It may be morally wonderful to say to somebody, “You worked twice as hard to get your degree”. I do not think that is in the spirit of the Equality Act or the Disability Discrimination Act in front of me. Why should a person have to flog themselves half to death to get through? Why should they take a greater risk of underachieving or failing? Underachieving at university is probably the great one as if you are two grades down, you miss all the jobs that you are supposed to get afterwards. Does a bad degree qualify you for as much as having done another course? I doubt it, so how are we to make sure that that level of access is provided?
There is considerable room for reform and change in this field but just picking on the computer is ridiculous, as it is about 5% of the total cost but the thing that can guarantee that the technical aspect comes through. It is possibly less than 5%, according to the figures that I have. Other forms of help could be looked at more but please can we rethink this to make sure that the technical assistance that goes through can be used? That applies to all disabilities that use technical aids and assistance. If we cannot get that through, we will be getting people who will not achieve and who, under those circumstances, would not get there when they probably should.
Just to put the cherry on the cake, your Lordships will of course realise that other departments, such as the Department for Work and Pensions, do give assistance with similar types of technology and access to work. So there is school and access to work but the bit in the middle that links it all together is to be changed and probably removed from people. Please can we get some coherence going through this system? It is not too late to change it and get something coherent but it will have to be fairly soon so as to be ready for the 2015 intake. Can we have another look at this? If we do not, we will end up getting people half way through but dropping out or underachieving. This will basically mean saving a little here and wasting a lot somewhere else.
5.37 pm
The Lord Bishop of Durham (Maiden Speech): My Lords, I begin by thanking your Lordships for the way in which I have been welcomed and supported as I have entered this noble House. That support has been full of wisdom, including guiding this Bishop as to how to kneel correctly during Prayers, for which I was extremely grateful.
I am told that I am a rare breed; I am twice summonsed to this House. Last autumn, I was still serving as the Bishop of Southwell and Nottingham when I received my summons to enter this House. However, it was just before Christmas and I had stopped actively working in Southwell and Nottingham. By a bit of devious working of my diary and guidance from certain staff in this place, we worked out that I could not accept the summons. I had to leave on 20 January, when I was elected and formally confirmed as the Bishop of Durham.
Now I am here as the Bishop of Durham and I serve a wonderful area, from the Tyne in the north to the Tees in the south. We have the wonderful Teesdale and Weardale in the west and beautiful coastline in the east—at least, it is beautiful now that the coal dust has been cleaned up. We have the brilliance of Durham city with what is—in Bill Bryson’s words, not mine—the world’s finest cathedral. It is a wonderful area in which to serve and I am proud to do so. However, I have to add that 30% of the parishes in which I serve are among the 10% most deprived parishes in England. That is the level of poverty which we also have to tackle in the north-east. I am the 74th Bishop of Durham, and I am very grateful to my friend the most reverend Primate the Archbishop of Canterbury for being here today.
One of the proudest days of my life happened in the summer of 1977. It was my graduation day from Nottingham University, where I studied English and history. It was not my graduation that I want to point out, though, but my granddad, Granddad Giddy. After the ceremony, he took hold of my mortar board, put it on his head, took my certificate in his hand and pointed to it, saying to me quietly with a tear in his eye, not something that my granddad did very often, “This is why I left Cornwall when I was 17 years old. I left for a better life, not for myself but for my wife, my children and my grandchildren”. I was the first person in my family ever to go to university and get a degree, and this was the fulfilment of my granddad’s hopes and aspirations. It was not a question of what he had achieved in the Metropolitan Police, which he had joined because he believed in public service and serving the common good and in which he had risen to the level of superintendent; no, it was about the wider family and the common good that he was most concerned.
When I talk to young people in the north-east now, I am both inspired and deeply concerned. The vast bulk of children and young people in this country are fantastic; they are brilliant, they work hard, they want to achieve and are polite and engaging. It is a very small number who cause us slight anxiety. However, young people in schools and colleges tell me of their concern that they will never work, or certainly that they will never get work that they believe is fulfilling or is in the area where they want to work. They see their
older siblings and friends not finding meaningful work that they really want to pursue. That concerns me deeply. Some have lost all hope and aspiration long before the end of school, and certainly before the end of college or university. They have been told that their value and contribution to the world is in work and their economic contribution. They have been told a lie. Their worth and contribution is in being great human beings, which is not necessarily always worked out in paid employment. We have to help our young people to understand their true value as human beings first and foremost—but yes, we have to help them to find good, meaningful work.
The noble Lord, Lord Bamford, made excellent points in his maiden speech about manufacturing. The north-east makes a massively significant contribution to the life of this nation: £14 billion-worth of exports every year. We are the only region with a positive balance of trade in the export market. Yet I regularly hear people in business, local government and local communities say that they feel not listened to or even forgotten. There is great news on employment: Nissan continues to be hugely significant for Sunderland and the region; we are the world leaders in the developing sub-sea exploration sector; Hitachi’s new train production factory is bringing new jobs; Rolls-Royce has just opened something; and there are other signs of hope. Proposals around apprenticeships and encouraging small and medium-sized businesses are hugely welcome. So, too, is the proposal to be tougher on firms not paying the minimum wage. However, there is much concern in my region that apprenticeships are established in a way that ensures they really do turn into long-term jobs. Small and medium-sized businesses, often family ones, need greater encouragement to take the leap of taking on apprentices, for it is this sector that is really going to create the new jobs that we need.
While the minimum wage proposals are welcome, I hope that in the longer term more serious consideration will be given to implementing the living wage. It was my privilege to announce the new national living wage in Nottingham last autumn. I look forward to the forthcoming report of the Living Wage Commission, and I hope that it will be taken deeply seriously. Assisting people to move away from welfare dependency, which must be a laudable aim, would be greatly helped by ensuring that decent wages were paid to all and by continually helping with the creation of new jobs in every part of this nation.
I have a passionate concern for children and young people; I have had a lifelong engagement with them as a volunteer and now in my calling. I serve as the bishops’ advocate for children and as co-chair of the Church of England and Methodist safeguarding work. I also serve as a patron of the Prince of Wales’s Step Up to Serve campaign, encouraging young people into volunteering. My safeguarding role means that I take a very close interest in all matters relating to safeguarding and child welfare. This work is challenging for us all, and within the church we continue to have to face up to not only our current responsibilities but, in some areas, our serious past failures. It is very uncomfortable work. I welcome the proposals in the Serious Crime Bill to tackle the question of the systematic emotional abuse of children. The impact is horrendous, and
I promise to work hard on this. I am grateful that the Government have had the courage in the gracious Speech to tackle this issue at last.
Before concluding, I would fail to introduce myself properly if I did not refer to my engagement in the wider world through the Scripture Union and the Church Mission Society, my time as a vicar in east London and as Bishop of Southampton, of Southwell and Nottingham and now of Durham. I have had the particular privilege of visiting many countries but particularly Rwanda and Burundi. In Rwanda, memorably, there were no plastic carrier bags anywhere; it has banned them completely. They even take them off you as you enter the country.
I have learnt a great deal from Christian Aid and others about working in the aid field. Last summer I was privileged to take three Members of the other place on a visit to those two nations. We learnt a great deal about each other, I can tell you. What impressed us most was local communities taking responsibility for themselves, working hard on reconciliation at every level and seeking to build a better future from the bottom up, not waiting for people to do it from the top down. We have a great deal to learn from the poorest nations of the world.
I look forward to serving with your Lordships in the work of this House. From the person doing their shopping stopping me in the street to local community and local government leaders, head teachers, principals of colleges, university vice-chancellors and key business people all across my diocese, I have been given a very clear message about my role in this House: “Bishop”, they all say, “speak up for us here in the north-east. You can speak up for us in a way that very few can. Please try to help them in Parliament to listen to all the good things in the north-east, and to hear our needs”. They expect me to speak for the whole community, and that is what I will seek to do.
5.47 pm
Lord Bhattacharyya (Lab): My Lords, it is a pleasure to speak in this debate and to have heard the outstanding speech by the noble Lord, Lord Bamford. It is an even greater pleasure to follow the right reverend Prelate the Bishop of Durham. On his arrival in Durham, he made it a priority to take the church’s message into the most difficult, challenging and inaccessible places. No wonder, then, that he has arrived in your Lordships’ House.
The right reverend Prelate’s history of ministry in our inner cities and deprived communities, his desire to speak for his new home county and his passion for Africa, particularly for Rwanda, remind us of the great value that religion can bring to our public debates. Perhaps his desire to spread the good news explains why he maintains both a blog and a Twitter account, bringing the message of the church into the most virtual, though perhaps not the most ethereal, of spaces. Indeed, it was thanks to his Twitter account that I learned that he was a fan of “Strictly Come Dancing”, and that today he was nearly kept from this debate by a delayed train—another reminder of the need to invest in our national infrastructure. Durham Cathedral is famously,
“Half church of God, half castle ’gainst the Scot”.
Whatever happens in Scotland this year, I am sure that he will focus on the first description, not the second.
The right reverend Prelate’s maiden speech was a fine example of a great tradition with a modern emphasis; the gracious Speech itself was also a fine example of tradition. After all, there is no political tradition greater than a Prime Minister seeking to win an election. I do not judge the speech drafters of Downing Street harshly for this. After all, it is hardly a trait limited to one party. It does pose a challenge, however. How do we debate in a non-partisan way a speech developed more for electoral success than for legislative purpose?
I would like to suggest one or two areas where we might scrutinise the Government’s progress against the ambitions set out in the gracious Speech. First, there is the pledge of 2 million apprenticeships by the end of this Parliament. Declaring my interest as both a former apprentice and the chairman of Warwick Manufacturing Group at a Russell group university, the University of Warwick, I can assure your Lordships that big, round numbers are not what we should focus on. For example, we should not be increasing the number of apprenticeships for those over 25, who are already in work, which is where the growth has been over the past few years. Such people are rarely learning a new trade but are simply getting on-the-job training paid for by the state. That is not apprenticeship. Nor should we see apprentices as a way of keeping the unemployment statistics down.
Rather, our objective should be delivering a better skill base for the British economy, just like the German economy. For this, the total number of apprentices matters little, but the quality of skills training each apprentice receives matters a great deal. The truth is that this can vary widely. Young people know this, which is why the best apprenticeships are massively over- subscribed. To improve our skill base, we need better vocational and technical education for school and college leavers and a better integration—that is very important—of higher and technical education, even if that means a smaller overall total of apprenticeships. The Government made a worthwhile step forward here in the Budget by expanding the apprenticeship grant for small businesses for 16 to 24 year-olds.
However, a renewed focus on quantity may lead funding bodies to neglect the importance of quality. It would be better to get our best institutions involved in delivering vocational education. That is why I decided at Warwick that I would set up a university technology college, which was also sponsored by the noble Lord, Lord Baker. We take these people, get them into the automotive sector, because it is designed for the automotive sector only, and while they are getting their higher apprenticeships in the company, we, in a Russell group university, get them into part-time graduate education so that they have a career from school to there. I learnt this entirely from a very big German car company which shall remain nameless. That is what it does because the skills it requires are what make Germany what it is today. We do not have that.
The second area where we should monitor the Government’s progress is how their plans to deliver growth over the long term might conflict with restraining the booming London property market. With property prices up nearly 9% this year, we already hear calls for
higher interest rates. The noble Lord, Lord Livingston, is working flat out to help British exports, and I wish him well. However, higher sterling makes his life much harder by sending a chill through our manufacturing sector, just as it finally begins to show signs of vigour. For a British manufacturer in the automotive sector—the biggest in this country—exporting finished goods to fast-growing markets, for every £1 billion of export revenue, a 10% appreciation of the pound reduces income by £100 million. That damages profitability and competitiveness in markets such as China and the US, which have both seen sterling appreciate by more than 12% this year. This reduces the amount that is available to be invested in the UK.
Of course, people tell me that international businesses can mitigate this by sourcing supplies and materials overseas, but that reduces investment in the UK. I have helped bring many industrial investors to Britain, and the largest are here. I know how rising sterling makes the UK a less attractive place to invest, especially when coupled with a long-standing lack of skills. For smaller businesses, too, higher rates and higher sterling limit their ability to invest in the future, leading to a worsening of the British disease, an economy with low business investment. Some people talk about productivity. People do not understand that unless you invest you cannot increase productivity. It cannot be done by workers working harder or more. You have to have the technology to get the productivity up, and if you cannot get that, your productivity will never go up.
These are not partisan points. Indeed, I think the agenda to deal with this is shared right across the House. Ahead of potential rate rises, the Government must press ahead with their plans to support manufacturers and exporters by investing in developing skills. They must make progress on their ambitions for deregulation and deliver on their promises for lending through an expanded British Business Bank, which we have talked about in this House for the past five years. This would represent an excellent programme of scrutiny for the final year of this Parliament. It would not be partisan or electorally divisive but would represent a common agenda for a long-term economy. If a gracious Speech about plastic bags tells us anything, it is that there is little else to occupy us. This would be a worthy programme of work. Surely, on this issue, we can all be in it together.
5.56 pm
Lord Plumb (Con): My Lords, we have been extremely fortunate to hear two of the most outstanding maiden speeches ever heard in this House. Of course, they varied in their content. Noble Lords will not be surprised that I want to relate my remarks on the gracious Speech to the role of agriculture and the food, forestry, farming and fracking industries in the economy of the United Kingdom—a kingdom which I hope will stay united.
There are those among us who are well qualified to talk of industrial growth. We had a very fine example of that this afternoon; I used Bamford haymaking machinery before my noble friend Lord Bamford was born. That is where it all started, as he told us as an engineer. It just proves what can happen and what can develop from those very early stages.
Many might say that in the interests of economic growth agriculture does not even appear on their radar. Let me disabuse them. First, I shall give some potted history. There is a farmers’ club in this Parliament, with joint membership from both Houses. It was created in 1795. In the early 19th century, British agriculture was 2.5 times more productive than that of France, and in 1851 agriculture accounted for 20% of national income. Now it is much less than 7%, but everything is relative.
In the first speech I heard Churchill make, many years ago, he said that,
“30 million people, all living on an island where we produce enough food for say 15 million, is a spectacle of majesty and insecurity this country can ill afford”.
We now produce enough for 30 million, but that is of course less than half of the population. In 2014, we are therefore facing an ever-growing population and our priority must be food security. We need, as we have heard, land for housing and various forms of development, but we need to maintain the beauty of the countryside; we have heard about that in areas such as Durham. It is a difficult balance. There are so many pressures for land. It is becoming so expensive—because they are not making any more.
