for full-time workers under 40 years of age will be of little comfort to the millions of women who have had to trade down jobs or put their careers on hold to find work that fits round their childcare or caring responsibilities. Surely a great lack of imagination and a clinging to traditional ways are indicated by the fact that the opportunities to ask for part-time work, flexible working and reduced hours on returning from maternity leave are generally restricted to fairly low-level positions and to women who are already well established in their jobs.

That leads me to the issue of having children and what happens in the workplace. The Maternity Alliance says in its recent report that in 2005—three years before the global financial crisis of 2008 and subsequent recession—a landmark study by the Equal Opportunities Commission found that half of all pregnant women suffered a related disadvantage at work, and that each year 30,000 were forced out of their jobs. That is a shocking and disgraceful finding. However, eight years on, all the available evidence suggests that such pregnancy and maternity discrimination is now more common than ever before, and that as many as 60,000 women are pushed out of work each year. Faced with mounting evidence of this proliferation of pregnancy and maternity discrimination, key government Ministers have until very recently simply denied that there is a problem. In November, however, in announcing £1 million of funding to enable the Equality and Human Rights Commission to undertake a new study of this issue, the Government seemed finally to accept that such unlawful discrimination,

“remains prevalent and more needs to be done to tackle it”.

That realisation has come a bit late, however, and there has still been no action.

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Unfortunately, the Government have introduced a number of measures that make it harder for women to tackle such discrimination. Access to free employment advice has been restricted and almost all civil legal aid has disappeared. The questionnaire procedure in employment tribunal discrimination claims, which facilitates the revealing of crucial information held by the employer which is otherwise not available to the claimant, is set to be abolished in April 2014. That is a great shame and the Benches opposite should think very carefully about its implications. Perhaps most damagingly of all, since July 2013, those wishing to pursue a tribunal claim for pregnancy, maternity or other discrimination must pay up to £1,200 in upfront tribunal fees. It is difficult enough to take forward a claim against your employer, but then to have to find £1,200 before you start is both shocking and discriminatory. Surely the message from the Government to employers should be that an economic recession and hard times are no excuse to flout the law.

I could give other examples, but what it all adds up to is a Government who really do not get it when it comes to women and the workplace. At best, the Government make the right noises, as the Minister did in his opening remarks. In particular, individual women inside the Government have been working hard on this issue. However the product—that is, the prospects for women—still looks like the same old same traditional way of running our economy and businesses. Just to make sure that it was really difficult to find out the equality impact of government policy, one of the first things they did was to stop counting that impact in any meaningful way.

Working women therefore need a Labour Government to tackle the scandal of low pay by substantially increasing the value of the minimum wage, end the abuse of zero-hours contracts, guarantee mums and dads in work 25 hours of free childcare for three and four year-olds, and give all parents of primary school children access to childcare through their schools from 8 am to 6 pm. Actually, we need a Labour Government.

4.20 pm

Lord Flight: My Lords, it was healthy to see that the gracious Speech put in big letters up front that the key objective was to get the economy growing. That must surely be in the interests of all people. I cannot help thinking that that is not a bad criterion against which to measure individual policies: are they going to be good or bad for economic growth? Perhaps if President Hollande had done that, he would have avoided causing the French economy so much damage.

I add my congratulations to the Chancellor on having got our economy back to decent growth. I well remember that not long ago the IMF was rapping us over the knuckles, saying that we had not got it right. In a sense, you cannot blame the Labour Party for offering criticism; it is its job to oppose. However, three years ago I predicted that growth in the UK would be 3% by the time of the 2015 election. At that time people thought that I was not being particularly sensible, but that is about what it will be. As has been pointed out, this has been achieved while inflation remains healthily under 2%.

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In essence, the Chancellor has taught Hayek but mostly done Keynes by printing £180 billion of money and continuing to run a budgetary deficit of well over £100 billion. If that is not Keynes, I am not sure what is, but it is fair to say that that was needed after a 7% crash in the British economy, just as Keynes was needed and was successful in the 1930s. The issue is when you turn down the Keynesian gas and revert to more standard economic management.

I also particularly welcomed in the gracious Speech the incentives for shale gas exploitation, the new collective defined contributions pension schemes and the proposals for streamlining planning approvals. Two of my children and I have been involved in the planning process over the past year. It is a complete nightmare and extremely expensive, involving environmental this and planning that—all for fairly simple and straightforward things. It is blindingly obvious that the problem is lack of supply because of the extent to which our planning system has become so complicated.

I have only one reservation for the near term: I hope that the Bank of England does not leave it too late to start to nudge up interest rates, particularly given that the economy has returned to normal, because the obvious risk is that when rates are increased they will have to be put up by a greater quantum, which would have more of a shock effect on the economy at the time.

However, we are not adequately talking about two big issues. One is that, taken together, health spending and the totality of welfare expenditure are now running at around £350 billion per annum—close to half of all government spending. As Mrs Merkel said in a different way, that expenditure is growing much faster than tax revenues or the economy. It is simply not sustainable in the long term, and it is particularly in the areas of welfare spending and the unfunded costs of ageing that Governments are going to have to think again. If they do not, there will be major economic problems in the future.

This is also reflected by the fact that we currently have a structural deficit of around £100 billion per annum. Although some of that can be addressed—as much as possible, we hope by economic growth and rising tax revenues, I do not think it will all be dealt with thus. We have reached the stage of economic recovery where those issues need to be thought about in a little greater depth and the can cannot be kicked down the road.

