Other provisions in the Queen’s Speech I will mention just briefly. The assistance for public house tenants is to be welcomed as malpractices happen. I welcome the fact that we are to have a statutory code and an adjudicator. That is important.

I welcome, too, the provision on carrier bags. In Wales, I voted in favour of this—I am sure my noble friend Lord German did, too—in Cardiff when it went through. Wales was the first part of the United Kingdom to have this legislation and it went through with all-party approval. Again, it makes sense environmentally and from an economic point of view. It is much to be welcomed and is not just applicable within the United Kingdom and parts of Europe. It has been tried and tested and is working in parts of Africa such as Botswana and parts of Asia such as Hong Kong—in slightly different ways, admittedly. There is much we could learn from that, too.

I also mention briefly the carryover Bill—the Wales Bill. I declare my interest as a member of the Silk commission that did a lot of the work now contained in that Bill. This is an important piece of legislation that will contribute to the economy. It provides for a measure of taxation for the National Assembly for Wales in terms of landfill, stamp duty land tax, income tax subject to a referendum, and a measure of borrowing. No doubt we will have to revisit some of that after the Scottish referendum in terms of the way it works across the United Kingdom, but that is an important piece of legislation, too.

In short, there is much in this gracious Speech to welcome. I am sure we all have our pet schemes and would like the Government to have done some other things. For example, I am interested in the promotion of STEM education—something we need to be doing—and the protection of older people. There are many things, but I have sat through most of the debate and I have noticed that there is not much that people have disagreed with. The speech has been criticised for not containing things, rather than for what it contains. With that, I welcome the gracious Speech.

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9 pm

Lord Young of Norwood Green (Lab): My Lords, at this time of day, following a long, wide-ranging and absorbing debate, most of the points have been extensively and superbly addressed. I offer my apologies for the inevitable reiteration.

There have been two great maiden speeches. The noble Lord, Lord Bamford, as another ex-engineering apprentice, ensures that JCB puts its money where its corporate mouth is: into training, apprenticeships and vocational education, investing in today’s and tomorrow’s engineers. Earlier this year, I had the good fortune to visit the JCB Academy, which is now a university technical college. It is a superb college, with a balanced approach to vocational education that enthuses and inspires young people. I also echo the praise of other Peers for the speech of the right reverend Prelate the Bishop of Durham, especially his concern for young people and their expectations of a career or job. He highlighted the need to meet those expectations. As a country, we cannot afford another lost generation of young people who despair of finding a worthwhile job.

I want to focus on two areas: justice for workers in employment and, unsurprisingly, apprenticeships. Before I do, I want to make a plea. In any future debates on pensions, I ask that we stop advertising Lamborghinis when we have a whole range of high-quality British cars, such as Jaguar Land Rover and Aston Martin. I do not know who got the contract to advertise Lamborghinis, but they are doing well.

I was dismayed when I heard the Minister talk about ensuring further reductions in the number of employment tribunals as reducing the burden on business. As my noble friend Lady Drake informed the House, in the past year we have experienced a 79% reduction in employment tribunals since fees were introduced. For many ordinary workers, unless they belonged to a trade union—as my noble friend Lady Turner reminded us—the upfront costs of seeking redress from an employer who had treated them unfairly meant that justice was denied. I do not want to see unnecessary tribunals and I hope that mediation will be successful, but employment tribunals are not just red tape or a burden. They are a necessary means of defending hard-won workers’ rights and ensuring that employers meet legal requirements, whether they are the minimum wage or zero-hours contracts. We know that far too many employers are willing to deny their employees basic rights. My noble friend Lady Donaghy highlighted the problems of casual employment, which is especially evident in the construction industry, where still too many workers are often falsely described as self-employed. Of course I welcome the proposals to enforce a minimum wage—that is long overdue—but I am far from convinced that the Government will take meaningful action on those employers who exploit zero-hours contracts.

I turn now to apprenticeships. In other debates I have been accused of being churlish towards the Government’s proposals for the expansion of apprenticeships, but at least I recognise their commitment and some achievement. That is more than I can say of the noble Baroness, Lady Kramer, in her description of the previous Labour Government. I can accept, in

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the cut and thrust of debate, a bit of rhetorical hyperbole, but there are limits. I quote from her speech last Thursday. She said that,

“as I go up and down the country and talk to young people who are now just getting into employment, they came through education during the Labour years when they did not get the skills they needed, when there were no apprenticeships” .—[

Official Report

, 5/6/14; col. 112.]

No apprenticeships? Let me just remind noble Lords, as my noble friend Lord Macdonald of Tradeston did, that when we inherited an almost moribund apprenticeship scheme, we had only 65,000 apprenticeships left and an abysmal completion rate of about 37%. When we left we had 280,000 apprenticeships with a 71% completion rate. It was not good enough and there was much more work to be done, but I hardly think it deserves to be characterised as “no apprenticeships”. We left a firm foundation, which is usually acknowledged by this Government.