From that work-bench, which we need to produce food, agriculture’s contribution to the economy increased by a staggering 54% between 2007 and 2012. It held up well during the recession, and increased the value of output from £16 billion to £24 billion during that period. It is obviously the foundation stone for the food and drink industry, with an equivalent of £96 billion and 7.3% of GVA of the United Kingdom economy. Food and farming as a business provides 3.7 million jobs. Add the production of energy and forestry, the work at universities and colleges and thousands of research workers, and that makes it by far the largest industry in the country. For every £1 farming contributes to the economy, food manufacturers contribute a further £5. It is the fourth largest exporting sector, which grew by 5% to £12.8 billion last year. The downside is that we are still slaughtering 90 cattle every day—every day—which react to the bovine TB test.
The dairy trade shows an incredible deficit of £1.27 billion, and in 2013 we imported £40 billion-worth of food and drink overall and exported only around £19 billion, so there is work to be done. That seems crazy economics when we have such potential growth in food production in this country. Many were shocked at the degree of food waste shown so clearly in the report of the sub-committee chaired by my noble friend Lady Scott, which I hope this House will debate in the not-too-distant future.
Today, more farmers and growers are using wind, the sun, farmed by-products and energy crops to produce clean low-carbon energy. A number of farm-based renewables provide electricity for home farm use and supply electricity for local businesses and homes in rural areas. It is estimated that climate-friendly energy produced on farms could reduce greenhouse gas emissions by 17 million tonnes of CO2 by 2020. Agriculture could be the source of more than one quarter of national renewable energy needs. Biogas digesters, wind turbines, solar roofs and fields and biomass boilers are all becoming a commonplace part
of the future of the economy, so farming is now a modern industry facing a future of competition and, I hope, closing the gap on imports.
As I think everybody recognises, however, the future depends to a large extent on research. We are only starting to regain our world leadership in food research but, if we can build a car with robotics, picking strawberries or an iceberg lettuce is not beyond the realms of robotic possibilities. Robotic milking plants are increasing, with both man and cow satisfaction, and at least 70% of new farm equipment has some sort of precision farming component. Sat-nav tractors are commonplace, the state-of-the-art combine harvesters have up to eight computers and new technologies are continually delivering cost-effective spraying and fertilising equipment. New technologies will help to improve yields, reduce costs and protect the environment. Sustainable intensification is always dependent on innovation.
Much of the present farming community has the necessary skills, particularly the young farmers who believe that there is a great future in British agriculture and are keen to follow the motto of “practice with science”. I have seen much of this recently. It is still imperative, however, to protect the health and welfare of plants and animals. Excellent work by various organisations continues in our woodlands and forests, for which we should thank Defra and woodland interests.
It is a continuing struggle, particularly after the difficulties of last year with floods in various areas, to control the weeds that are beginning to show this year. The Minister will realise, and I am sure will advise the Government, that we must protect and preserve the work-bench—our land—which can be flooded or suffer from drought, as we witnessed in recent times; but the business of food production is long-term and we must prepare to play our part in feeding a hungry world. Future changes must relate more to growth. We need greater simplification of rules and regulations. We need less red tape and more subsidiarity in order to move forward freely to face the problems the world over.
All the changes before us at the moment, which of course the Prime Minister is pressing for overall, are there for our benefit. I know that the Prime Minister will get support from many other countries in bringing about something that is workable, which people understand and can accept, and which will be of benefit against the overall problems facing Europe.
6.07 pm
Baroness Hayter of Kentish Town (Lab): My Lords, the Queen’s Speech demonstrated the Government being dragged, I am afraid reluctantly, into helping consumers to get a fair deal, whether from their elected representatives, from service providers or from business. Our ambitions, by contrast, are greater. It was Labour—indeed, in this House—which saw an extension of the ombudsman scheme from estate agents to letting agents. It was a Labour Government who introduced the legal services and financial services ombudsmen, and regulators’ consumer panels.
However, there is more to do. We must support consumers, the poor and disadvantaged, by repealing those parts of the lobbying Act that gag rather than
enhance the work of those who give voice to the voiceless, and by improving the Government’s apology for a statutory register of lobbyists—of which, incidentally, we have failed to see anything so far. Labour, by contrast, would put power in the hands of consumers, be they tenants, borrowers or people troubled by nuisance calls.
Take “generation rent”, where the number of private renters, now 9 million, has surpassed those in social housing for the first time. Private tenants face an insecurity that few of us would tolerate. They are 10 times more likely to move home per year than homeowners, and a third of them moved last year. Yet surely they deserve the same stability as homeowners. So Labour will legislate to make three-year tenancies with predicable rents the norm. This is not rent control; I am old enough to remember that. This is about certainty and fairness.
Tenants are now paying £1,000 a year more than when this Government came into office. That is great for letting agents, but what is unfair is not letting agents’ legitimate business but double charging, when both landlord and tenant pay for the same service. More than 90% of letting agents impose charges on tenants on top of deposits and rent in advance, and charge them high fees for simple tasks such as renewing a contract. Labour will ban letting agents’ fees for tenants, which will save families up to £500.
I congratulate my honourable friends in the other place, Stella Creasy, Hilary Benn and Emma Reynolds, whose efforts on this got the Consumer Minister in the Commons to announce just yesterday that the Government will amend the Consumer Rights Bill to force letting agents to display their fees, with a civil penalty of up to £5,000 to be paid by any agent who fails to do that. That is a welcome move. However, landlords, not tenants, choose the letting agents, so there is still nothing a tenant can do even if the letting agent is double charging.
Movement for Change’s “Home Sweet Home” campaign in Brighton saw tenants who were stuck with broken back doors, broken bedroom windows, or no hot water or heating over Christmas. Such conditions are unacceptable. In addition, we want landlords to put smoke alarms in all rented houses, and we want to reduce deaths from carbon monoxide poisoning. Can the Minister say what the Government’s response is to Consumer Safety International’s call for alternatives to carbon monoxide detector sensors where they have proved unreliable?
We must raise the standards of letting agents. Anyone can set up as an agent, including people with no qualification in landlord and tenant law and, more seriously, people with convictions or even those on the sex offenders’ register. There is not even a requirement for clients’ money to be kept in separate accounts. As I said, thanks to this House we have legislated to require agents to belong to an ombudsman, but the Government held back from enabling repeated poor behaviour to lead to a letting agent being struck off. Will they rethink their refusal over that?
Because individual consumers have little bargaining power when up against business, we will seek to improve the carried-over Consumer Rights Bill, not simply to
codify rights but to enhance such rights, to allow for collective redress where consumer law has been breached and to make retailers and service providers signpost access to an ombudsman. Our aim is for consumers to have information, advocacy and redress across all markets. That is good for shoppers but also good for business, as it drives up standards.
Small businesses are already seen as consumers in some areas. The legal services and financial services ombudsmen treat microbusinesses as consumers, as do Ofcom and Ofgem. However, the Government have failed to treat small businesses as consumers in the Consumer Rights Bill, despite calls from the FSB. Will the Government continue to rule out such rights for small businesses?
It is also hard to understand why the Consumer Rights Bill omitted the EU directive on alternative dispute resolution, despite the fact that it has been sitting on the Government’s desk for two years and needs to be introduced next year. Its tardiness will make it difficult for businesses to have time to prepare, to sign up to an ombudsman and to train their staff. Will the Minister tell us when we will see plans to implement the directive and explain why ADR should not be compulsory?
The Government have failed to do much to help charities. They promised that the big society would play a part in the provision of services, but a quarter of public sector outsourcing went to offshore companies, squeezing out UK companies and UK charities. Furthermore, we have only a draft protection of charities Bill in the Queen’s Speech, which means that the Charity Commission is unlikely to get its strengthened powers this Session. We will undertake to work to ensure that voters—in the recall of MPs Bill—get a proper say, that consumers get a better deal, and that charities are helped to do their work.
6.14 pm
Lord Aberdare (CB): My Lords, I shall focus on the commitment in the Queen’s Speech to,
“increase the total number of apprenticeship places to 2 million by the end of the Parliament”.
I welcome that. Good-quality, well designed apprenticeships that meet the needs of employers and apprentices across a wide range of business sectors are surely one of the most effective means of tackling the blight of youth unemployment while increasing the UK’s productivity and competitiveness in the global economy as a whole. In March, the Government published for consultation proposed new arrangements for delivering and funding apprenticeships, which are largely based on the recommendations of the Richard review of apprenticeships. I attended a conference yesterday morning at which both Doug Richard and the Skills Minister, Matthew Hancock, spoke, and was on the whole encouraged by what I heard.
However, there are some concerns, particularly about persuading more small and medium-sized businesses—the importance of which we have heard so much about today—to take on apprentices. Most of the initial trailblazer initiatives being used to pilot the new approach are in sectors dominated by larger businesses such as aerospace, automotive, energy and utilities, and financial
services, while sectors such as construction and creative and media, which have a much higher proportion of smaller firms, are unrepresented.
I will enumerate some of the concerns which need to be addressed to ensure that the 2 million target is reached and that it does not exclude large numbers of younger apprentices or specific sectors such as construction. First, under the proposed new rules, employers will have to make a cash contribution of a third of the training cost of their apprentices, with the Government paying the other two-thirds. Apparently no allowance will be made for the extra, non-cash costs involved in taking on apprentices, such as additional supervision, on-site training, mentoring time and the costs of slower work rates and needed rework. Extra incentive payments will be available for businesses with fewer than 50 employees, but the overall cost of providing apprenticeships under the proposals seems likely to put off some, and perhaps many, SMEs.
Secondly, there will also be extra payments for taking on younger, 16 to 18 year-old apprentices, for whom until now the full costs of training have been paid. Assuming that those extra payments will fall short of the full cost, that could act as a further disincentive for firms to take on apprentices at those younger ages, as against using either older, more job-ready or more experienced apprentices, or just using the supply of cheap labour often available in sectors such as construction. Given that most of the increase in apprenticeships so far has been among over-25s, with under-19 apprenticeships hardly growing at all, that seems particularly ill advised. It certainly will not do much for those young people who fear they will never work, who were mentioned by the right reverend Prelate the Bishop of Durham in his fine maiden speech.
Thirdly, there are significant concerns among SMEs and others that the payment options being considered by the Government, which are based either on using existing PAYE mechanisms or on a new apprenticeship credit model, may prove far from simple for small firms to implement, and unpredictable in terms of the exact amounts and timing of payments. In addition, they are likely to result in serious cash-flow challenges, which are, of course, the absolute bane of all small businesses—as I can vouch from my own experience.
Fourthly, many SME apprenticeships are managed through apprenticeship training agencies—ATAs—whereby the ATA acts as the employer for a group of businesses and undertakes most of the administration and bureaucracy involved, to lift that burden from the small employers for whom the apprentices actually work. It is not clear how the proposed new funding arrangements will affect ATAs, but at least one of them, Building Lives, is concerned that its delivery and funding model may be put at risk by the proposed new arrangements. Building Lives is a community interest company which currently runs six academies across London which offer training and employment for up to 300 apprentices a year, who work mainly in small to medium-sized construction-sector firms. It featured as a case study in the cross-party report No More Lost Generations, which was mentioned earlier by the noble Lord, Lord Macdonald of Tradeston. It has set itself a target of expanding to 10 centres and
offering up to 1,000 construction apprenticeships each year. However, despite the fact that its whole raison d’être is to make it possible for small contractors to take on apprentices, it seems that it may in future have to fund a third of the training costs for all those apprentices upfront, without even being eligible for the small employer incentive payment—a double whammy which may jeopardise its entire award-winning operation.
I applaud the intention to increase the number and quality of apprenticeships, but I urge the Government to ensure that there is sufficient flexibility in the funding and other arrangements to meet the specific needs of smaller employers, and of sectors such as construction, and of younger apprentices. The system must be genuinely simple, able to accommodate firms of all sizes in all sectors, and be thoroughly piloted before being rolled out.
Almost as important as providing more apprenticeship places is the other side of the coin: ensuring that there are enough candidates, especially 16 to 18 year-olds, coming forward to take up those places. Schools need to do a much better job of making their students aware of the apprenticeship opportunities available and encouraging those for whom they might be appropriate to pursue them. This seems unlikely to happen unless and until Ofsted inspections include formal assessment of the careers services offered by schools, often deficient at present, and of the range and quality of progression routes followed by their students, including into apprenticeships and other forms of employment, not just into further or higher education.
Finally, I hope that your Lordships will forgive me if I stray from the topics of today’s debate to add a brief welcome to the proposed social action, responsibility and heroism Bill, providing a degree of legal protection for good Samaritans and have-a-go heroes. I declare my interest as a trustee of St John Cymru Wales, which is dedicated to helping people save lives through first aid training and support, and pursues the vision of a first-aider on every street in Wales. It would be even better for the Government to provide more of these potential heroes with the tools to do the job, as it were, by making first aid training a mandatory part of the school curriculum, so that the UK could begin to match the life-saving outcomes of those other countries where that is the case.
6.21 pm
Lord Monks (Lab): My Lords, I start by adding my congratulations to the noble Lord, Lord Bamford, and the right reverend Prelate the Bishop of Durham on what I regarded as really excellent maiden speeches.
The gracious Speech has been criticised from the Opposition Benches as something of a fag-end speech, a lowest common denominator programme from a riven Government, a zombie effort with minimal content—in fact, one could say we are competing on this side of the House to find the right compliments to pay. I will content myself with saying that it is somewhat thin gruel given the scale of the problems the nation faces, as my noble friends Lord Tugendhat and Lord Liddle and others spelt out earlier. However, it is not a total non-event and there are important points which will need the close attention of this House.
On pensions, I confess to some confusion in my mind about the direction that the Government are taking. On the one hand, pensioners in DC schemes will be able to extract the cash value of their savings; on the other, collective defined-contribution schemes will be promoted. Are there not two different philosophies at work here—freedom to blow one’s pension savings on a jazzy Italian sports car or whatever, ranged against the collectivism inherent in those Danish and Dutch pension schemes with all their rules and mutual obligations?
I declare an interest. I am a trustee of NOW: Pensions which is part of ATP of Denmark. ATP provides four out of five occupational pensions in Denmark and is a much respected non-profit-making institution. Denmark has lessons for us to learn in terms of low charges, simplicity and generally excellent investment returns. I hope that we now can turn that experience to benefit British pensioners.
I accept that the annuity market has been unsatisfactory in the UK, but we are entering unknown territory when we encourage pension pots to be blown on property, sports cars and the rest. I hope that pensioners will not come to lament as the late great George Best did. When asked about what he had done with his money, he replied, “I spent it on gambling, women and drink. The rest I wasted”—probably on a Lamborghini. We all know in this House what the consequences for the public finances could be of people not having occupational pensions who actually were in a position to have them and the cost that will fall on the taxpayer for that.