The second issue is savings and productivity performance. We need a savings rate of around 10%; it is more like 3%. Productivity growth since 2005 has been virtually zero overall. Manufacturing productivity has grown reasonably, but in the service industry—unbelievably—it has declined. The two obviously interrelate, in part because savings equals investment: if we have low savings we are likely to get low investment. However, that is not the only cause. Low levels of saving have been a major cause of poor productivity growth for over a decade. One cannot but observe that this goes back to the introduction of tax credits around 2004. I remember when the Heath Government brought in similar proposals to subsidise employment with their negative income tax proposals. The then leadership of the Labour Party—I use their arguments from 2004-05—warned that, if we do subsidise employment,

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we run the risk of having excessive employment in areas that are not growing, of discouraging people from getting skilled up, and of damaging productivity growth, just as the Speenhamland system did in the early part of the 19th century. The whole equation of savings, productivity growth and tax credits needs to be looked at in a little more depth.

Since 1997, the savings rate has also been driven down by the destruction of what was the best pension system in Europe. That destruction has been caused partly by overburdening final salary schemes, partly by the 1997 tax rate and partly by continuous tinkering with the rules. I very much hope that the gracious Speech will mark much more constructive thinking by the Government about pensions and retirement saving. That is how we can practically get the savings rate back up and generate the funds we need for investment in this country.

Again, a by-product of the inadequate savings rate has been, as I think was pointed out by the noble Lord, Lord Adonis, a current account deficit that has now risen to over 5%. For nearly 20 years we have financed that by selling off companies and the family silver. I will not say that that is running out, but there may come a time when it will not be in the national interest to keep on selling assets to pay for current consumption.

I repeat that there has not been in economic policy an adequate focus on the two key areas of savings and productivity growth, but there are three good news territories that I will focus on which I see in the commercial bit of my life. One is a wonderful explosion in entrepreneurship and a new-technology industrial revolution that is going on. I have to admit that a lot of the latter is in London—I will come back to that point—but I do not believe that the figure of 4.5 million self-employed is a reflection on people not being able to get contractual work; I think that a lot of it is voluntary. Something like one-third of young people now want to be entrepreneurs. In my generation everyone wanted to be a civil servant or work for a large corporation. Now, people are much bolder and much more imaginative, and this country, more than any other, is really exploiting the new technology that is coming up. Therefore, I think that there is very good news for the future beneath the surface.

Secondly, I think that we should welcome and not resent the success of London. Jobs in London are reckoned to be 39% more productive than jobs in the rest of the UK. It has more people employed in highly skilled, knowledge-based industries than any capital anywhere in the world. At the end of the day, this is generating the tax revenues that will help stimulate other parts of the country. I find it disappointing when people talk almost in terms of being jealous of London’s success because it is not matched at present by parallel success in other parts of the country. Let us remember that in the 19th century Manchester and Birmingham were doing brilliantly and London was not doing so well. Therefore, things swing to and fro.

Lord Lea of Crondall: I do not recall anybody saying that they resented the success of London. We have two economies in the United Kingdom that are getting further and further apart, and it is going to be

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very hard not only in economic terms but in terms of social cohesion if that continues. Many people made that argument but I did not hear anybody say that they resented London’s success.

Lord Flight: If the noble Lords thinks about it, that is just what he has implied. Effectively, he is saying that if London were not so successful the UK would be more homogeneous and that would be better. I am saying that we should use London’s success to earn the money to help pay for new investment in other parts of the country and the transfer payments that are needed. That is what is actually happening. I think that we should take a positive view of London’s success and not a negative view because other parts of the country are not doing as well at present.

I close with my third area of good news. When I looked at the Government’s infrastructure plan back in about 1911—I am sorry, 2011; I am much older than I look—I asked the Financial Secretary to the Treasury when these things were going to happen but he could not give me an answer. I am delighted to hear today from my noble friend Lord Deighton about all that is now happening, and I congratulate him on having really got things going. The plans were there but we had all manner of burdens and hurdles to get over to make things happen. It is good news that they are now happening, as those infrastructure investments are badly needed. Therefore, I end on what I view as three very positive things for this economy.

4.32 pm

Lord Harrison (Lab): My Lords, it is a great pleasure to follow the noble Lord, Lord Flight, who, like the noble Lord, Lord Marlesford, who spoke earlier, has been a dedicated and engaged member of Sub-Committee A with our inquiries into European Union financial and economic regulation. I join in the praise of the noble Lord, Lord Davies, who is a more recent recruit to that committee.

I hope that I will give some comfort to the noble Viscount, Lord Trenchard, on one of the subjects that our committee has tackled: the financial transaction tax and our potential alienation from the wider European Union. To his credit, the Chancellor of the Exchequer indicated that the health of the UK economy depended on the health of the eurozone. To his discredit, now that the eurozone has recovered under the decisive leadership of the European Central Bank president, Mario Draghi, George Osborne has claimed that the faltering UK recovery was all his own work. However, a faltering UK economy it was and is, and the ambition of the Chancellor to rebalance that economy has palpably failed. Those are not just my words but those of the European Commission. In its recent pronouncements on the European Semester process, with which members of Sub-Committee A are all too familiar, it identified some of the shortcomings within the United Kingdom’s economy: for example, the public finances still being in excessive deficit, as mentioned by the noble Lord, Lord Flight; the failure to broaden tax breaks; and the distortions in property taxation.