A number of Peers have warned of the Government’s desire to quote the large figure of 2 million apprentices. My noble friend Lord Bhattacharyya warned that most of these were adults over the age of 25 and already in employment, and the Richard review recommended that they should not be described as apprentices. Their work may involve essential reskilling and retraining but, in my view, those are not the areas on which we should focus. We need to focus on quality and on two groups—16 to 18 year-olds, where we have seen a decline, and 19 to 24 year-olds. Both are vital age ranges. The Government’s latest proposals on funding apprenticeships are causing concern among employers. The noble Lord, Lord Aberdare, warned us that they may cause some small employers to regard apprenticeships as a financial risk. If we are serious about expanding apprenticeships, we must ensure that the dismal figure of only 8% of all employers and only a third of FTSE 100 companies taking on apprentices is massively expanded.

As I have said on many occasions, the Government should lead by example. I look to the Minister to tell us in his reply why they do not make it a mandatory requirement for public procurement contracts to require apprenticeships. We did it with both the Olympics and Crossrail. We also need to expand group training associations and apprenticeship training associations. All local authorities and local enterprise partnerships should be developing apprenticeships as part of an industrial strategy. Let us not argue about where we need apprenticeships. That is obvious—in engineering, IT, construction, healthcare and the creative arts. In most cases, demand exceeds supply. It is perhaps appropriate that the noble Lord, Lord Livingston, is here because I always quote BT, where something like 25,000 applications go chasing 400 apprenticeships. It is tougher to get into BT than it is to get into Oxford or Cambridge, and I reflect on that as a former GPO apprentice.

As the noble Lord, Lord Aberdare, reminded us, schools have a vital role to play in giving comprehensive career advice. However, in many cases they fail to do so, focusing on directing all their students towards A-levels. I go into many schools and when I ask the 16 to 18 year-olds whether they have heard of apprenticeships,

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they look at me in amazement as though it is something they are totally unaware of. What should we do about that? The noble Lord, Lord Aberdare, suggested that, in its inspections, Ofsted should look at the quality of careers advice. I would welcome the Minister’s comments on that.

Under current legislation, schools have a legal duty to give a comprehensive range of careers advice, but most of them are still failing to do so. We need to continue to upgrade the status of apprenticeships. We need to emulate the companies which ensure that there is a proper graduation ceremony when apprentices finish an apprenticeship scheme. We need to ensure that apprentices go back into schools and tell young people—especially young women—what good career opportunities present themselves in apprenticeships.

In my view, combating the scourge of youth unemployment is our biggest challenge. If we are serious about creating a fairer society—and I think that that is an aim that all of us in this Chamber share—then it is a challenge that we cannot fail to meet.

9.08 pm

Viscount Ridley (Con): My Lords, it is a pleasure to follow the noble Lord, Lord Young of Norwood Green, and what he says on apprenticeships is much appreciated. I should like to focus my remarks chiefly on the small business, enterprise and employment Bill, but I shall also touch on agriculture and the environment. In doing so, I declare my relevant interests as listed in the register, particularly on the subject of agriculture.

I begin by congratulating my noble friend Lord Livingston not only on his remarks about business in opening this debate but on what he said in Liverpool yesterday. If the press is to be believed, he said that this is,

“a creative country, a modern country, an innovative country, a country led by design”.

I welcome those remarks. He was of course talking about the revival of the economy of the north-west of England, but I hope that he will not mind if I also draw his attention to the remarkable transformation that we are beginning to see in the economy of the north-east of England. That is something that the right reverend Prelate the Bishop of Durham touched on in his excellent maiden speech, on which I congratulate him. There are more people at work in the north-east LEP area than ever before. We have seen the equivalent of six new Nissan plants in the north-east in the past 12 months. These are good jobs in software and offshore in engineering and technology. Overall, productivity in the north-east is up by 14% between 2009 and 2012, which is three times as great an increase in productivity as in the country as a whole. While mentioning productivity, I also want to congratulate the noble Lord, Lord Bamford, on his excellent maiden speech.

Turning to the UK as a whole, I probably do not need to tell my noble friend the Minister about the vital importance of innovation. That is the theme I particularly want to talk about. Two-thirds of UK growth between 1997 and 2007 was due to innovation according to NESTA—the National Endowment for Science, Technology and the Arts. There is no way that we can grow out of the debt burden that still hangs

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over our economy without huge amounts of innovation. We are on the brink of several innovative revolutions in technology: in personalised medicine, on which we stand a good chance of being in the forefront; in 3D printing; in self-driven vehicles; in self limiting crypto-currencies, I read in some newspapers; and in collaborative consumption, where we can each use our spare rooms to become hoteliers and our used cars to become car rental companies. The other exciting thing that is happening all over the world is peer-to-peer networks—which we are very good at in this place, obviously, but I think it means something else. I looked up some numbers and discovered that, if you bought a pair of jeans in 1982 and were on the average wage, it took an hour and 50 minutes of work to earn the price of those jeans. Today it costs 41 minutes for an equivalent pair of jeans. That is what innovation delivers. It delivers a shrinkage in the amount of time that people have to work to fulfil their needs. That, of course, enables them to fulfil more needs and provide more people with jobs.