Collective defined-contribution schemes are a good idea and a step in the right direction, but perhaps the Minister can bring us up to date on why there is some Dutch pressure to modify its system probably more towards our individualistic direction. There seems to have been a revolt among some pensioners there against what we could call intergenerational solidarity—benefiting one age group against another.
As a champion of auto-enrolment and how that has been developed in the UK, I would not like to see it hampered by too many extra complications and requirements added on to it. We are signing up employers as quickly as we can and there will be an awful lot of employers who are late or would probably never get round to doing it without significant pressure. We have a mountain to climb to build up a strong pensions culture in this country among employers and employees —a mountain made higher and steeper by the fact that, regrettably, we are less inclined as a country to go for mandatory or quasi-mandatory pension savings than, for example, the Dutch or the Danes.
Let us not try to run before we can walk. Can the confusion between more individualism, on the one hand, and a more collective approach, on the other, be cleared up? Can we do this in a consensual way? One of the successes of auto-enrolment has been that generally it has all-party support and all the key players in the country have supported it. Therefore, it feels rather firmly embedded as an approach. I feel these other points, too, should be subjected to a big effort to find consent.
I turn to the proposed small business, enterprise and employment Bill. The Bill certainly needs to recognise that casualised work, offering low pay and poor working
conditions, was certainly expanded quickly during the recession we have just been through. It is continuing to grow even as the economy has started to recover. The proposals on zero-hours contracts are rather weak and will not end most of the abuses. There is a thin, sometimes invisible line between the UK’s deregulated labour market and exploitation—and zero-hours contracts often cross it. They are the dark side of the flexible labour market. There are other dark sides, by the way, including low pay, low skills and low productivity. When we are talking about the undoubted successes in job creation, we should remember that if this country is to earn its living properly in the world and not rely on deficit funding, we are going to have to deal with those quickly.
The tougher penalties for employers caught dodging the minimum wage are welcome, but the key question is what resources will be deployed to catch the offenders. At the moment we know the inspectorate arrangements are wholly inadequate.
I note the TUC supports moves to strengthen regulation on the disqualification of directors and to improve transparency on company ownership. However, the Government's proposals as yet do not really scratch the surface of this big subject and do not address the need for others to have a view on corporate governance—voices for long-termism, for investment and for responsibility. That seems to be an important area that is very much underdeveloped at the moment.
My final point is to warn the Government not to use the social action, responsibility and heroism Bill to water down UK safety law. Yet again, we are tending to hear the tired refrain about stripping out unnecessary red tape. Careless employers should not be let off the safety hook, encouraged to loosely hurl charges of a jobsworth culture without being contradicted by people in government. Our laws stand up well to those in other countries; our record on health and safety is good. Very often the people with the best health and safety have the best productivity and the best quality outputs from their businesses. These laws build good practice and are essential protection for the UK’s 30 million people at work.
6.29 pm
Lord Higgins (Con): My Lords, this Queen’s Speech gives us an appropriate occasion to take stock, as we enter the finishing strait for the coalition agreement, ahead of the general election, before we become preoccupied with manifestos, and so on. The central piece of the Queen’s Speech is certainly on the economic side of things. Indeed, it begins,
“my Government’s legislative programme will continue to deliver on its long-term plan to build a stronger economy and a fairer society”,
“strengthen the economy and provide stability and security, my Ministers will continue to reduce the country’s deficit”.
It is now apparent that the policy that this Government have pursued on the economy was the right one, unlike a number of others advocated by the Opposition, and it is fortunate that we have a fixed-term Parliament so that we will have a period in which the fruits of the improvement in the economy can become more apparent. Nevertheless, it is important to recognise that progress
in reducing the deficit has been slower than we hoped. Indeed, the target has been put back. In that context, it would be very important for the manifesto of the Conservative Party and, I would hope, of the other parties, to make it clear that we are determined to reduce the deficit entirely and to get around to reducing debt and reducing the burden on our children and grandchildren. There is still a long way to go in that regard. None the less, we have the fastest-growing economy. We have seen the IMF radically change its view of the British economy and the policy that we are pursuing; it is now very much in favour of what we have been doing and, indeed, have done.
Of course, there are still a number of dangers ahead, not least the rather precarious international political situation, and with regard to the eurozone. We are inclined to think that the eurozone crisis is over. The problem is that the eurozone structure and the extent over which it is operating geographically are fundamentally flawed. They may sort it out for the moment, but inevitably, as time goes on, it will continue to suffer very serious strains. That may jeopardise the future of the UK economy.
I say all this because I see no very clear alternative being put forward by the official Opposition. We have had a number of particular initiatives on fuel prices or whatever it may be, most of them abandoned very quickly after being put forward.
This is also an opportunity for us to take stock of a number of other matters. Perhaps inevitably, I shall mention one constitutional matter and some institutional matters. The constitutional one is, of course, the question of an elected House of Lords. As we approach the election, while the Liberal Democrats will no doubt include something on this subject in their manifesto, both the main political parties would be very foolish to do so. The reality is that the House of Commons has spoken; it now understands this issue, and it is not going to go ahead in agreeing to an elected House of Lords. Therefore, it would be very foolish for parties to endanger the programme that they wish to implement otherwise by including that in a manifesto. We ought to have learnt the lesson on that issue.
I am also slightly concerned about the position with regard to the House itself. I rather despair of hoping that some Members will stop referring to “the noble Minister”, when noble Ministers do not exist. There are noble Lords, but not noble Ministers. Indeed, even in this debate the same thing has turned up. But there are other important issues. We agreed some while ago to the use of iPads in the Chamber, but we have a very clear rule that speeches should not be read. Therefore, I was rather appalled to sit in on a debate recently where I regret to say that a Member of the Bishops’ Bench read his entire speech word for word from his iPad. I do not know whether he was in communication with any higher authority but, at all events, I thought that it was a rather unfortunate development.
It is tremendously important that we do something to adjust the balance in this House between legislation and general debate. My noble friend the government Chief Whip is very clear that the length of recesses recently has not been greater than normal. At all events, they have certainly seemed longer than normal,
and there are a number of important issues that we could have spent time debating in that period—not least the crisis in Ukraine and the problems in Europe. I pay tribute to my noble friend Lord Tugendhat in this regard. It is quite extraordinary that we have not debated Ukraine in this House, and the problems arising with regard to Russia. My noble friend dealt with the issue very clearly. I managed to get a topical Question in the ballot, which came up a couple of weeks ago, but that is the only occasion when we have really tackled this problem. We have to face the fact that there is a change in our relationship with Russia. Whether it is true or not, it is widely reported that Mr Putin’s doctorate was on the use of economic power as a political weapon. We also ought to have a debate on NATO. We seem to have a defence organisation that is concerned with military matters, totally ignoring the fact that economic weapons are being used as well. As a result of that, we have been very ineffective in taking action on the position in international law and the treaty agreements with regard to Crimea. We have been pretty powerless, given the dependence of Germany and other countries on gas supplies, and so on.
Equally, we could have a very important debate on Europe, ahead of any proposed renegotiations. Again, we have not done that. So I would hope that we can have more time given to general debates.
The problem is in part a very fundamental one: we in the House of Lords have suffered from the way that the Labour Government, in a practice unfortunately followed by the Conservative Government, programmed their business. The result is that, as we well know—the noble Baroness, Lady Hollis, is not in her place, but she and I know this—Bills came here time and again with much of them not debated at all. There have certainly been a number of very big debates where that has been the case. The result is that we are spending all our time on legislation and virtually no time on general debates that might be of great use in holding the Government to account and informing them, given the level of expertise in this House.
Finally, I want to make a specific point with regard to a proposal in the gracious Speech for a Bill to,
“bolster investment in infrastructure … to improve economic competitiveness”.
I am very worried, as an economist, about the way in which we look at investment proposals. Traditionally, we have done it by raising capital, investing the capital and hoping to get a return on it, using discounted flow and all the other technical issues, with which I shall not burden the House now. Instead of that, we have seen increasingly with infrastructure projects, whether it is the renewal of railway equipment or wind farms, the use of the pricing mechanism to raise the money to make the investment. Those higher prices will very often be paid by people who will not live to see the benefit of that investment. Perhaps one can argue from an intergenerational point of view that this is only fair, given that we are in danger of landing our children and grandchildren with a lot of debt, but we will also give them a lot of infrastructure for which we have paid a far greater sum than is proportionate to the benefit we will derive from it. The Treasury uses the so-called yellow book as the basis for making these
investment decisions. I do not think that they are being made correctly at present. I do not think that it is right to raise money by putting the cost on existing suppliers for the reason I have mentioned. This is a Bill that we will have to debate carefully and there are a number of others in the programme. However, I also think the case for having rather more general debates in the run-up to the general election is very strong indeed.
6.40 pm
Baroness Donaghy (Lab): My Lords, a week ago I enjoyed an evening with the Involvement and Participation Association, of which I am vice-president. Employers from top-rank organisations talked about employee engagement, trade unions were respected and HR directors were committed to encouraging a voice for workers whether or not they were in a union. However, I noted that this is an unusual experience in the UK, where the world of work is more likely to witness increasing levels of inequality in our society and no consultation. It was reported at that AGM that an alarming number of employers cited e-mails as the main method of communication and even consultation with their employees. Fairness and dignity at work are not just about money. An example was given of a FTSE 100 company that sent a standardised retirement letter to an employee after 40 years’ service and managed to get the spelling of his name wrong as well. His colleagues were more agitated about this than any other more tangible grievances about pay and conditions.
The world of work is central to all of us, whether it is the 30 million people in the UK who are in work or those who are seeking it. Work provides an income essential for living, helps to place us in society and sometimes provides dignity and enjoyment, but when is it ever discussed as a central issue in this Parliament? It is referred to in terms of statistics to show how successful or otherwise a Government are in providing jobs, when loosening worker protections on the premise that employers will grow their businesses on the back of it and when employers want to make it easier and easier to dismiss workers. You would think that employment tribunals are the only things that matter in the world of work, when they are in fact the rarest element—something that the vast majority of workers never experience and never will. However, the tail continues to wag the dog. Having said that, I believe that the changes to employment tribunals made by the coalition Government are a disgrace and the sooner they are repealed the better.
However, the fundamental issues in the world of work are what kind of society we want to be, why we are less productive in this country, why there is growing inequality and diminishing fairness at work and why the relative pay gap between workers and executives has stretched almost beyond belief. Job insecurity and casualisation have not, and will not, improve productivity. As my noble friend Lady Drake said, that does not help with applying for mortgages, planning for one’s children’s future or saving for a pension. We are building a legacy of long-term poverty and giving future generations a choice between increased state dependency or a return to the dark ages.
I am not saying that casual working should be abolished: it has always been with us. I remember that at the University of London in the 1960s the Senate House had a pool of what were referred to as “call girls” to assist at the busier times. In some industries the workforce prefers to opt for a flexible system which suits both employee and employer—although not necessarily the collection of tax. However, I am talking about the wholesale abuse of casualisation. I applaud the proposals in the Pickavance report, commissioned by Ed Miliband, which calls for a code of practice to be drawn up, in conjunction with ACAS, protecting workers after six months if they work regular hours and banning compulsory standby and exclusivity. An amendment to the Employment Rights Act 1996 to require employers to provide information about basic terms and conditions to all workers within two months of commencing work would also be welcome—in other words, extending the right which employees already enjoy.
The increasing pay gap between worker and executive represents a massive corporate failure in the UK and is a threat to the public’s trust in business. Seventy-six per cent of voters think that big business has too much power over government. In 1980, the pay for a FTSE 100 chief executive was 20 times the national average; in the late 1990s, it had risen to 60 times the national average, and today it is 160 times the national average. The exasperation of the public with our political system, although manifested in our newspapers as exasperation with the failure to deal with immigration or with politicians on the make, may really be about inequality and a feeling of powerlessness. I find it interesting that 80% of UKIP voters are as likely as the wider population to demand government action to reduce inequality.
The Government have no programme to make this a priority or even to tackle increased inequality; instead, they search for ways to deprive people of their rights. For instance, why on earth are they proposing to take the police out of health and safety legislation? Are the police not workers, too? I congratulate the leader of my party, Ed Miliband, on saying that low pay will be a priority for the next Labour Government. It is important to retain the independence of the Low Pay Commission and in doing so and to strengthen it.
Similarly, why not have a statutory requirement for workers to sit on boards? It is only a tiny aspect of worker involvement but it will be resisted as if it was the equivalent of the peasants’ revolt. It was resisted by employers in Germany but is now part of the country’s culture and its successful economy. Relativity should be central to every enterprise. Unfair pay differentials have consequences—more sickness absence and higher staff turnover as well as lower productivity.
It is good news that we have 30.43 million people in work in the first quarter of this year, but then we have more people due to demographics and immigration. However, 2.2 million unemployed is not good news. The number of unemployed women aged 50 and over has increased by almost half since the coalition came to power: 162,000 older women are unemployed. They have talent and experience and they vote. We need an honest appraisal of what kind of jobs will be needed
in the future. The Edge Foundation has said that nine of the 10 occupations most in demand in the future will require vocational skills.
Finally, the references to employment in the Queen’s Speech were predictable, with some being good and some bad depending on the detail. However, as the noble Lord, Lord Higgins, said, there is also a reference to,
“work to build a fairer society”.
I have seen no evidence of this yet but, if the Government are sincere, they should come forward with proposals to ensure that workers have a voice, are not treated as commodities, are paid fairly, are given appropriate job security and are not paid 80 times less than their boss. That really would be a fairer society.
6.49 pm
Baroness Sharp of Guildford (LD): My Lords, I start with the sentence in the gracious Speech that,
“Legislation will be introduced to help make the United Kingdom the most attractive place to start, finance and grow a business”.
The legislation that will follow is the small business, enterprise and employment Bill.
For a long time, I have had a considerable interest in science-based small firms. As the noble Baroness, Lady Warwick, mentioned, the UK has a very strong science base. We also have a surprisingly strong record in the development of spinout companies from our universities. Our problem has been that, long term, we failed to grow these small spinout companies into the Microsofts and Googles of this world. A particular problem arises in the bridging of the gap between pilot projects and getting a business up and running. I do not very much like the phrase, “bridging the valley of death”. In the days very long ago when I worked at the National Economic Development Office—NEDO—we called it the pre-production development gap and we had a pre-production development scheme to bridge it. It is the same problem. It has been with us for a very long time.