As regards the financial sector, I welcome the Bill on small businesses, which I hope we can explore further. The distortions of the housing market most

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recently were criticised on the “Today” programme by the noble Lord, Lord Wolfson, who described the Help to Buy measure as simply a sticking plaster. As the European Commissioner rightly said, we need a further boost to housing supply. Let us remember those golden days when Lord Macmillan was Housing Minister and we built 300,000 homes a year, as well as the house price increases that have happened in the United Kingdom.

Unlike the Prime Minister, who appears, in the word of Lady Thatcher, frit to tell us the nature of the proposed reforms of the European Union, the CBI has come out with some very clear statements. One concerns the failure in trade, as illustrated earlier by my noble friend Lord Adonis, and our ability as the United Kingdom to succeed in increasing trade. Recently, in a debate in this Chamber, I discussed the imbalanced economy because of our failure in trade; I will not repeat that. However, the siren voices of UKIP suggest that leaving the European Union will somehow return us to cheap butter and lamb from New Zealand: that will not be so. The truth is that the UK trades more with Belgium than with China.

The single European market is the great opportunity for the United Kingdom. It is not just a single market in which we can trade but the incubator for making us more competitive to sell our services and goods in the world outside and to achieve new markets. As for the idea of leaving the European Union, all those massive trade deals—one of which was concluded by the noble Lord, Lord Green, with the WTO, following the Doha round, or the TTIP, which is the great broad alliance of the two major economic continents bestriding the Atlantic and is with us at the moment—would not be achieved for the benefit of British people if we were not part of the European Union. That is not just what I say: President Obama said that, were we to leave in 2017, he did not have the stomach to have a separate trade deal with the United Kingdom.

The CBI’s second point of what we should be doing to reform the European Union is to complete the single market. After all, it was the inspiration of Arthur Cockfield in this House—when he was Mrs Thatcher’s appointed commissioner—which, inspired by Jacques Delors, created the single market, which was the biggest cutter of red tape and bureaucracy throughout the European Union. How nice it would be to hear from a Minister of the Crown that they too believe in the worth of the single market. Mr Cameron has often said that the single market is important but he has done nothing to further United Kingdom domestic and economic interest by extending it. Can the Minister name three examples in the past four years where the United Kingdom working with others has extended and broken down barriers to free and fair trade within the European Union? We have failed to make friends and influence people. As I said earlier, in Sub-Committee A we often talk to the ministries of the United Kingdom Government and ask them not just to block other people but to work and combine with other member states to open up the paths to the freedom of the single market.

The third element that the CBI talked about is the protection of non-eurozone interests and this is where the noble Viscount, Lord Trenchard, comes in. We

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have severely criticised the financial transaction tax. But the Government, in their first reply, said that they were for the financial transaction tax, as long as it was applied globally, which was never possible. It would be a huge imposition on the City of London. We have fought that, united, on Sub-Committee A, and I am glad to say that we have finally woken the Government up to take action on that distinct threat to the prosperity of the City of London as the European Union’s—not just the UK’s—premier financial market.

The Liberals are still in confusion. The other day, Danny Alexander said, “Oh yes, the financial transaction tax—that’s fine they can go ahead and do that”. However, the worry that has been expressed by the noble Viscount, Lord Trenchard, is that gradually we will have 18 members of the European Union out of 28 who are part of the eurozone. As more and more join—and they will and they do—our protection, which has been secured by this Government, will fail as the number goes down below four.

Incidentally, colleagues may have heard the other day that Angela Merkel was called up to be on a quiz show in Germany. As we know, she carries around her Blackberry. She was called as part of the quiz where you can phone a friend for help. It was not clear whether the caller was David Cameron, but that seems to be the United Kingdom’s approach: phone a friend. Phone Angela Merkel. She is friends with us and she will see us all right on the night. But the world is changing and we had better wake up. There are more and more members of the European Union’s single market and we had better ensure that when we speak we make friends with everyone, not just Angela Merkel.

Important decisions are shortly to be made about the European Commission’s President. We have taken against Mr Juncker. He is not my favourite person, but there we go. I proposed Pascal Lamy, who recently retired from the WTO, or Christine Lagarde, who of course has been associated with the IMF. They will go before the European Parliament to be interrogated by MEPs as part of the democratic process. Andrew Lansley has possibly been identified as our potential commissioner. Why should he not come before a Select Committee of the House of Lords? Why should he not, as part of his learning process about the European Union, come before us? We have been saying on the Select Committee that we should increase the work of national Parliaments in the scrutiny of the European Union. There is a ready example. Perhaps the Minister would like to reply to that suggestion.

The European parliamentary elections have been broadly misread. The two major pro-European Union blocs will remain in the European Parliament—the EPP and the Socialists and Democrats group. Apparently the socialists are now democratic, although that was not the case when I was there: we were simply socialists. I thought that would be of interest.

I hope that we can ask the media to put the spotlight on the lazy UKIP Members of the European Parliament. I want to pay respect to and say something light about the Liberal Democrats, which happens so rarely in this House. Some outstanding people have been lost in the European parliamentary elections, including Sir Graham Watson, and of course Sharon Bowles is to retire. I hope that they both find a place here. Perhaps I may

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also mention Cathy Ashton, who has been absolutely outstanding despite the rubbish printed in the press. She has been working hard behind the scenes, just as she did when she was the Leader of this House. She has highlighted a problem for Andrew Lansley. He will not get any sort of economic brief; he will just be given something such as culture, which is fine. However, too few Brits, only 4%, are aspiring to and getting major positions within the European Union, although it is worth noting that some 12% of those positions should be occupied by British civil servants. What can the Government say about that?