When I was at the University of Sussex, I belonged to a group that called itself the triple helix group. It maintained that successful innovation required three players all interacting with each other: universities linking up with the private sector, but the Government also had an important role. They all played a part in the process. I was therefore very interested in the complementarity between these three players being emphasised again in a recent report issued by the Campaign for Science and Engineering, The Economic Significance of the UK Science Base. That was written by three economists, including the son of the noble Lord, Lord Haskel—who will follow me in this debate. The report shows very clearly that investing in public sector research helps to stimulate private sector expenditures and that the two are very complementary. As Professor Alan Hughes—another of the three authors —puts it, the two,
“should not be seen as substitutes in the drive to enhance the productivity performance of the UK”.
The report suggests that there is a virtuous circle in which an increase in public sector investment in research leads to an increase in private sector research which in
turn increases the capacity of the private sector to benefit from and use public sector research, thus amplifying the overall economic benefit to society as a whole.
I have also been quite interested to see that over time the coalition has come to adopt a somewhat similar philosophy towards innovation. There was a time when my friend in the other place, Vince Cable, who led a working party on industrial policy for the Liberal Democrats, advocated the total abolition of what was then the DTI and is now BIS—his own department. Above all, that working party wanted to see the abolition of all policies of industrial support. Yet, over the past four years he and David Willetts, the Minister for Universities and Science, put together what might be described as a new industrial policy built around the exploitation of the science base and the development of new industries associated with new technologies. That followed very much this triple helix model where the Government play an important intermediary role in helping bridge the gap between early and late-stage development. Measures announced in the Queen’s Speech seem to take this one stage further. The Government set up, through the Technology Strategy Board, Catalyst and Catapult centres, influenced by the German and US models. Opening up access to public procurement for small and medium-sized businesses is something the Americans have done for a long time and which the Science and Technology Committee of this House has long urged upon the Government. That is a new, important and very welcome step.
However, I also urge the Government to think further about the implications of the triple helix model of complementarity between Government, universities and the private sector in promoting innovation. In our report last year on regenerative medicine, the Science and Technology Committee examined the role of the cell therapy Catapult centre set up in May 2012 as one of the then seven TSB technology and innovation centres that aim to help businesses adopt, develop and exploit innovative products and technologies. It was described as,
“a new approach to bridging the investment ‘valley of death’”.
The Technology Strategy Board put £200 million into the seven Catapult centres—approximately £30 million into each centre. This contrasted with the $3 billion put into the California Institute for Regenerative Medicine. It is not surprising that one of the report’s main conclusions was that the Technology Strategy Board funding was insufficient and that the Government could not rely upon the private sector and venture capital to fill the gap.
In both Germany and the US, the state or regional level of government plays a substantive role in helping fund applied research, often putting together a package of private and public funding and mobilising local financial intermediaries. This level of funding is largely absent in the UK but the committee suggested that the Technology Strategy Board and the Economic and Social Research Council get together and fund an evaluation of innovative funding models in this and other countries to see if more effective methods could be found. This suggestion was welcomed by both the research council and TSB, and by the Government.
That was last autumn. Is it proceeding? I realise that the Minister will not have the information to hand but could he write to me with the answer on what is happening with that suggestion?
I finish by endorsing the remarks of the noble Lord, Lord Aberdare, about the new apprenticeship proposals coming forward from the Government. Like him, I find myself very worried about the sheer complexity of the payment mechanisms, the five different levels of apprenticeship that will be created and the sheer impossibility of small and medium-sized companies handling these new apprenticeship positions. I have just been reading and enjoying the book by Professor Anthony King and Ivor Crewe, The Blunders of Our Governments. It seems that we may be replaying two of those blunders: the individual learning accounts and the tax credit accounts. I recognise that there are currently pilots and trailblazing. I hope very much that we will learn the lessons that can be learnt from them.
6.57 pm
Lord Haskel (Lab): My Lords, when opening this debate, the Minister said that his proposed legislation would encourage trust. I am very glad he said that because during April there were two popular polls about people’s trust in business, one for the BBC and one for the Financial Times. Both said that 61% of us did not trust business. I am not making a political point. Half of those who felt this way identified themselves as Conservatives. The Minister is right: there is a warning there that it would be wrong of us to ignore.
Most of us know why this is happening. My noble friend Lady Donaghy just said that it was to do with conditions of employment. For years, some of us have been victims of mis-selling by the banks. We have not been getting a square deal from energy companies. As my noble friend Lady Hayter told us, we have not been getting a square deal from landlords. We have not been getting a square deal from rail operators or pension managers and suppliers of public services from the private sector have been disgraced. This is in contrast with booming executive pay and a long line of companies which arrange their affairs so that they almost cease to pay corporation tax, leaving the rest of us to foot the bill.
My noble friend Lady Sherlock reminded us in her opening speech that for years there has been little alignment between the financial markets, our long-term interest, jobs and the common good. This dissatisfaction applies to Government too. As problems arise, so they are dealt with on an ad hoc basis, reacting to events—or to labour policies. This is what my noble friend Lord Liddle called a disparate agenda. This fiddling only adds to uncertainty. It also contributes to the complexity and inefficiency of our public finances. Noble Lords can read the whole depressing story in the recent Institute for Fiscal Studies paper, Tax Without Design.
What can we do to help bring back public trust in business? The answer lies in an intellectually coherent strategy that provides a framework for all of these activities. In his memorable maiden speech, the noble Lord, Lord Bamford, called it a coherent industrial strategy, and I agree. It provides a basis for long-term
decision-making. BIS likes to think that we have a long-term strategy, but that is news to everybody else. To succeed, this strategy has to be respected. To make sure it is adhered to throughout government, I would like to see it enshrined in law. We have laid out a strategy in law for health, for climate change, for education and for austerity for our public finances, so why not for business?
What should this business strategy—a strategy with teeth—contain? In part, my noble friend Lord Liddle told us when he called for a comprehensive ethical agenda. We know that most business leaders are committed to high ethical standards: they know that this builds trust. The problem is to convince and communicate this to everybody else in their organisations. Well, there are UN global guidelines that respond to this. Those guidelines, as part of a business strategy in a legal framework, will help rebuild trust in business. We are virtually having to do this with the banking industry.
Quite rightly, business organisations call for certainty so they can plan for the longer term. This means that long-term institutions, such as the Technology Strategy Board, which is so important in developing the technology that the noble Baroness, Lady Wilcox, told us about, have to be given protection of law so that, like the RDAs, they cannot just be abolished on a whim. Part of the answer is not just to regulate, but to rebalance.
Whatever the outcome of the Scottish referendum, surely significant to all of us is the need for more local accountability, which means getting away from the culture of doing deals with central government. I join the Public Accounts Committee in asking why, of the £309 billion set aside by the Government since 2010 for promoting growth in the regions, only £400 million has been allocated. The noble Lord, Lord Heseltine, in his paper, No Stone Unturned, speaks to this. We see many contributing to economic progress, but fewer benefiting. A proper, legal industrial strategy will help us break free from markets that work only for themselves. The noble Lord, Lord Tugendhat, spoke about this. Read the speeches made by the Governor of the Bank of England to the recent inclusive capitalism conference: that will convince noble Lords, even if I do not.
Public investment must also feature, as the noble Baroness, Lady Sharp, just told us. After all, we know, on very good authority, about the benefits of public investment in science. Of course, the strategy must also protect the public interest, by, for instance, stating clearly that tax allowances and incentives are for investment, not for financial dodges. The gracious Speech mentions fair pay and job security, and yes, the Government are trying to stimulate manufacturing, which is so important to the right reverend Prelate the Bishop of Durham. However, all of this is insufficient, random and, most importantly, it lacks coherence.
What about the politics of this? A strategy of this kind reflects the politics of hope. It challenges the insecurity created by blanket austerity. It connects with Europe 2020 and completing the single market. It puts immigration into a non-racial context. Most importantly, it faces up to the huge scale of the challenge facing us, instead of just tinkering with it. Of course, no law will build economic revival and growth—business will. However, the task will be infinitely harder if we fail to win back that 61% of the population who no
longer trust business. I am certainly content with the Motion to thank Her Majesty for the gracious Speech, but like many noble Lords—some of whom I have mentioned—I regret that it does not contain an industrial strategy. That will obviously have to be left to a Labour Administration.
7.06 pm
Lord Howe of Aberavon (Con): My Lords, I follow the noble Lord, Lord Haskel, with a similar approach to the problems we are all trying to face. He started off by saying that there was no agenda. I would add something that is almost more serious, where, for our society and for our economy in particular, there is no forum or framework and where we have a double shambles. I have a particular emphasis on the absence of any coherent, comprehensive system of weights and measures.
British weights and measures are in a universal mess: litres for petrol and fizzy drinks; pints for beer and milk. We use metres and kilometres for athletics and miles per gallon for cars. The metric system is used in schools, yet all too often pounds and ounces are still used in the market. It is impossible to argue that this chaos does not matter. The fact is that it increases costs, confuses shoppers and managers, leads to serious misunderstandings, causes accidents, wastes our children’s education and, quite bluntly, puts us all to shame.
Almost 800 years ago, Britain’s first charter of human rights, Magna Carta, proclaimed that there should be,
“one measure of wine throughout our whole realm … one measure of corn … and one width of cloth”.
Before then, and ever since, every civilised society has recognised the need for one set, and only one set, of standard measures. How did we get into this curious mess? We have been dithering for almost 150 years. As long ago as 1862, a Commons Select Committee unanimously recommended the adoption of the metric system. A century later, in 1965, the decision was finally taken to go metric over the next 10 years. However, it is still shambling along beside the old system. Alas, the Government then, of whom I was a member, foolishly accepted the recommendation to go that way. We are still stuck half way, while the rest of the world sensibly and quickly moved on. Australia, Kenya, New Zealand, South Africa, India and Jamaica—members of what we used to call the British Commonwealth—have long completed the entire change, and Ireland, our neighbour, completed the process as quickly as those countries did.
Quite frankly, the proposition that I wish to emphasise to the House is that plainly we cannot stay where we are, with two confused, competing systems. It would be madness to go backwards. The only solution is to complete the changeover to metric as swiftly and cleanly as possible. It is long past time for us to summon up the will to get ourselves out of the present wasteful, untidy mess.
7.10 pm
Lord Desai (Lab): My Lords, it is a great honour to follow the noble and learned Lord, Lord Howe of Aberavon. In the short time that I have, I want to do
two things. The first is to try out a somewhat novel idea, and maybe it will be one for the Government to take away and work on, and the second is to talk a little more about the manufacturing strategy that has been discussed.
We have now had four years of austerity. By and large, the deflationary move has been successful inasmuch as the economy has now revived. However, there is a particular anomaly which I want to point out and which has not attracted much attention. Our debt is about £1,300 billion, give or take £100 billion here or there. The surprising thing is that the policy of quantitative easing followed by the Bank of England means that the Bank owes £385 billion of that debt. Therefore, we are in the peculiar situation of the Government paying interest to the Bank of England, which the Bank of England returns to the Government with thanks.
Nobody has said this yet, although my noble friend Lord Myners mentioned it in the debate on the Budget, but the Government could take that £385 billion of debt owed by the Bank of England and cancel it. However, there is a snag: against the £385 billion of assets, the Bank of England has created a liability—that is, it has printed money. Therefore, I think that the best thing for the Government to do would be to sell the Bank of England £385 billion-worth of zero-interest bonds so that the books could be balanced and the Government could say what interest should be paid on the £385 billion. This is a very simple, effective device which nobody has thought about but I offer it to the Government out of the goodness of my heart.
By and large, monetary policy has not worked. At best, you could say that it has prevented things getting worse, but only active fiscal policy can do things which monetary policy cannot do, and a device such as that would release funds for fiscal policy to do more than it has been able to do so far. In a sense, it would give the Government a clever escape hatch through which they could save £30 billion or whatever, depending on how much interest they pay on the debt. That is something that I hope somebody will think about.
It may be said, “You can’t do that because you’ll have to print money against this debt”, but the money has been printed and is out there. With QE, the Bank of England bought £385 billion-worth of debt from the market. One alternative would be for it to sell it back and withdraw the money, but we do not need that. Inflation is very low. The central banks are competing with each other to raise the rate of inflation up to 2%. I thought that I would never live to see it, having lived through the great monetarist days when the noble and learned Lord, Lord Howe, was cracking the whip with his policy. So we already have a situation where the money is out there. We want the money to go out and stimulate the economy. The Government are paying too much interest— about a quarter of it to the Bank of England, which makes no sense—but if they think slightly outside the box, they could improve the prospects for the economy.
I shall now get a little more down to earth. When I came to your Lordships’ House roughly 23 years ago, on 18 June 1991, my maiden speech was on manufacturing and why there was no future in manufacturing at all. We ought to stop getting obsessed about manufacturing
because it diverts attention from the economy. In his brilliant maiden speech, the noble Lord, Lord Bamford, pointed out that manufacturing is very valuable. Of course it is very valuable—there is no doubt about that—but it does not need to be expanded. Over the past 23 years since I made that speech, manufacturing has shrunk and the economy has become more prosperous.
The point is that in manufacturing we have concentrated on genuinely high-value-added jobs in high tech, which is the only place where we can survive in international competitive business. The UK economy cannot survive in labour-intensive manufacturing. You cannot create millions of jobs in UK manufacturing—there are people in China, Indonesia and Malaysia who will beat us at that—so we have to concentrate our manufacturing on high-value-added, high-tech products. It is a very competitive business which requires as a minimum, as noble Lords have said, a lot of research on the triple helix and so on. A good higher education sector is also required. Along with that, we have to be quite ruthless about eliminating non-competitive business and not subsidising it.
If we are to have a prosperous economy, we need a small highly valuable manufacturing sector whose contribution to national income in percentage terms is way above its contribution to employment in percentage terms—that is, we have to have the most productive people going into manufacturing. That is why this song and dance about apprenticeships surprises me. In around the 1880s, there were government reports that we were falling behind Germany. It was asked why the Germans were ahead of us. It was said that they had apprenticeships and we did not. Some 130 years later, we are still talking about apprenticeships. Nobody needs 2 million apprentices—certainly not in manufacturing.
Talking about apprentices produces a false concreteness —it looks as though people are doing something useful and highly skilled. We need a lot of people in healthcare, for example. Our real labour needs are going to be in what we might call the soft industries: healthcare, education and the arts. The arts are a very valuable and profitable part of the economy and one in which we have a comparative advantage. Therefore, when thinking about apprenticeships or the economy, we should not think too much about expanding manufacturing. Economic prosperity depends on doing what we do best, and very often that is not the concrete but the abstract. Britain is very good at abstract things—one has only to think of Shakespeare. We can sell good, expertly made products abroad. Let us stick to that and not get into metal bashing.
7.18 pm
Lord Mitchell (Lab): My Lords, I was going to apologise to the noble Lord, Lord Higgins, who I see is just leaving his place. As he will hear, my speech is indeed on my iPad but I promise him that I will try to interact with the Chamber as I am giving it. Anyhow, as an ageing geek, I have to show my younger colleagues that I am still cool.
Your Lordships’ House is always at its best when it is fortunate to hear outstanding maiden speeches. To have heard two in one day from two giants in their field, such as the noble Lord, Lord Bamford, and the right reverend Prelate the Bishop of Durham, is a very special treat.
This evening I want to talk about a huge British business success story—or I was going to before the screen went blank; it is how you react under fire that matters. It is a story which in fact started under the previous Government and has flourished under this one, and it concerns an industry with which I have been personally associated for nearly 50 years. I refer, of course, to the digital economy.
When I started all those years ago, it was all about massive computers costing hundreds of thousands of pounds. Input was by way of punch cards or paper tape and storage was on massive disks and whirring tape drives. It has changed just a tad. I remember reading a book in the 1990s on the projected winners and losers in the data processing industry, as it was then called. The only names it got right were IBM and Hewlett-Packard. Not included were Apple, Google, Microsoft, Facebook and Twitter. Most of them did not even exist. Google, the third-largest company in the world by capitalisation, is only 16 years old. Has there ever been such a dramatic structural change in such a massive industry?
The UK—which, to be honest, used to be a small participator—has now become a major player in the new digital economy. For evidence we can do no better than to look here in London and, in particular, at Tech City in Shoreditch. Of all the new jobs in London, 27% are in the tech and digital sector; 600,000 people in London work in this sector. Between 2009 and 2012, the number of digital tech companies in London grew from 50,000 to 88,000—a growth of 76%. Tech City took hold during the Labour Government and it has blossomed during this Government. It was not planned by government; it was not financed by government; it simply happened.
Throughout the UK, the digital economy is also world-beating. It has a value of £121 billion, which is equal to 8.3% of GDP. It is expected to grow at a rate of 11% per annum. Over the next five years it will employ more than 500,000 new entrants. On the consumer side, the UK is the number one user of e-commerce in the world. In the Government Digital Service, set up under this Government, we have an online service that any country would be proud of. This may sound strange coming from these Benches, but I believe that this Government have done a good job in promoting entrepreneurial drive in this digital tech sector. Certainly if we on this side win the next general election, we will continue that good work.
My biggest criticism is to do with broadband, and I am sure that if the Minister were here—which he is not—he would be able to comment on this. Many infrastructure projects are being contemplated: HS2, Crossrail 2, new motorways, new stations, new runways and so on. It is all good stuff and it all helps to ensure that the UK is fully equipped for the 21st century. However, I do not hear enough about broadband and mobile connectivity. Of course the broadband project rolls forward, but it is ponderous, and it does little for those living in rural communities. On a recent visit to Norwich I was staggered to hear about the snail-pace broadband that they have and the mobile phone connections that in many areas are non-existent.
It took only a brief meeting with the Minister responsible, Ed Vaizey, for me to understand the problem. There was no sense of urgency about a situation that is very critical. Can somebody please explain to me why a project with such infrastructure implications is located in the DCMS? What does it know about rolling out mega projects? As exciting as the digital revolution may be, there really are some dangers from the misuse of technology in general and the internet in particular. Online payday lending is just one such danger. Noble Lords will know that I have campaigned to control online payday loan companies. Yesterday I introduced a Private Member’s Bill that will ban TV advertising of payday loan advertisements before the 9 pm watershed. I hope that I will have the House’s support on it.
There are also dangers to employment. Let us look just at the retail sector. Last Christmas, 20% of all retail sales were online; it was a massive increase on the year before. Retail employs 3 million people. If this online trend continues—and it will—there will be massive redundancies on our high streets. We have already seen the demise of HMV, Jessops and Blockbuster, each one of them outflanked by rapid technological advance. What is true of retail is also true of banks. They, too, are under threat by new online competitors. Our response must be to anticipate these dangers. Our people need to be taught digital skills at every level.
I shall end my remarks on the subject of privacy. Snowden has shown us just how exposed we all are. The European Court of Justice opined two weeks ago that we all have the right to be forgotten. If you have an up-to-date iPhone, then every location you have visited is recorded on that phone—when you arrived there and when you left. If anybody would like me to show them, I can do so. Who gave them permission to store this very private information without our explicit permission? Do they have access to it? They say not, but can we be sure?
The next big thing in the digital world is wearable technology—devices on our wrists which can store data about our health. These data can be sent to our doctors but perhaps also to our insurance companies, and to who else? Protection should be in place to ensure that only people whom we personally authorise are allowed to have access to such sensitive information.
In five days’ time we will be celebrating the 799th anniversary of the Magna Carta—the contract which began the process of our civil rights. Maybe for the 800th anniversary, next year, we should have a digital Magna Carta that guarantees all of us protection from all unauthorised snooping into our private lives.
7.27 pm
Lord Elton (Con): My Lords, I am a refugee in the sense that this is the only night on which I can be present for the start and finish of the debate. I apologise for the fact that my three very short subjects are not on what might be considered the notional Order Paper for tonight.
I congratulate both the noble Lord, Lord Bamford, and the right reverend Prelate the Bishop of Durham on their contributions. I was particularly heartened by the right reverend Prelate’s plug for the north-east as the sole region in profit on its overseas account, and
regarding the charming nature of almost all the population. Coming from the south-east I am not familiar with the latter condition. In fact, I decided some time ago that I wanted to address the extraordinary change that has come over the nature of British society during my lifetime. I could go into lengthy detail, but it is worth condensing it by saying that one’s default expectation of anybody who one was dealing with was that they would be honest, spoke the truth, kept the law, kept their word, honoured their cheques if they were the sort of people who had cheque-books, be faithful to their spouses and, of course, would know the difference between right and wrong and would stand on the side of right. That is what one expected and anything else was a disappointment, and quite a severe one on some occasions.
An illustration of the extent of the change is simply the length of the traffic jam going to primary schools in the mornings—parents cannot risk their children going to school on their own. In my youth children of six were expected to be able to walk four miles to school and four miles back every day unaccompanied, and people did not worry. They played in the street and people did not worry. They played in the fields and people did not worry. In many rural communities the way in which you told your neighbours what was going on at home was that you locked the front door to show that you were away and left the back door unlocked to show that they were welcome to come in, even so.
Life has changed and one has to ask why. The reasons are many and complex; they are economic, political, and so on. However, right at the basis is the difference that in my youth and until my middle age—decreasingly towards my middle age—the lifeblood of this country flowed through its churches, chapels, cathedrals, synagogues and meeting houses. People could not escape the repetition and emphasis of the moral truths which sustain the civilised society we wish to sustain—a safe, stable and mutually respecting society.
If noble Lords doubt my emphasis on the extent of the influences of the religious establishment at an appropriate point in our history, I should say that I remember clearly Sunday 26 May 1940, when we went to the big church near to where we lived in Old Headington in what is now north Oxford. We went 20 minutes early but could not get in without a struggle—many people could not get in at all—because King George VI had issued a call to the nation the previous week to pray for our troops surrounded at Dunkirk. I will not go into the history of the miracle that followed, but the nation went to pray—and the nation knew its morals because the nation went to church.
It is not the business of Government to fill churches but it is their business to ensure that there is some connection between the morality of the individual and the ethics of society. Indeed it is their business to see that individuals have a morality. I want to put an idea into the heads of the Ministers in the Department for Education that perhaps the time has come to reinstate religious studies in schools up to the sixth form and to give it the same status as the STEM subjects now have. If you make a subject an examination subject there is a
great enthusiasm to study it and you do not damage your educational career by doing so. On the other hand, if it is not of that status and does not carry examination weight—it is not examinable in some schools—you lose customers. And it should then be connected to the teaching of civics so that people can see a connection between the morality which gives the reason for ethics, and the ethics which give stability to society. That is all I wish to say about that.
I chimed a little with the noble Baroness, Lady Donaghy—with whom I also communicate via Hansard—when she spoke about the necessity for a fair society. I am an unashamed Tory. There must be inequality—you cannot have competition without inequality—but you also need fairness, and it worries me that there is no apparent restraint on the increasing vertiginous gap between the richest and the poorest in this country. My tiny suggestion is that we need more effective charitable giving in this country. At present we use gift aid, but that only provides motivation for the charities to ask donors to subscribe to the gift aid scheme. We want to motivate people who are not yet donors to become donors. This means that they want to get some benefit from it too. If what I am about to suggest was carried out 100% it would probably cripple that part of the Treasury that depends on income tax but, done proportionately, if mega-rich people were given a fractional percentage reduction in the income they do not give away, they would have a large incentive to give a proportion away. If you want to find a way of moderating it—we were talking about the connection of the churches, ethics and society—there is a good biblical example of 10% being a suitable amount to encourage people to give away. Anything more, of course, would be welcome.
On the Queen’s Speech, I find it extraordinary that we, in seeking to strike a figure on the world stage and influence policy despite our reduced military strength, stand as the founders of the greatest commonwealth ever seen. Our population is 64 million and the Commonwealth population is 2.2 thousand million. It embraces almost every ethnic group and just about every religion in the world and spreads around the globe. It was our invention and we are part of it. Ministers write speeches declaring the situation in this country and how we are going to deal with it. They prepare it for delivery in this House, with the other House present below the Bar, by the head of that great institution—who has been for decades the head of it—with not one word mentioned of what it is achieving, what it has achieved, what it could achieve, or how we are to exploit it or improve it. It does not mention the fact that CHOGM commissioned and received a report on the restriction of sexual violence in conflict, which is one of the flagship policies the Foreign Office is promoting. I find that extraordinary.
I hope that the Minister, through his colleague, will let us know the importance that the Government—and other Governments have not done any better—this country and all parties give to this great organisation, which could give us so much influence and support around the world. What do they really think of it and how often has it figured in the Queen’s Speech in the past 10 years?
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Lord Morris of Handsworth (Lab): My Lords, I, too, pay tribute to the gracious Speech. It scanned the horizons of the social and economic landscape of our country. However, the economic landscape experienced by millions of our fellow citizens is a very different place. The strategy of the coalition Government remains unchanged: it is to reward the rich through the tax system and punish the poor through policies such as the bedroom tax. However, figures from the Office for National Statistics are an indictment of the Government’s policies. They show that 1% of Britain’s richest individuals have accumulated as much wealth as 55% of the poorest.
The coalition Government believe that they can eradicate poverty by making work pay, and it is true that the unemployment figures are coming down and more people are in work. That is to be welcomed. However, yesterday we heard from the coalition’s own watchdog on poverty, the Social Mobility and Child Poverty Commission. Its report states that the Government’s belief that they can end child poverty by 2020, mainly through the labour market, does not look remotely realistic. The Commission shows that 3.5 million children are expected to be in absolute poverty in Britain by 2020—almost five times as many as the goals set by the Government. The report states that even if parental employment reached 100%—
“far beyond what has ever been achieved anywhere in the world”—
there would have to be a substantial increase in hours worked, and current policies would not enable that to happen.
Many parents are the victims of in-work poverty, unable to command sufficient earnings to escape low incomes and moving in and out of insecure, short-term and low-paid employment. We hear similar stories from organisations such as the Trussell Trust, which recently reported that, of the 900,000 adults and children who visited its food banks last year, 30% were in financial trouble because of benefit delays and 17% had problems caused by benefit changes, while 20% of referrals at the food banks were a result of low family incomes.
Last year, the annual report of the New Policy Institute gave a comprehensive picture of poverty in the United Kingdom. It showed that, of 13 million people living in poverty, more than half were from working families. It is just not true that people who are living in poverty are shy of work. We have heard too much about those who draw the curtains at 9 am and get back under the duvet. No one bothered to ask about the bus drivers or those in our hospitals working very late and coming home in the morning, who are entitled to their rest. The New Policy Institute report concluded that the changes to the welfare system actually made poverty worse. For work to be the route out of poverty, work must provide a living wage. You can work as much as you like, but if your earnings do not equate to the accepted level of sustenance, you are in poverty. Although I welcome any sanctions against employers not paying the legal minimum wage, I look forward to the legislation or to any proposals that would lift the minimum wage to become a living wage.
I was also pleased to note that attention was promised regarding the reform of so-called zero-hours contracts. I am old fashioned and have always been led to believe that a contract has rights on the one hand and obligations on the other. It seems that this is a one-sided development for contracts in our employment sector. An employer has all the rights and the ability to exercise them, and makes all the demands, while the employee has no rights—only an obligation to respond to the employer’s demands. These contracts are misnamed. They are not zero-hours contracts but “no rights” contracts, and they should be described as what they are. How do you organise the family budget that depends on the uncertainty of a zero-hours contract, which means you have no idea when you will work or, indeed, how much you will earn? On this side of the House, we look forward to seeing the draft proposals that would make a difference to families and individuals and give some certainty in respect of the obligations that they may or may not take on.
There is a pattern throughout the policies that we are experiencing. The Government pursue families and individuals who have no means to fight back. Legal aid and access to justice are restricted, including for workers who might have a fair claim for unfair dismissal. As we heard earlier in the debate, the sanctions start with the inability to pay the fees for hearing a case of alleged unfair dismissal.
As I reflect on the gracious Speech, I wish that I could have heard how we can help those of our citizens in greatest need. It leaves me to conclude that Britain can, nevertheless, do better. For the sake of all our citizens, Britain must do better.
7.45 pm
Lord Clement-Jones (LD): My Lords, in many respects the Queen’s Speech is to be welcomed, precisely for the fact that it does not contain a huge amount of new legislation. None the less, I welcome the carryover of the Consumer Rights Bill and the Deregulation Bill. Curiously, I note for the aspiring statesmen among us that it will, among other things, make statues easier to erect. I do not know whether your Lordships noticed that.
In particular, I welcome the introduction of the small business and enterprise Bill outlined by my noble friend Lord Livingston because today, among other issues, I want to deal with the key question of start-ups in the tech and creative sector and what we need to do to ensure their success. I enjoyed the digital speech of the noble Lord, Lord Mitchell. According to official figures, the creative sector grew by almost 10% in 2012 and outperformed all other sectors of UK industry. It accounted for 1.6 million jobs in 2012. However, this underestimates the contribution of the creative industries. Many would say that they employ at least 2 million, so I welcome the Government’s intention to reclassify their contribution to GDP to bring back in software. We should not forget, too, the key role that arts and culture perform in providing the creative industries with talent. The approach to their funding needs reappraising, particularly in the light of the CEBR report on their contribution to the economy.