I have little to add to the excellent speech of my noble friend Lord Adonis, which set out what Labour will do. One of the things we will not do—I am so pleased that our leader has said it—is have this absurd referendum in 2017. Did no civil servant advise the Prime Minister that 2017 is the next time that the presidency of the European Union will be held by the United Kingdom? Imagine being President of the European Union and saying, “Oh, by the way, we are just voting to leave”. That will build confidence enormously.

I did say that small businesses are to feature in a Bill, but I want to conclude with a few words about local authorities. I was a member of Cheshire County Council for a decade, and was very proud to be so. I was also involved in Merseyside. The noble Lord, Lord Heseltine, gave inspiration to ensuring that we develop more financial and economic centres in Britain than just those in London. I know of the Labour Party’s proposal to set up two banks to help small businesses and the regions. These are areas that need promotion and it is right that we should do so.

In the single market of the European Union we have a golden opportunity. We need to find friends and to speak some of the languages they understand. We need better co-ordination between this Parliament and the European Parliament and the UK Members of it. In that way, we will be able truly to rebalance the economy, which as yet we have failed to do.

4.47 pm

Lord Bradshaw (LD): My Lords, before this debate I contacted two people. I do not know what their political opinions are, but they both run successful SMEs, one in the manufacturing sector with a large proportion of exports of high-value products, and the other in the service sector, whose company has been voted as one of the best companies to work for by its employees. I asked for their opinion of the coalition Government. They both replied in the same way: “We are having good government”. I then asked them what help should be given to SMEs in furthering their businesses. They responded with two points. The first was the need to reform the business rate system, which bears heavily on small businesses, particularly those in the manufacturing sector. The second was that we must not leave Europe. However, we must confront the huge waste of money due to the high salaries and expenses associated with the place, and in echo of the Prime Minister’s words, them being “so bossy”. However, we do not have to leave all this until 2017 or even 2015. We should start arguing for what we want now, because we have a lot of useful suggestions to make.

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On the subject of the coalition, I pay tribute to a few of the Ministers in your Lordships’ House. I single out the noble Earl, Lord Howe, and the noble Lords, Lord Taylor of Holbeach and Lord Nash, as three who have been particularly careful over the past couple of years to engage in the most meaningful consultation. They have attended countless meetings and modified a lot of things in the original Bills before they were carried into law. I must say that, in the 10 years I was here under the Labour Government, I rarely got any concession at all. The process among most of the people on these Benches has been to try to work together even though we have different philosophies.

Turning to transport, I am very concerned that we may be moving into an era of “predict and provide”, when we should be turning to smarter management of a lot of the infrastructure we have. However, the most important thing that I want to say is that the state of structural maintenance of our highways is an absolute disgrace. Everybody gets complaints about potholes. Who exercises proper discipline over the quality of repairs carried out by the utilities that constantly dig up our roads? They do not seal the edges of the holes, so that moisture gets in and the next winter we are back where we started.

One of the major problems is the revenue-capital split of the Treasury. There is a point—I have been through all this on the railways—where heavy structural maintenance should be a capital item. Maintenance is something you carry out two or three times a decade, but structural maintenance you carry out once only 20 or 30 years. These are capital items, and we should look very carefully at the way that they are accounted for. We should concentrate our road investment on the really strategic roads, which have often got bad safety records. The Minister will know that the A1 north of Newcastle going up to Scotland is a particularly bad road, and I hope that she may have some good news for us on this

I turn to the electric railway. We are not going to build any more diesel trains—all new trains will be electric. My conversations with the rolling stock companies lead me to the conclusion that they are absolutely willing to take the risk in financing freight locomotives and new passenger electric rolling stock. I plead with the Minister to let the market decide what they offer and to not let officials keep dipping their hands in subjects which they do not understand. This is all about technical issues of mechanical and civil engineering and does not benefit at all from constant interference.

I turn to some of the irritants—the things that the media seize on and use to beat Governments, whether they are a coalition, Labour or whatever. We have heard today from the Rail Regulator that there was a 5.7% increase in rail passenger journeys last year. The railway is growing very fast, but it is held back, mainly by the procrastination of officials over rolling stock. The time has come for us to not raise rail fares at the end of this year. We have huge growth but it enables the media to portray the industry as being very expensive when in fact, except in a few cases, it is actually quite cheap.

People are equally concerned about energy prices, as many Members have said. Bearing in mind that utility companies generally took far too much money

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out of people’s pockets, I wonder whether we could have a moratorium on energy prices. I am not saying that we should put a cap on energy prices permanently, but I believe that consumers are due some sort of recompense from these companies.

We know that getting appointments with GPs is very urgently at the top of people’s list of irritants. Strong action to deal with this problem will help keep cases out of hospital and help make people more content with the service.

This party very reluctantly agreed to raise higher education fees and we have suffered for it. But the higher education sector has not responded by giving its students a real increase in value for money. Often people get only about three hours a week of lectures and I do not believe that overall the higher education sector has stepped up to the plate at all. It should be increasing its productivity. It is a perfectly reasonable demand.

Turning back to transport, we have to find a way of making young people’s bus fares more affordable. They often cannot afford a car or transport and often live far from their places of work or education. Much could be done to encourage them. I do not know whether my noble friend the Minister has any news for us but I would like to believe that the progress being made in some parts of the country is being replicated in others.

I was at a conference of the bus industry last week and I am quite clear that the partnership that local authorities can bring about with operators is of enormous benefit. I was talking about Oxfordshire. They had to review all their services in west Oxfordshire. The county and the operators got together. They had £3 million of cuts to be made but the industry found, by various manipulations, £2.7 million out of that. So there was a very small reduction, compared to what they began with. I contrast that with the announcement from Northumberland County Council that it is withdrawing free school transport for anybody over 16. That strikes me as a particular contrast between people who work in partnership and people who work against one another.

There is much to do and we on these Benches look forward to a busy and useful Session. I personally refute any suggestion that this is a stale Parliament.

4.58 pm

Lord Davies of Oldham (Lab): My Lords, this has been an excellent debate, with many very effective contributions. Of course, it was graced by the maiden speech of the right reverend Prelate the Bishop of Rochester. We hope that his obligations to another assembly do not mean that he will not be able to attend ours with some degree of regularity and make contributions such as he did today.

These debates are extremely difficult to wind up, as the Minister will prove in a few moments, I trust. Partly of course it is because although a number of departments are down to be considered, noble Lords always make comments on departments that are not on the list. The list includes five major departments so the House will have to forgive me—and the Minister, I have no doubt—for prioritising my response to the issues.

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We had a penetrating analysis of the economy in this debate. The Minister emphasised progress on infrastructure and plans for the future. I must say that most of the areas he was able to emphasise seemed to be infrastructure projects which went back in time. Crossrail and Thameslink were both started under the previous Government and HS2 was the initiative of my noble friend Lord Adonis, who opened for the Opposition in this debate. I am not surprised that the Government are eager to claim credit for the progress that has been made over the past few years, but on all sides of the House we recognise that major infrastructure projects are bound to proceed across several Governments. I hope the Minister will recognise that in a debate such as this, where he is meant to defend the Government’s policies and plans, reference to those originated in the past may not carry quite as much weight.

The noble Lord, Lord Birt, raised an issue to which the Minister made no reference and I am not sure whether the Minister replying to the debate will make much reference to it either. As the noble Lord asked, how on earth can it make sense that one of the most successful airports in the world, which is operating constantly at peak capacity and serves the nation in such a significant way, has five years of delay because the Government decide that it is too tricky an issue to address until after another general election? That, I should have thought, counterbalanced some of the praiseworthy attempts to show that our infrastructure programmes were on target.

My noble friend Lord Adonis referred to another area about which we have considerable concern. Everyone knows that the A14 road is of great significance to the country. After all, it links the Midlands to the docks at Felixstowe. It is a road that has been under incredible pressure for a considerable period. It also links with the A1, and therefore goods from the north. Where is the A14 at the moment? It is constantly subject to delay about whether its position should be enhanced. The Minister indicated that at last there is a desire to make progress on the A14. Yet again, we have seen several years of delay on a crucial transport infrastructure project.

As for the legislation, that concerned with transport scarcely measures up to the significance of transport as a crucial element in the economy. In the Queen’s Speech, we have a proposal, to which we are not in outright opposition, to change the nature of the Highways Agency. We agree that it is advantageous to try to ensure that the agency has some long-term perspective on its work. We also agree that it is entitled to some degree of operational independence. Not just we in this House but the Select Committee on Transport in the other place have great difficulty understanding the reasons behind the change to lock in the roads budget and incentivising staff by getting rid of the restrictions of Civil Service pay. I wonder whether those two objectives merit legislation related to transport in this debate, because they do not answer the questions that we have. Is the Highways Agency to be a strategic body? If so, where is the place for the Minister in the Department of Transport if a body is responsible for planning the roads for the future? How do we make this body answerable to Parliament? What will be the basis of more day-to-day scrutiny of this body and

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how will it be held to account? Will we in fact see any relationship between this body and the local and regional government to which it obviously ought to relate? The answer is quite straightforward: there are no answers at this point. We will of course debate the issue but this scarcely looks like a measure which is adequate to the needs of transport at this time.

We have also seen others introduce important dimensions to this debate in terms of transport and the welfare of people that revolve around the issues of local government. We often feel that, with regard to a debate on the Queen’s Speech, local government should be significant enough to be a focal point of the debate with a Minister answering on it. However, we are not blessed with that decision today. The right reverend Prelate the Bishop of Leicester first raised that issue of local government and the importance of communities, and my noble friend Lord McKenzie brought his formidable knowledge to the issue to emphasise how much pressure local authorities were under. While we might have thought that that viewpoint was bound to be expressed by the Opposition, the noble Lord, Lord Tope, having first regaled us with the multifarious successes of the Liberal Democrats in the local elections, went on to indicate that the worst is yet to come. He said that local authority budgets would in fact be under greater pressure in this coming year, during the run-up to the 2015 election, than they have been up to now. The House should quail at that prospect because it is of course accurate.

Several noble Lords went on to discuss the issue of housing. It was raised first by my noble friend Lady Andrews in her very thoughtful contribution but my noble friend Lord McKenzie referred to it and the noble Lord, Lord Shipley, also emphasised housing in his speech. It was also referred to in the maiden speech of the right reverend Prelate the Bishop of Rochester. Of course we all welcome Ebbsfleet and the concept of a garden city but Ebbsfleet will produce 15,000 homes, when on all sides it is recognised that the scale of the housing crisis we face is measured in terms of hundreds of thousands of homes. That is why we would have expected something more significant from the Government on housing than we have in that Bill.