A crucial factor in one area of growth has been the tax treatment of film production, followed by high-end television and animation. In April, video games relief
was cleared by the EU, which was excellent news. The new theatre production tax relief and patent box will have a major impact too. From a recent presentation at the Google Campus in Tech City to the Communications Committee, it is clear that we have come a long way since Silicon Roundabout morphed into Tech City. The noble Lord, Lord Mitchell, gave some very interesting figures. There have been more than 15,000 start-ups there in each of the past two years.
More widely, Trip Hawkins, who founded Electronic Arts in 1982, recently said that Britain is the most creative country in the world and can lure top technology businesses away from Silicon Valley. However, to fulfil that promise, we need to ensure they have access to the skills and finance they need to grow. It seems they now have good access to early-stage finance with a variety of angel investors through the Government’s enterprise investment schemes. Indeed, these schemes in the UK are now said to be among the best in the world. Tech companies have also benefited from the business growth fund, enterprise capital funds and the enterprise finance guarantee. Crowdfunding is beginning to have a real impact. Exceptionally among the banks, Santander has introduced its imaginative breakthrough programme for fast-growing start-ups. The important thing now, as the Creative Industries Council has identified, is promotion of these schemes.
However, we were told that it is in the later stages, where hundreds of million of pounds are required for investment or a venture capital exit is needed, where we are behind the US. Are UK financial institutions too risk-averse? If so, there is a danger of business moving to the US at this funding stage. None the less, US institutions are now moving here which understand the potential of tech and creative start-ups. There is also good evidence from recent listings on the Stock Exchange that we are making progress. The creation of the new High Growth Segment to encourage companies to list here is having an impact.
The talent available, however, is far below what we need. Start-ups in Tech City need a mixture of technical and creative skills to develop their new digital services. Knowledge of digital technologies is particularly crucial. We need 1 million tech jobs to be filled by 2020 to keep up with demand. So I welcome the inclusion in the curriculum of coding, or computer science, from this September for five to 16 year-olds. But even if the pipeline from schools and universities is there, finding the right talent can be tough. Training and proper apprenticeships are hugely important.
Even if we fill the gap in the long term, we will in the short term still be reliant on overseas undergraduates and postgraduates. I welcome the developments with the exceptional talent visas, which show some increased flexibility, but as Policy Exchange’s recently published Technology Manifesto makes clear, we must ensure our visa regime is fast and user-friendly, to attract them into both employment and our higher education institutions.
If we get it right the prize is very great. Policy Exchange says that the internet economy will be 16% of GDP by 2016. We are already the highest net
exporter of computer and information services among the G7 countries. Already our online retail surplus is larger than that of Germany and the US combined. This also means that we need to break down the barriers to e-commerce across the EU to create a genuine European digital single market.
Clusters, or hubs, are of huge importance to the tech and creative industries and, as Policy Exchange says, there are many more than just those in London. In terms of innovation, creativity, finance, promotion and skills, clustering is now the name of the game. But this raises the whole question of whether our cities operate on the right scale, especially when compared with cities in emerging markets, and whether they have the necessary powers and control over their own finances. After all, more than 90% of tax is collected by central government.
I was at the opening of the International Festival for Business in Liverpool yesterday, and a great showcase it was for both Britain and Liverpool. We had contributions that demonstrated real commitment to the creative sector from the Prime Minister, my noble friend the Trade Minister and the Culture Secretary. I was also delighted that my noble friend acknowledged the value of professional services, but it reminded me of the words of the noble Lord, Lord Heseltine, in the paper No Stone Unturned: In Pursuit of Growth, which he wrote in 2012 about cities and regeneration. He said:
“What Liverpool forced me to confront was the extent to which these conditioning qualities had been driven from municipal England. The dynamism that had built the city was gone”.
There is a major RSA project under way, the City Growth Commission, chaired by Jim O’Neill, which will report in October this year. As the commission says, too many of the UK’s urban areas outside London are failing to achieve their growth potential. How can we make our cities competitive in the global economy? How can we strengthen our clusters? How can we tie in our universities as incubators? It is vital that we build on initiatives such as the LEPs, city deals and the regional growth fund.
As the Lords Select Committee recently concluded, our creative industries are increasingly part of Britain’s soft power. They are a vital aspect of our international trade and investment. A few days ago I took part in the third Technology Innovators Forum—TIF-IN—in Qingdao, opened by the Secretary of State for Business, which reflects that with the growth of digital platforms and applications there is a symbiotic relationship between the tech sector and creative content, as well as the need to promote our UK creative industries in emerging markets, especially China.
At TIF-IN, my right honourable friend launched the Global Digital Media and Entertainment Alliance with China, which will promote long-term relationships in the digital media and entertainment sectors. I am optimistic that it will greatly benefit the UK’s creative industries. We have a terrific team of UKTI people in China, with increasing sector specialisms. They have done an excellent job post-Olympics in developing Britain through the GREAT campaign. The FCO is very supportive. We now have an expert IP attaché in Beijing and other major markets.
However, UK companies, particularly SMEs, need persuading to be bolder. We need to demonstrate the benefits of trade and investment with emerging markets more effectively, and we need a much longer pipeline of SMEs lining up to do business in emerging markets. That means more UKTI resource in the UK, especially in the English regions.
Finally, as I cannot take part in Thursday’s debate, I want to mention the tourism sector. In that context I very much welcome the announcement last week at the British Hospitality Association summit of the creation of a new tourism council along the lines of the successful model of the Creative Industries Council. I hope that this will lead rapidly to a range of measures that will ensure the competitiveness of our tourism industry compared to other European destinations. That is also a vital part of our soft power.
7.55 pm
Lord Hodgson of Astley Abbotts (Con): My Lords, one of the glories of these four days of debate on the Queen’s Speech is the wide-ranging nature of contributions from all sides of the House. I want to pick up one point made by the noble Baroness, Lady Sherlock, and supported by the noble Baronesses, Lady Drake and Lady Hollis, and the noble Lords, Lord Monks and Lord Morris: the question of zero-hours contracts. This is not a defence of zero-hours contracts. I think there are things that need to be done to make them better, but many noble Lords would be astonished by how popular they are. I was for a number of years until a couple of months ago a director of a major brewery and pub company—we had 2,500 pubs—and the demand for zero-hours contracts from students and men and women who wanted to be able to work evenings and weekends when they wanted to was very considerable. It would be a shame if we shut off that opportunity for people to better themselves economically by overregulating the sector. That would be a grave error and I hope that the Government will not allow the regulatory burden to become too great.
For my part, I want to congratulate the Government on the progress they have made. Unsurprisingly, the record has a blemish or two, but overwhelmingly the story has been one of steady progress in the face of a range of extremely intractable problems inherited in May 2010. My noble friend Lord Stoneham of Droxford made an excellent series of comments about that in his remarks earlier. Now in this final year we are going to continue that programme with hard graft. I would like to pick out two Bills that we are going to be looking at: the protection of charities Bill and the social action, responsibility and heroism Bill—the SARAH Bill. I have to say that I think the noble Baroness, Lady Hayter of Kentish Town, was less than generous in saying that the Government were not interested in the charities sector.
Noble Lords will know that I have done quite a lot of work for the Government on the charities and voluntary sector, and I have prepared a couple of reports. I share the view that charitable or voluntary effort is a very important part of the glue that underpins the cohesion of our society. The first of those reports, Unshackling Good Neighbours, revealed that many people are put off volunteering, whether as a trustee or as a
worker, by the perceived potential threat of legal action. This has been the result of some very well publicised legal judgments that appear entirely counterintuitive and some well publicised cases that in the event turn out to be myths. Whatever the reason, I am delighted that the Government have decided to put in statute that people have a responsibility for their own safety and that, so long as people seeking to help them behave responsibly, they will not be held liable by the courts if something goes wrong. I fear that this will not please the lawyers, who will argue that the case law and the precedents already established are entirely adequate. Further, lawyers find it extraordinarily difficult to accept that judges ever give counterintuitive judgments. But public perception on this issue is different, and in this case public perception is the critical factor. I hope that the Government will stick to their guns.
The second report I undertook was a review of the Charities Act. The charities sector does tremendous work but it has come in for a lot of criticism in recent years—the Cup Trust, executive salaries, aid going to fund extremism and so forth—so it is more important than ever that public trust and confidence in this sector are maintained. This requires vigorous action by the Charity Commission and, of course, appropriate action by the trustees of individual charities. My research found that the Charity Commission is underpowered in that regard, so I hope that the Bill will plug the gaps. I think that it is due here in the autumn. Once it is in place, I very much hope that the Charity Commission will not hesitate to use it in a proactive as well as a reactive way.
For the remaining few minutes of my remarks, I want to refer to an issue that I have raised several times in the past: that is, the future demographic shape of this country. Today, we are debating business, employment, pensions, welfare, agriculture and the environment. The policies in every one of these departments will be radically affected by the future absolute levels of population in this country. As is always the case, I need to start by making two things clear. This is not a debate about immigration or about the racial make-up of our country; I am not interested in those. My interest is in how future levels of population will affect every member of our settled population. Indeed, some strongly argue that it is the more recently arrived who will be the most affected. I continue to raise this because, of all the challenges that Governments face, demography has the longest lead times. A nudge on the demographic tiller has no immediate impact at all. Its effects are felt in 10, 20 or even 50 years. That is why it is so important that all Governments look to the future and decide what, if any, steps are necessary today.
The basic facts are these. The population of the United Kingdom increases every day by 1,150 people. That means that we are putting onto the map of Britain a large village or a small town every week for 52 weeks a year. Currently, 60% of those people are what is called the natural increase—the excess of births over deaths—and 40% from immigration. Should we mind that increase? Well, it is certainly going to have an extraordinarily dramatic impact on our country. We have heard a lot of speeches from noble Lords talking about housing. Currently, 2.4 people live in
every dwelling. I think it will be accepted around the House that it is our duty as a civilised society to house our fellow citizens properly. If we assume that the ratio persists—it has been falling gradually over the years—we need 480 houses every day. We need some immediately to deal with adult immigrants and some over a slightly longer period to look after children as they mature. Noble Lords can do the mathematics: 480 houses every day means 20 houses every hour, a house every three minutes, night and day. That is going to make an impact.
In fairness to other Members of your Lordships’ House waiting to speak, today is not the occasion to address the other complex aspects of the subject, such as the relative population densities—England has now overtaken the Netherlands as the most densely populated country in Europe—or the relative economic advantage of immigration. It seems likely that the richer you are, the more immigration benefits you; the poorer you are, the more immigration is to your disadvantage. It is, however, worth asking one final question: where might this all end? The Government Actuary’s Department and the Office for National Statistics suggest that by mid-century—40 years from now—our population will be just below 80 million, that is, about a third higher than it is today. The bulk of that increase is likely to come in London and the south-east. Using the yardstick of housebuilding that I used before, we shall need to provide another 3.6 million homes.
To conclude, I think that this is a fantastic country to live in. That is why people want to come to live here. They have the chance to learn English—the world’s lingua franca, especially in the world of technology. Of course, they come to take advantage of the economic opportunities that exist here. However, I think that they also come because of what the Greeks would call our demos: that extraordinary mixture of the rule of law, the absence of corruption, the ability to speak your mind, the ability to follow your faith, the extraordinary breadth and depth of our country’s environment and cultural heritage and, last but not least, the prevailing atmosphere of tolerance and good humour. At heart, what has given this country its social cohesion is a sense of fairness. The Government and all parties need to reflect on whether the demographic challenges, which are coming as surely as night follows day, will put at risk that sense of fairness, and so partially undermine what has made our country such a distinctive and attractive place to live.
8.05 pm
Lord Soley (Lab): My Lords, I shall focus my comments today on the environment. I know that the Minister who will respond will not deal with this issue, but I should be grateful if he would draw my comments, particularly what I am going to say about defence forces and biofuels, to the attention of the relevant Minister, the noble Lord, Lord Astor.
The Queen’s Speech is too thin on environmental issues. I welcome the policy on plastic bags; I do not think that it is a laughing matter—the noble Baroness, Lady Parminter, made the point well about the impact on wildlife. My noble friend Lady Sherlock made a very interesting point about the degradation of
biodegradable bags, where the plastic itself does not degrade. That brings me to the heart of what I want to say. We still do not do enough in this country to put science and technology in the driving seat on climate change. I have expressed concern about climate change since I first wrote about it in the early 1980s, but I have never believed that the way to deal with it is to try to stop people driving, flying or whatever. When the developing world looks at us, they ask us—forcefully at times—why, when we cut down all our forests several hundred years ago, we are lecturing them on reducing their forests now. That is a powerful point, although of course it does not alter the factual situation that we have to address.
Science and technology are also important because, at times, people forget that Britain has been at the forefront of some of the science on climate change precisely because we are an advanced scientific nation, and particularly the advances made by what is still the second largest, second most advanced aerospace industry in the world. That is how we know about climate change. If we did not have the measurements available from the science learnt from the aerospace industry, we would not know a fraction of what we do about climate change. It is crucial to have science and technology in the driving seat.
Although it is now a declining number who deny the dangers of climate change, I make two passing points. The first is that if you are warned of a danger of this type, it is foolish to do anything other than adopt the precautionary principle and address the issue. If it turns out not to be as fearful as you expect, the damage is relatively little; if you do not do anything, the damage could be very severe.
The second common-sense reason for wanting to do something about it is that, by and large, it is a bad idea to encourage production without doing so in a non-polluting way. Think of the dramatic expansion in the world’s population, who are all going to want to fly, drive and have a living standard comparable to that of the UK, the US and western Europe. We cannot do that without the application of science and technology.
That brings me to my point about the defence forces. I make no apology for asking the Minister to draw it to the attention of the noble Lord, Lord Astor, because I tabled a Question on this issue, which I shall refer to in a moment. I also hope to get a short debate on the issue. Let me give my examples in very bald form from the various scientific journals and the Governments concerned. Our allies in the Royal Australian Navy make it clear that it plans to make all its ships and aircraft biofuel-capable within six years. The United States Navy plans to launch what it calls a “biofuel-enabled Great Green Fleet”—a bit of a dramatic title that—by 2016, a couple of years away,
“complete with fighter jets, helicopters, destroyers, and other ships”,
It is not commonly known that many of the advanced fighter jets deployed by the United States in Afghanistan, and indeed many of their other aircraft, were using biofuels in the form of algae. A large part of the reason was not cost, because they are not cheap to
produce, but security. If you are having your fuel lines blown up as it is brought in through Pakistan and Afghanistan, it is easier to produce the fuel on site—and that is what they did. The Italian navy currently has a ship deployed off the Baltic states, partly as a result of the NATO response to Crimea, which is a biofuel ship. They are also planning to increase the use of biofuels through one of their major companies. The Dutch air force is also now flying Apache helicopters with a mixture of biofuels.