The noble Lord, Lord Jenkin, missed no opportunity to emphasise the energy aspects of the debate today. He was following the noble Lord, Lord MacGregor, who had referred to the important report of the House of Lords committee. We agree that it is important that the issue of shale is discussed as fully and as early as possible. There cannot be gains in delay but there are gains in ensuring that we get it right and give reassurances in the legislation to local communities on the potential extraction of shale. However, it would be absurd not to recognise the importance of getting as much information before Parliament as quickly as we can. That is why I support those two noble Lords in their representations on the work of the committee and appreciated the emphasis which they both put on shale.

Much of the debate revolved around the issue of the Treasury and the economy. We all appreciate that the base on which the development of our society turns depends a great deal on our ability to increase the resources available to the nation and to secure the fair distribution of those resources. I thought that we

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might have a fairly predictable and pedestrian debate on the economy but we were electrified by the contribution of my noble friend Lord Giddens, who asked the Minister summing up the debate to consider the position of two philosophers, Karl Marx and the Governor of the Bank of England. The Minister knows that she can concentrate on the Governor of the Bank of England but my noble friend was concerned to put before this House, and demand that the Government consider, the fundamentals of the nature of our economy and our society. There is plenty of evidence now to identify that distinctly unequal societies perform less well, have lower rates of economic growth and have lower rates of satisfaction in their communities than more equal societies. There is evidence developing now, and of course the Governor of the Bank of England was referring to this, that societies that seek to create more equal and rational rewards are better.

We never hear from the other side of the House—or at least very rarely; certainly not in my presence—concern expressed about the absurd difference that has grown up between the pay of chief executives along with those who are highly paid in industry and commerce and the static position of wages over the past decade. If the Government think that they are sailing into sunny uplands with a gentle drift towards success in the next general election, I point out to them that there was one reference that said that real people are yet to see the benefits under the coalition’s economic priorities. The person who that quote is taken from is Kenneth Clarke, who happens to be a member of the Cabinet in the coalition Government.

There is a great deal to worry about in the extent to which our communities have suffered so grievously over the past four years. I know that the Government purport to say that all the sacrifices were worth while because at last we have growth. We were bound to get growth at some stage, but we have had wasted years in which our people have seen their living standards decline in significant ways. It is therefore important that the Government recognise that the challenge is laid down from this side of the House. The Queen’s Speech scarcely merits much in the way of challenge. Most of us have scarcely seen a Queen’s Speech so devoid of content. If it is not zombies who have produced this gracious Speech, it is certainly those who agree with their colleagues in the Commons that a year before the day when you know an election is going to be called, you are much better off being in your constituencies talking to your constituents than passing legislation that Ministers are trying to foist on you.

5.13 pm

The Minister of State, Department for Transport (Baroness Kramer) (LD): My Lords, it is a pleasure and an honour to welcome the right reverend Prelate the Bishop of Rochester and congratulate him on making a maiden speech; to do so on the Queen’s Speech takes exceptional courage. He said that he has hard work ahead of him to achieve the goal of women bishops, and asked if there was enthusiastic support in this House. I assure him that there are many who will provide him with such support; indeed, he may regret asking the question.

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The noble Lord, Lord Davies of Oldham, was right to say that the better the debate, the worse the wind-up. I realise that I have an extraordinary challenge in the wind-up today; there were so many speeches today across such a wide range of issues that I realise that in the time available it is going to be absolutely impossible to respond to all the points that have been made. Where there are questions that I have been unable to answer by the end of the debate, and there will be many, we will try to follow them up.

I start by putting today’s discussion in some sort of context. Four years ago we gathered in this Chamber to debate the first Queen’s Speech since the formation of the new Government. It was also the first time that Britain had a full coalition for more than half a century. However, we were also in the middle of the biggest economic crisis for decades. It was crucial that in that first Queen’s Speech we sent out a strong message of intent to reassure the country. Indeed, Her Majesty’s opening words in that Queen’s Speech of May 2010 made absolutely clear our top priorities: to reduce the deficit, restore economic growth and govern with fairness and responsibility. We know that those are the yardsticks against which this coalition Government’s performance will be measured.

I do not intend to reiterate the speech made by my noble friend and colleague Lord Deighton at the beginning of this debate, which listed the successes and achievements on the economic front. They were echoed by my noble friend Lord Flight, who predicted 3% GDP this year—I hope he will give me some good horseracing predictions, because that requires true courage and acuity. My noble friend Lord Razzall talked of the animal spirits that are pushing forward the economy. My noble friends Lord Northbrook and Lady Noakes pointed out how manufacturing is on an upward trend. That was a real challenge for us to achieve, and we are achieving it. My noble friend Lord Wrigglesworth talked about the achievement of reducing the structural deficit and achieving confidence in the markets at the same time as real fairness in the ways in which we have had to make cuts in order to manage the deficit. My noble friend Lord Shipley talked about the robust contribution of small businesses, as did quite a number of other noble Lords. When you listen to that list, you recognise that this is very far from a zombie Government. This Government are alive and kicking. I take the point that zombies are immortal. Now there is a prospect.

In fact, if anyone is looking a little pale on this occasion, it has to be the Opposition and their speeches today. I am just astonished at the level of amnesia. When I listened to the speeches made by the noble Lords, Lord Adonis, Lord Giddens, Lord Lea of Crondall and, to an extent, Lord Davies, they all seemed to have forgotten the state of the economy that they handed to us. I say to the noble Lord, Lord Lea of Crondall, and this is crucial, that, yes, there was a financial crisis, but the Government had run this economy in such a way with such overspending that there was no resilience to come back from it, and it is because of that that we faced the crisis that we did, which was so much worse than that in other developed countries. It is from that base that we have moved forward.