I give those four examples—I could give others from other countries—because I want to read out the Question for Written Answer that I put down in January this year to the Ministry of Defence. I asked,
“what is their policy on the use of biofuel by the Royal Navy, the Army and the Royal Air Force”.
“The Ministry of Defence … uses biofuels in road transport (petrol and diesel) where EU legislation obliges fuel manufacturers to include a percentage of biofuels in the fuel they produce. The use of biofuels in marine and aviation fuel is governed by the requirements and approvals of MOD equipment manufacturers. The MOD is encouraging these manufacturers to work towards adopting biofuels in the future”.—[Official Report, 16/1/14; col. WA 37.]
That is an awfully sad reply. I then turn to our Royal Navy’s Rear Admiral Neil Morisetti, the UK’s former climate and energy security adviser, who went to the United States a couple of years ago and came back recommending that the US and UK collaborate more closely on the development of strategic, high-performance biofuels.
These biofuels are not the ones that take up land use—that is, some of them are but the majority are designed to be renewable. One extremely important point that I have made to this House before is about algae, which can be produced in any type of water—salt water or dirty water—and is a very powerful additive. Why are we not doing anything and why is there nothing in the Queen’s Speech to put this science and technology drive right in the front seat? If you took out the green argument and just asked who would develop these fuels if we do not use them for our defence forces, they would be developed in the United States, Italy, Holland and other countries.
We are losing that high-tech bit which we won on when, through the aerospace industry, we spotted the dangers of climate change. People forget it now but quite a few years back when the ozone layer was being depleted by the use of chlorofluorocarbons, it was British science instruments based in the Antarctic which discovered that. The science and technology response to it means that the ozone layer is now recovering. Climate change is a problem of pollution, just as the depletion of the ozone layer was. We can solve it but it requires science and technology.
That is the message which I would like the Minister to take back to the noble Lord, Lord Astor, and alert him to the fact, if he is not already aware of it, that I am trying to get a debate on the Armed Forces. Frankly, I feel slightly ashamed at the nature of the Answer I got compared with what is being done in Australia, the United States, Holland, France, Italy and elsewhere. We are not doing very well, yet we have been at the forefront of the science and technology.
8.13 pm
The Earl of Selborne (Con): Like the noble Lord, Lord Soley, I would like to focus my remarks on the environment. The purpose of the Bill promised in the gracious Speech which will impose a charge of 5p for a single-use non-biodegradable plastic bag is presumably to do more than reduce the pollution caused by those ubiquitous bags. The Bill is a not very subtle nudge to make us change our behaviour and become more aware of how we can reduce adverse impacts on the environment, which will in turn damage our economy. I would welcome the Bill with more enthusiasm if I could be sure that the Government themselves were pursuing a coherent, overarching strategy to achieve what they said they would in the 2011 environment White Paper. As your Lordships will remember, that set out an agenda for this Parliament with the brave aim of being the first generation to improve our natural environment.
There are in fact a number of areas where in recent decades we have indeed improved our environment. Pollution control, which is the primary purpose of the charge on plastic bags, is in many ways something of a success story. We no longer have pea-soupers or a stinking Thames and, as my noble friend Lord Patten reminded us today, the otter has made a comeback in many of our rivers. However, as we increase our consumption, so we increase the danger of harmful impacts on ecosystems and ecosystem services. In the United Kingdom we have converted or modified most of our semi-natural vegetation to arable and grassland use. Major increases in fertiliser use, particularly nitrogen and phosphorous, adversely affect aquatic ecosystems through run-off. As my noble friend Lord Plumb reminded us, United Kingdom agriculture has also delivered a largely successful programme, initiated after the Second World War, to improve our food security, but the price has been increased leakages into soil, air and water.
Other sectors including energy, industry, housing and transport, some of which could also be described as success stories, have also had major impacts on ecosystems and the delivery of ecosystem services. Examples of such impacts are the deposition of atmospheric nitrogen and sulphur, the loss of habitats through construction and disruption of flood regimes in river basins and coastal wetlands. We take ecosystem services too often for granted yet we depend on them to produce our food, to regulate water supplies and climate, to break down waste products and much else. Nutrient cycling, the purification of air, soils and water, groundwater recharge and flood control are all critical to our economy and our well-being, yet these services are consistently undervalued in economic terms. If we want reminding of just how damaging extreme events can be, think of the impact of what happened in Thailand in 2011, when in one year flooding reduced its GDP by 11%.
The Natural Capital Committee was set up to advise the Government on how to deliver the aspirations of the 2011 environment White Paper. We had signed up at the Earth Summit in 1992, and subsequently elsewhere, to heroic targets—for example, on protecting our biodiversity—but had, frankly, no prospect of achieving
those targets and no coherent policy either. The committee has now produced two helpful reports, the second in March this year, and its message to the Government is that we must plan long-term, by which it means at least 25 years. The second report states that integrating the environment into the economy is hampered by the almost complete absence of proper accounting for natural assets—what is not measured is usually ignored. The committee is leading in developing metrics and risk registers, identifying the necessary capital maintenance and ensuring that project and investment appraisals in both the public and private sectors properly take natural capital into account.
I wish the committee every success, but it has to change the way that investment decisions have been made for generations. Take, for example, the proposed Thames Water tideway scheme, which has been contemplated since the 1990s and which is to resolve the problem of contamination of the Thames tideway from sewerage overflows by a new tunnel that will cost £4.2 billion at 2011 prices. The driver for this is the urban waste water directive from the European Union and the threat of some highly expensive infraction proceedings. Yet this project, so long in gestation, does nothing to promote water recycling, flood alleviation, green infrastructure or sustainable urban drainage systems. It is, frankly, the Victorian solution of Bazalgette repeated, and it puts the problem firmly into the hands of one organisation, Thames Tideway Tunnel Ltd, and the cost on those in the Thames Water catchment, whether near the tideway or miles away in Gloucestershire, Berkshire or wherever. It is probably too late to stop this scheme but I am sure that it would never be started now, when we are learning at last how to value our natural capital.
By the end of this Parliament in March next year, we should be able to judge whether the committee’s advice to the Government on the need for long-term planning has been accepted. If we are to make biodiversity offsetting work, one of the more innovative proposals that have been considered by Defra and put out to consultation, it can be done only with the help of a detailed national long-term plan. By definition you will never be able to offset ancient woodland, for example, but you might be able to offset other habitats—meadows, perhaps, or wetlands.
When Sir John Lawton produced his 2010 report Making Space for Nature, he attributed the continuing decline of many species to the size of protected sites, which tend to be too small to prevent random fluctuations driving local populations to extinction. His solution was to create more, bigger, better managed and joined-up sites in a landscape-level approach to wildlife conservation. Such an approach would be possible only by involving partnerships working together on well designed schemes, funded appropriately by agri-environmental and woodland grant schemes.
Such schemes must be underpinned by sound ecological research and supported by good-quality data, with their effectiveness measured by a suitable monitoring system. Realistically, funding on this scale can come only from a reformed common agricultural policy that allows national Governments to allocate maximum resources to environmental programmes. That brings
us back to the need to achieve greater subsidiarity and for the Prime Minister to be supported in this essential endeavour.
8.21 pm
Viscount Hanworth (Lab): My Lords, this year the Speech from the Throne has been a very dull affair; it is distinguished more by its omissions than by its inclusions. It has failed to address the urgent problems that have arisen from the previous enactments of the Government. The programme of privatisation and deregulation, which has been accompanied by the disengagement of the state from all manner of social services and provisions, has surely run its course.
The programme has led to the neglect of some severe social problems, one of the most prominent examples of which is in connection with the provision of social housing. Several speakers in a previous debate mentioned the role of Harold Macmillan at the Ministry of Local Government and Planning in Churchill’s Government of 1951 in providing affordable social housing Macmillan was given the task of overseeing the building of 300,000 houses per year. This was an objective that had been mandated by the Conservative Party conference of 1950, and it was amply fulfilled. The policy of housebuilding depended on close co-operation between central and local government. Local government was empowered to finance homebuilding by issuing bonds and was given substantial subventions from the Treasury. The percentage of people renting from local authorities rose to over one-quarter of the population, from 10% in 1938 to 26% in 1961.
In the era of Margaret Thatcher there was a complete reversal of the housing policies of the Conservatives. The Housing Act 1980 gave a right to buy to council tenants, and within 10 years 1 million council houses were sold. Thereafter the building of houses by local authorities virtually ceased, and none has been built since the early 1990s.
The present Government have taken further steps to prevent local authorities from embarking on housebuilding programmes. The Localism Act 2011 transferred roughly £21 billion of housing debt to the 171 local authorities that currently own houses, in return for fuller control over their housing stock. At the same time the Government introduced a debt cap on each local authority, which restricts the amount of money that they will be able to borrow in connection with their housing stock.
In effect, the Government have divested themselves of any responsibility for publicly owned housing and have allowed local authorities only enough money to cover the cost of its maintenance. This is an encouragement to the authorities also to divest themselves of any ownership of housing, and many have already done so.
Nowadays, the Conservatives appear to believe, in line with a free-market philosophy, that the provision of housing should be wholly a matter for the private sector. However, in recent years housebuilding by the private sector has all but collapsed. Against all evidence, the belief has been fostered that the failure of the private sector is due to its having become mired in red
tape and planning restrictions. Accordingly, the Growth and Infrastructure Bill of the previous Session established a new national planning framework which replaced 44 planning documents by a slim document of 50 pages. In the process, a set of documents that had been providing careful planning guidance in many specific circumstances, and which had been developed and refined over the previous 25 years, has been tossed into the rubbish bin. This act of vandalism represents a remarkable triumph of ideology over analysis.
At the same time as we have seen a collapse of housebuilding, we have seen a boom in house prices and a remarkable escalation in the rents charged by private sector landlords. The unaffordability of house ownership and the exorbitant costs of rented property are immiserating a generation of young people. A symptom of their distress is the escalating size of the housing benefit paid to those who cannot otherwise afford any accommodation. The cost of housing benefit in the financial year 2013-14 was £23.8 billion, which was almost 30% of the entire welfare bill. This dwarfs the £1.5 billion that has been spent on capital investment in social housing.
At the same time as they have been subsidising the incomes of private landlords via the housing benefit, the Government have been stoking the rise in house prices by their Help to Buy scheme. This has offered assistance to those who are already rich enough to think of purchasing a house. One can think of few policies that could be more socially divisive.
The house price inflation has led to a massive transfer of wealth in favour of the richer members of an older generation, who are well established in their properties. An obvious recourse would be to tax some of their wealth in residential property. Then, the proceeds could be used for building social housing to be provided at affordable rents. If the houses were built in sufficient numbers, then some of them might be for sale. It has been said, in opposition to such a wealth tax, that it would be unfair to those who are rich in assets but poor in income. The objections seem to deny the close correlation between income and wealth. However, the escalation of house prices could be very effectively staunched by a tax imposed on the sellers of properties. This could be assessed on the basis of their capital gains derived from the increased value of their houses. There would be no disadvantage to asset-rich and elderly people who choose to linger in spacious and valuable properties. The proceeds of such a tax would be used predominantly for the purpose of financing the building of social housing in the areas from which they have been derived. To the extent that rising house prices are a reflection of the scarcity of housing, the revenue would be reinvested where the need is greatest.
The costs of investment in social capital, whether they are met through taxation or by the issue of bonds, should not be reckoned as part of the central government’s current account. Such costs should be deemed to have no bearing on the Government’s financial deficit. Nevertheless, the present Government profess that, in a time of financial stringency, they cannot afford to meet the costs of major investments in social capital. This is surely a spurious excuse with which they are hoping to conceal their wilful neglect.
8.28 pm
Lord Smith of Clifton (LD): My Lords, it is a pleasure to follow my erstwhile academic colleague the noble Viscount. I want to concentrate on consumer affairs, which were an aspect of the speech by the noble Baroness, Lady Hayter.
Some 30 years ago, the late Lord Grimond of Firth gave a lecture at City University on changes then taking place in commerce with the introduction of computerisation into retailing. He was passing a branch of an insurance company in which he had a small life policy he was thinking of cashing in. He entered and inquired of the assistant whether he could be sent an updated valuation if it was paid up. She asked him to wait a minute while she did the calculation on the computer. This upset him. He wanted the details to arrive in the post some days later. Having the valuation there and then was not part of the consideration he was making. He hoped to turn it over in his mind before coming to a decision and was disoriented by being stampeded with the immediacy of the information provided. It short-circuited the process and usurped the opportunity to ponder his course of action.
Those of a certain advanced age will sympathise with Jo Grimond’s discomfort at having to amend his previous biorhythms. Computerisation has brought benefits, as my noble friend Lord Clement-Jones said, but it has also brought disadvantages to the consumer, and these are what I want to bring to your Lordships’ attention.
IT can be and is being used to the public’s disadvantage, as I know from two recent experiences of my own. The first case concerns HMRC. The Daily Mail, Sunday Times, Observer, Financial Times and other newspapers have drawn attention to Her Majesty’s Treasury’s intention to give HMRC powers to have direct access to private current accounts of those deemed to be defaulting on their tax liabilities. I believe very firmly that tax dodgers should be pursued and made to pay up. However, from my own recent experience, I do not believe HMRC is functioning adequately to be allowed direct access to personal bank accounts at this stage.
Although, as a pensioner, my tax position is fairly simple, I nevertheless always get a firm of chartered accountants to prepare and file my tax returns to ensure their accuracy. They, in turn, advise me of any shortfall, which I then pay to HMRC. For the year 2012-13 they told me that I should pay £992.62, which I promptly did, well before the deadline set.
I was surprised, therefore, to receive a demand for the same amount from HMRC. I checked my documents—my cheque stub and my bank statement—which clearly showed money had left my account. I telephoned HMRC’s Leeds office. After waiting 40 minutes my call was answered. I had all my documentation to hand so I could provide the necessary information. After much trouble at the other end, it was discovered that my cheque had in fact been paid into the Cardiff HMRC collection office, which is where I had usually sent it. I asked why HMRC did not have a computer system that linked up its various branches automatically as a matter of course. I received no answer. I asked for a written confirmation that the money had been paid, and was told that it was not HMRC practice to issue
receipts as it would not be necessary now that the situation had been cleared up—ha ha.