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I say to the noble Lord, Lord Adonis, that many of the issues that he raised and criticised this Government for were actions that his own Government had not taken. Although this is slightly out of the range of the economy, one of the things that shocks me most is that as I go up and down the country and talk to young people who are now just getting into employment, they came through education during the Labour years when they did not get the skills they needed, when there were no apprenticeships, respect for vocational education or opportunity. It is those changes, including 2 million apprenticeships by the end of this Parliament, that are beginning to make a real change and eat into the figure for long-term youth unemployment. I agree that we must focus on that relentlessly, but that is just one of the many issues on which I wanted to challenge.

The noble Lords, Lord Giddens, Lord Lea of Crondall and Lord Davies, and the noble Baroness, Lady Thornton, all raised the issue of inequality. We have been in a period of real austerity. We are beginning to recover. We are now seeing wages begin to recover, which is crucial, but we also made sure that people kept their jobs. To have been through the period of recession that we have been in and to have managed to keep down unemployment, which is now down to 6.8%—which is not where we want it, we want it much lower—has been a very significant achievement. What more could you do to tackle inequality than to start to take people at the bottom of the earnings scale out of income tax? That is something that Labour never conceived of doing. Labour may now be on board—everybody is on board—but my party led on this issue and has been crucial in making those kinds of changes, along with apprenticeships and the kinds of opportunity that are offered.

The noble Baroness, Lady Thornton, mentioned women. Since the coalition Government came to power in May 2010, there are 446,000 more women in employment. Between 2011 and 2012 the gender pay gap reduced for all employees. Even if you look only at full-time employees, it also reduced. We are not where we need to be but, my goodness, we are on the path. There are not many who could have said that, certainly not coming through the kind of economic period through which we have been. We must not relent.

I will try quickly to cover some of the key issues. On the issue of women, the tax-free childcare that we are now putting into place, something that has never been done before, as well as the improvements that we are making in the support to parents on universal credit, are great breakthroughs. They will be very important in the lives of people, especially in the lives of many women.

Quite a number of noble Lords raised the issues of social housing; I am trying to watch the time as best as I can. Social housing was the focus of speeches by the noble Baroness, Lady Andrews, and the noble Lord, Lord Sawyer; it was covered by the right reverend Prelates the Bishops of Leicester and of Rochester; and the noble Lord, Lord Shipley, talked extensively about it, as did the noble Lords, Lord McKenzie of Luton, Lord MacGregor of Pulham Market, Lord Wrigglesworth and Lord Harrison. They fell into two groups. There was discussion of affordable housing

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and housebuilding. When we came into government in the financial crisis, obviously the consequence of that financial crisis was that housebuilding had largely collapsed. It is one of the first industries that gives way in that kind of financial crisis. We have been coming back from that, but the impact of the crash was huge. Housebuilding is now at its highest since 2007. Over 445,000 homes have been built since April 2010; 170,000 affordable homes will be built between 2011 and 2015—we have got to 99,000 so far; and £23 billion of public and private finance will help to ensure another 165,000 more affordable homes between 2015 and 2018, which will be the fastest annual rate for 20 years.

We need to keep absolutely focused, which is one of the reasons why the Bills that were announced in the Queen’s Speech were so important. The ability now to transfer unused land held by agencies from those agencies to the HCA to turn into housing projects much more quickly will be one of the many things that will help, along with the changes in planning law which, as many have said, is not a protection in many cases but an obstacle. We need to change that dynamic.

The other issue that was raised was concern about the house price bubble in London. Hopefully, that is now mitigated against as we look at the most recent figures. I want to be absolutely clear that, as some said on the Floor of the House, Help to Buy does not appear to have been a contributor to that: Help to Buy has been helping people outside the London area. Mark Carney’s name has been taken in vain on quite a number of occasions, but what is really important is that the Bank of England is now looking at macroprudential tools rather than interest rates only to try and manage the housing market. It is now becoming tougher, for example, to qualify for a loan in London for high-priced houses. Mechanisms like that can help us deal with those bubbles without the necessary resort, which will have to happen at some point, to interest rates.

Somebody raised the question of foreign buyers. Noble Lords will know that Boris Johnson now has an agreement with builders in London that they will market first in London rather than overseas. There are other measures like that which we can manage to achieve. Others mentioned some of the tax steps that have been taken to try and contain that.

I move on quickly from that issue to the issue of energy, which obviously plays a big part in the Queen’s Speech. Again, I am under tight time pressure, so I will focus fairly heavily on the issues of extraction of oil and gas from shale, and geothermal. I want to provide some reassurances—I am desperately looking to find out exactly what the question was—that the report of the Economic Affairs Committee, discussed by its chair, the noble Lord, Lord MacGregor, my noble friend Lord Teverson and the noble Baronesses, Lady Noakes and Lady Jones, and others, will be responded to before the summer recess.

There is a consultation at present on the Government’s proposals for underground access. I say to the noble Baroness, Lady Jones, that this concerns access below 300 metres. Many of the people who oppose the headline that they see on this measure have no idea that we are talking about levels below 300 metres. It

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does not apply to surface access. It is very much to the credit of this country that we have a very tough regime of approval for the kind of exploration that would be necessary for shale oil and gas extraction. They are internationally recognised and there is no attempt to break down those protections, which are essential for the confidence of the community. Others have talked about the importance of sharing the benefits with the community, and a number of programmes deal with that. I will gladly write to noble Lords with more detail because I can see that time is racing away from me.