The next week I received another demand for the same amount, plus a £49 penalty for late payment, with threats that debt collectors would call if I did not pay. I received similar demands for the next four weeks. HMRC has no control over its computer system, which dementedly and endlessly sends out demands for weeks on end. This was to someone classified in the official jargon as a “frail, old” pensioner who had always been assiduous in paying his tax well before the deadline. I was innocent, receiving neither an apology nor a receipt which I could have shown the bailiffs while being harassed by this out-of-control computer juggernaut.
I wrote to the chief executive of HMRC on 8 March last, complaining of the treatment I was receiving. I wrote again on 20 March, complaining I had received yet another tax demand. My original letter of 8 March was acknowledged on 14 March, promising I would receive a reply by 3 April. Hardly surprisingly, HMRC failed to meet its own self-imposed deadline. I emailed the HQ reminding it, and received a reply dated 10 April which sought to explain what had happened and apologised, but it accepted that its telephone contact system did not meet industry standards.
As a member of your Lordships’ Economic Affairs Select Committee, I saw the HMRC’s inadequacy in chasing up large corporations who pursue aggressive tax avoidance schemes. The committee reported that HMRC had a lack of resources to do this. Yet HMRC seems to have enough spare capacity to aggressively harass innocent OAPs like me. The proposed new powers, apparently, would enable HMRC computers to hack into my current account, transferring £992.62 for weeks on end. Until and unless HMRC can guarantee this could not happen these new powers should not be approved.
My second example concerns British Telecom. My home landline was out of service for 10 days from 23 November last. I received my usual quarterly payment request, but no deduction had been made for this contractual failure by BT. I phoned to ask why, only to be told that no refunds were made unless requested by the subscriber. BT has the records on computer and deductions should be made automatically, in my view. To add insult to injury, I was told I was entitled to a rebate of a paltry £3.17. When I queried this, I was referred to an account manager, who restated BT policy without any attempt to explain let alone justify that policy, which is tantamount to attempted theft. He wrote a template reiteration:
“I am sorry you are unhappy with this condition of service, however this is the case ... This means we have reached deadlock”.
He suggested that I take my complaint to the communications ombudsman, which I did on 20 May. I received no acknowledgement, despite two requests from me, until Sunday 1 June—at least they work out of hours. The reply requested nine items of information, almost all of which were contained in my original letter, and the rest could have been obtained from the computerised records of BT. In addition, it was suggested that I should take my complaint to Ofcom.
I responded immediately, saying that it was the ombudsman's job to utilise the information conveyed in my letter—why should I have to repeat it? I also asked why BT had suggested in the first place that I make contact with the ombudsman, which, for its part, thought I should go to Ofcom with my complaint. None of this adds up. I have yet to receive a reply from the ombudsman. Like almost all regulators it leaves very much to be desired in the service it provides.
I am being pushed from pillar to post by these agencies. Clearly, there is a conspiracy of attrition which hopes that procrastination will dissuade complainants: is it worth it for £3.17? Yes, it is. How many thousands of £3.17s are there? Unclaimed amounts get transferred across to profits at the end of the year, swelling the remuneration packages of BT senior management. It is tantamount, as I said, to theft.
It is quite clear from these two examples that the failure to utilise computers to facilitate customer-friendly services should be exposed for what it is: an attempt to obfuscate, prevaricate and procrastinate in the hope that complainants will give up through sheer exhaustion. This must stop forthwith, and Her Majesty’s Government should address this issue.
8.36 pm
Lord Swinfen (Con): My Lords, I hope that the Minister will send a copy of today’s Hansard to HM Revenue and Customs and point out my noble friend’s speech, which HMRC should read, mark, learn and inwardly digest.
I live in an arable farming area in the south-east of England, and my remarks will be based on that. I recall, back in 1962, being given by my mother a copy of Rachel Carson’s Silent Spring, a book on the evil effects of pesticides. I also recall, some years later, the problems when DDT was used in subtropical parts of the world to deal with the Anopheles mosquito in an attempt to prevent the spread of malaria. They did not succeed in doing that but instead polluted the land, because DDT is a pollutant. I suspect that in some of those areas the land is still polluted, because they probably did not have the wherewithal to clear it up. I understand that DDT has since been banned.
I am surrounded by arable land. A few years ago, a large field with a young crop of rape was liberally spread with slug pellets. I do not know how many pellets there were to the square yard, as I did not count them, but if you had put down an outstretched hand, there would have been a lot of them underneath. Hedgehogs died, because they eat slugs. We have not had any hedgehogs since. I know that there has also been a disease, but their deaths may have been caused by the pesticide that was intended to deal with the slugs.
We used to have swallows at home, in large numbers, some of which nested in an outbuilding. I cannot blame my neighbour who owns the land because for many years an agricultural contractor has done the work on it—under contract, I believe—and I suspect that it does not matter to the contractor what state the land is in when his contract comes to an end. The swallows died. We had one swallow last year. I found it lying on its back on the ground. We have had no more
since. That is a terrible waste, and it will take years for swallows to return because they normally nest in the same area each year. It will also mean that the farming practices around us will have to change so that they have the flies to feed on.
There are no larks, no starlings, apart from one or two, as opposed to the large flocks that we used to have. In the agricultural fields around us there are no sparrows; there are hardly any birds at all. There is not the food for them. There are no butterflies. Walking the dogs I did come across some bees. They were on the track and they were dying because of the insecticides used on the crops.
What I am saying about the area in which I live is probably happening in other parts of arable farming in this country. I know that we need to produce as much food as we can as cheaply as we can, but is it worth losing our wild flowers and our normal insects? In the summer I used to be bothered by flies; there are not any flies to bother me any more. There are not any bees and not many wasps.
Last year there was some rain while the harvest was taking place near me. They had to keep the men employed and the machinery operating, so they trimmed the hedges. They trimmed off all the berries that the birds, if there were any, would have eaten during the winter. There was no food for the birds over the winter.
While I have been there, which is over 40 years, the land has had only chemicals and no dung put on it. The land is no longer ploughed but is cultivated, and not to the old eight inches deep as with ploughing. In days long gone past, dung would have been ploughed into the soil, which helped with the drainage of rain from the soil while at the same time retaining a supply of moisture in the soil for the plants to grow.
Of late, even the straw which used to be chopped up and ploughed in—or rather cultivated in, because it is only the top two or three inches that is cultivated nowadays—is being carted away, I suspect down to the West Country where it is being used for animal bedding, or possibly animal feed, and not put into the soil. No humus is going back into the soil at all. I wonder what is happening to the condition of the soil. Vegetable soil takes 1,000 years to form; it can be destroyed in the matter of a few years.
I do not blame the owners of the land. Their farming is all done under contract, with the contractor—I do not know who it is; I do not want to know who it is—quite obviously wanting to make as much money as they can out of the land as quickly as possible, and then abandon the land and go on elsewhere.
The noble Earl, Lord Selborne, mentioned nitrogen on the soil. It is one of the few things that are put on. The run-off produces the most terrific weed growth in the local watercourses, blocking the watercourses, and then has to be removed at considerable expense. I wonder to what extent that caused the flooding on the Somerset levels. I do not know; I am not an expert. It is only a question in my mind.
I have another question. I am not a farmer and know nothing about the common agricultural policy, but I wonder if part of this is a result of the common
agricultural policy, and whether we ought to have a very good look at what we are doing to the soil in the agricultural areas of our country to make certain that it is useful and in good condition for years and generations to come.
8.45 pm
Baroness Turner of Camden (Lab): My Lords, it is surprising that there is so little in the gracious Speech about employment law. During the lifetime of this Government, the employment protections which many of us have fought for for years have almost disappeared. It has now become almost impossible for a dismissed worker to sue for unfair dismissal at a tribunal. The proceedings are not only very complicated but very expensive; it can cost an employee about £1,000 to get a hearing. Accidents at work continue to happen far too frequently, particularly in the construction industry, but again suing has been made more difficult for the employee or his family. The Government have made it clear what they think about employment rights with their absurd scheme whereby employees abandon all employment rights in exchange for shares in the employing company. A number of us in your Lordships’ House opposed these measures when they were proposed here, but, unfortunately, without success.
We are told that the employment situation has improved, particularly in London and the south-east, but not I think for younger people. The same goes for older people, too. I have received letters from time to time from people over 50 years of age who have been made redundant. They desperately want to work again, but receive no replies to their job applications. This is particularly true for older women, as has already been pointed out. In other parts of the country, the situation is much worse. In the Midlands and the north there are areas where once the manufacturing industry provided work for whole communities, but the factories no longer exist to do so.
Clearly, there should be area renewal plans for such areas. Perhaps the Government will tell us what they have in mind, if anything, for these areas. But even where jobs exist, as in the London area, problems exist for poorer families. I am glad that the Government have agreed that the minimum wage must be increased and enforced. There is also more pressure for the living wage, which my party supports. Living costs in London have become impossibly expensive. There is a desperate shortage of affordable housing, as we have heard from other noble Lords, and in the mean time, despite the right to buy which has assisted some people, many poorer people are confined to rented accommodation in the private sector. There is a case for some intervention here. There is a need for more social housing to be built, as a number of noble Lords have said. This has been proposed by the London mayor, but it takes time, even if what he proposes is enough. This is a crisis, and there is therefore a reason to impose restrictions on the amount that may be charged for private rentals. I know of course that the Government are anxious to reduce the amount spent on welfare, but this becomes impossible if wages are too low and rents too high. This is currently the situation in London.
I have briefly set out the situation as I see it in London and the south-east, but there is another aspect which receives far less attention than perhaps it should. There is a lot of talk nowadays about the growing inequalities in our society. Many of us deplore this and wish that we could do something about it. Encouragement is given to community and voluntary organisations, and it is right that that should be done, but the largest voluntary organisations in this country are those built by the workers themselves. I refer, of course, to the trades unions. A recent survey indicated that one reason for the growth in inequality was a decline in union power. If that is so, I deplore it. But the Government certainly either ignore unions entirely or introduce legislation to make their functioning more difficult. This is a mistake. Unions have as their main function representing their members’ best interests, but they provide a range of other benefits to individual members as well, such as legal services to individuals in a situation in which legislation through LASPO has reduced access to legal aid for a whole range of issues, including employment and welfare.
Training and education are also areas where unions have been able to help members who have missed out in this respect earlier in their careers. The TUC’s Unionlearn has been widely praised for the training it provides. Many parliamentarians owe their education to union scholarships undertaken at Ruskin College, Oxford. I benefited from that provision through my union. Unions are increasingly becoming involved in community work and simply do not deserve the demonisation that occurs too often in the media, and the Government should simply ignore it.
The noble Lord, Lord Bamford, in a very good maiden speech, referred to the successful economy and high productivity in Germany. One of the reasons for that is the involvement of the unions in consultation, an issue with which we should be concerned in this country.
As has already been indicated, the proposals on pensions are extremely complicated. I was very interested to hear what my noble friend Lord Monks had to say about this, with which I agree. Retired people want a regular, reliable income that they can count on, perhaps linked to increases in wages. I am not certain that the proposals in the Bill will provide this.
As regards welfare, there appear to be difficulties in implementing the universal credit measures. The changes are already causing concern, particularly among disabled people. Again, this is something to which we must return when the House is ready to discuss the welfare problems that we all know exist. They would certainly benefit from further discussion by your Lordships.
8.52 pm
Lord Bourne of Aberystwyth (Con): My Lords, it is a great pleasure to follow the noble Baroness, Lady Turner of Camden, who speaks with such knowledge and authority. This has been a very interesting debate in which we have benefited from two outstandingly cogent and engaging maiden speeches from my noble friend Lord Bamford and the right reverend Prelate the Bishop of Durham.
A point made by many noble Lords on the Benches opposite relates to the content of the Queen’s Speech and the suggestion that it is light. I do not think that is the case. I have done some research through the internet on previous Queen’s Speeches. It is interesting that search engines reveal that in relation to previous gracious Speeches the person most mentioned after Her Majesty is Dennis Skinner. That throws up the interesting possibility of him being an important part of the constitution. Perhaps we have missed a trick in the gracious Speech in not seeking to privatise him.
In the last two years of the previous Labour Government 26 Bills were proposed, whereas in the last two years of this Government there have been 28. We should not just measure the number of Bills but also examine their content. However, the suggestion that this is the fag end of the coalition Government is not borne out by the important content of the Bills in the latest Queen’s Speech. I refer, for example, to the measures on pensions, which were referred to most recently by the noble Baroness, Lady Turner of Camden. Under the new proposals people will not be obliged to take a lump sum and the annuity option will still be available. We should rejoice in the fact that pensions will be freed up so that people will be able to take a lump sum if they want to do so. I agree that it is important that there should be access to impartial, independent advice. However, given the provision of such advice, this is a radical, bold move which will help pensioners across the board. If they have that independent advice, they can make up their minds about what is most appropriate for them.
Also, the pooling of funds as is done in Denmark and the Netherlands is again welcome. The noble Baroness, Lady Sherlock, referred to the fact that she welcomed that. If we look at this and study it, it will again help pensioners in years to come. It is important and to be welcomed. It is a meaty part of the gracious Speech.
I turn next to another important part, relating to small businesses. In many contributions from all round the House, noble Lords talked about business as if somehow all businesses are the same. Indeed, there have been suggestions that people disapprove of business. That may be true in terms of polling but I suspect that where that is the case they looked much more at large FTSE companies than at small businesses—the small print shop at the corner of the street, or the small two or one-person business that has become incorporated, the sole trader. These are vital for the running of our economy.
I welcome some of the measures heralded in the gracious Speech. On providing fair access to public procurement contracts, as the Minister said, £230 billion is spent on those contracts. To ensure that small businesses have a share of that is right and important not just for those small businesses but for the entire country, which will benefit from the prosperity that that will generate.
I also welcome the provision looking at red tape. I know that routinely Governments always do this. I hope the Government are serious about this because it is important. Look at the way we treat businesses, for example in the Companies Act 2006. This is not a
political point: the Act was passed under the last Government but largely with all-party approval. It is the largest measure ever passed by the Westminster Parliament, with 1,300 Sections and 16 Schedules. It applies, by and large if not entirely, as much to the small incorporated business with perhaps one shareholder as it does to FTSE companies. That is nonsense. Admittedly there are exceptions, but we need much more to drill down and ensure that we do not tie up in red tape our small businesses—which should be in the business of business: earning income and providing employment for people. It is more appropriate for larger companies, perhaps, but even there we need to be careful. That Companies Act is also without reference to the insolvency legislation, European directives, the Enterprise Act, financial services legislation and so on. I am not suggesting that we throw out health and safety legislation. That is vital. Good work has been done on that by successive Governments. However, we need to see how we treat small businesses with a lighter touch on some of the regulatory provisions relating to meetings, accounts and so on. That is imperative. In so far as the Queen’s Speech heralds that, I very much welcome it.