There were a number of questions on devolution and local government from the right reverend Prelates the Bishops of Leicester and of St Albans, the noble Lord, Lord McKenzie of Luton, and my noble friends Lord Tope and Lord Shipley. Devolution is absolutely critical and the Government have taken it forward in a way that no one has for a generation. I work with the Local Growth Fund. Local enterprise partnerships are obviously working closely and are deeply engaged with their local authorities and other stakeholders in the community and are coming forward with strategic plans for economic growth in their areas, bringing in new kinds of thinking and breaking down the old silos, which is critical. It means that the Government are handing over the motivation for and the design of those strategic economic plans to local areas, which is a crucial piece of devolution.

I look at simple things in the transport world where we transferred significant parts of the support that we give to buses, including the bus service operators grant, back to local authorities. There is very much a pattern. I recognise that these are hard times, but the good local authorities have looked at the harder financial profiles they face and have managed them very effectively. I take on board the warning of my noble friend Lord Tope; we have had that same concern virtually every year. Really good authorities have found ways to deliver for local people—and, ironically, the approval ratings for local authorities have gone up significantly: they are now at 77%. So there are ways, and we must demand that at a time when every penny is important.

Infrastructure forms a significant part of the nature of this Bill and a number of people raised it. The noble Lord, Lord Birt, said we did not have a plan; we certainly have a plan by any definition of a plan that I know in the national infrastructure plan. As the noble Lord, Lord Deighton, is sitting here, I asked him to confirm what I am saying. The plan sets out what the Government want to achieve, the approach in each sector, and the action they will take to ensure delivery, including identifying key priority investments.

That has been crucial, and sometimes the numbers used to describe investment in the UK and to compare it with other countries fail to recognise that essentially road and rail are public investments in this country, but nearly every other kind of investment in infrastructure comes from the private sector. I was recently in the United States, where they are now trying desperately to copy what we are doing because one’s ability to leverage in that kind of private money significantly increases the amount of investment in infrastructure and creates so many possibilities that could never

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come from just using the public purse. So we need to stop using distorted figures when we look at these numbers.

Noble Lords talked of their concern over the new status of the Highways Agency—the noble Lord, Lord Davies of Oldham, mentioned it.


Lord Birt: As I think the Minister will see when she reads Hansard, she has misquoted me. Could she answer this question? What percentage of GDP is going to be invested in our infrastructure under the Government’s plans?

Baroness Kramer: I will have to come to the noble Lord with that number, because I do not have it to hand. I would be quite interested in seeing it myself, as I have not seen it expressed in that way—but I would be delighted to.

Something that is very important about the Highways Agency, which encapsulates the real change that this Government are bringing to infrastructure, is that it will sit as the delivery implementing agency, in effect, for future roads investment. Sitting outside it is the roads investment strategy, which remains entirely the responsibility of the Secretary of State. I should say that the Highways Agency is also wholly owned by the Government—it is definitely an agency. For the first time, we will have long-term certainty of funding for roads and a programme over a Parliament in the same way that we have had for rail. Many in this House have pointed out that the problem in project after project has been that investment has been subject to a stop-start set of decisions, which have disrupted long-term investment. Now we can begin to have that kind of assurance. Bringing into the Highways Agency people with the skills to deliver that efficiency, just as we are doing in the rail sector, is absolutely crucial. With the scale of investment that we are undertaking, we have to make sure that every penny is well spent. That means that we need that specialised expertise and we will have it going forward—we hope, if this House and the other place agree to the kinds of proposals being put forward in the Queen’s Speech.

I have less than two minutes, so I close by reiterating my thanks to everybody who is here. I recognise that there are very significant areas that I have not covered, but I shall try to do so in writing in response to

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questions. Finally, it has been an absolute privilege to be in the Department for Transport at this time. I look back at previous Ministers, and many in this House who had to deal with cuts and decline. We are at a time when this Government are taking a completely different approach towards infrastructure. It is part of the growth, because it becomes the framework for important economic growth. We are building Crossrail, we are completing the Northern Hub, and there will be £70 billion of capital investment in transport over the next Parliament. We are trebling the budget for major road schemes. Network Rail will spend £38 billion over the next five years. We have doubled the investment in cycling and we are investing £500 million to position Britain at the forefront of ultra low-carbon motoring. As the demand for travel rises, we are meeting that challenge.

Busy arteries such as the west coast main line will be overwhelmed in the next decade if we do not build new capacity between our cities in the form of new rail, which is why we need the new north-south rail High Speed 2. I can tell the noble Lord, Lord Horam, that it is of course our intention that eventually there will be an HS1-HS2 link. The scheme in the programme was simply inappropriate and unworkable. It is something we want but we recognise that it will need to be looked at in the future.

However, the most important thing about HS2—this goes back to the discussion on the economy and equality—is that it offers so much opportunity to the Midlands and the north, which they deserve. We must take connectivity along with it. That goes back to the devolution issue. The noble Lord, Lord Deighton, has led that work and worked closely with the communities in the Midlands and the north. They have told us what connectivity is needed to maximise the benefits of HS2. That line offers a future in which once again, as has always been the case traditionally, the Midlands and the north can balance out London and we achieve growth all across our nation so there are no areas to which we have to transfer payment, as it were. Rather, there will be great generation of wealth, income, jobs and new business all across the country.

I thank noble Lords for their contributions and wish there had been time to respond to more of the questions.

Debate adjourned until Monday 9 June.

House adjourned at 5.34 pm.