On the subject of innovation, it is worth pointing out just how crucial the “D” rather than the “R” is in R&D. We are very good at research in this country. We have the second most Nobel Prizes in the world, but we are not so good at development. We are not so good at turning those discoveries into innovation. The perspiration that goes into starting a business and commercialising an innovation is as important, if not more so, than the inspiration that goes into the discovery. I welcome the Government’s initiatives over the past few years, such as the patent box, in particular.

However, I also want to make a specific suggestion that I hope my noble friend will be able to look at, which is to look at various options for improving incentives for entrepreneurs. We are at the moment very generous to venture capital investors in start-up businesses through the EIS and the VCT scheme. By the way, we have to be generous to investors—otherwise in this country we would spend all our money on housing—but we are not quite so generous to entrepreneurs. If someone wants entrepreneur’s relief, he has to apply for it after he has sold his business and there is not a great deal of certainty about that. On the whole, the person sitting across the table from the venture capital investor is not getting such a good deal, or certainly such a certain deal, as the investor himself. In passing, let me say that it is important to resist the temptation to put the threshold for entrepreneur’s relief up to about 25%, as has been suggested, because it is the entrepreneur who lets himself be diluted as he tries to expand his business and ends up well below that figure. He is the one who is taking the greatest risk.

It is also worth noting that the one purchase that we all make that has not become smaller in the time it takes to earn is government. Government costs the average person more than food, fuel, clothing and housing put together, according to the Taxpayers’ Alliance. I am sure that I am not alone in noticing that there has been a lack of urgency in the public sector over many years to try to reduce the amount of time that it takes for people to fulfil their needs when being dealt with by government. There is a tendency to say that it does not matter how long it takes to get planning

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permission, to get the right regime for a new development, to answer queries about tax planning or to build a nuclear power station. But time is surely of the essence for many businesses. We need a relentless pursuit of productivity in the public sector. Therefore, I especially welcome, as the noble Lord, Lord Bourne of Aberystwyth, said, the provisions in the small business, enterprise and employment Bill to help small businesses to access public procurement.

Finally, I turn to one of the greatest obstacles to innovation—the pessimism enshrined in law at the European level in the form of the precautionary principle. This means that potential risks are weighed in advance but potential benefits are not. The precautionary principle, essentially, asks us to measure the risk of innovating but not the risk of not innovating. George Freeman MP has produced an especially hard-hitting report making the argument that the European Union’s precautionary approach to biotechnology, both in agriculture and in medicine, is greatly harming innovation and condemning Europe to a back seat in the biotechnology revolution. In his report he says:

“Just as the genomic revolution is beginning to offer untold opportunities across medicine and agriculture to help us generate huge economic, social and political dividends for mankind by helping to liberate billions from the scourge of insufficient food, medicine and energy, the EU is developing an increasingly hostile regulatory framework which risks undermining Europe as a hub of biotechnology”.

That is an especially acute problem in agriculture. We now can see very clearly that the ban on genetically modified food over the past 15 to 20 years was a mistake in terms of both environmental and economic problems because it has greatly increased Europe’s reliance on pesticides.

I hope that innovation and dismantling the barriers to innovation will run through everything the Government do, and will continue to do so.

9.16 pm

Lord Smith of Leigh (Lab): My Lords, I, too, want to comment on the bits missing from the gracious Speech. I shall speak to the welfare aspects of this debate from my perspective as the recently re-elected leader of Wigan Council and as chair of the Greater Manchester Combined Authority. The four aspects I wish to talk about are the bedroom tax, universal credit, the new Work Programme and the Social Fund.

The bedroom tax is acknowledged to be a failure by everyone except the Government. It has not delivered the objectives they claimed it would. It has not saved housing benefit to the extent that they claimed it would, partly because they overestimated the numbers of people who would be affected. Also, as I have told the House before, in places such as Wigan moving from a three-bedroom council house to a private one-bedroom house involves higher rents, and the housing benefits are therefore higher, too. So it has failed to meet that target and the target of persuading people to move. In my authority, only 102 people have moved as a result of the bedroom tax—not because many of them may not want to move but because smaller properties are simply not available in the public sector. People are stuck where they are and they are stuck with the bedroom tax. Nationally, only about 4.6% of people have moved as a result of the bedroom tax.

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However, the bedroom tax has had major consequences. One consequence is that the number of tenants now in arrears has shot up considerably—it has increased to 55% nationally, I understand, according to the Joseph Rowntree Foundation. In Wigan, arrears have gone up and we are trying to manage that, but it is difficult. Despite the application of discretionary housing payments, there is simply not enough money to meet the need in my authority and therefore people get into difficulties. Of course, there have been some beneficiaries of the bedroom tax in Wigan: there are far more payday lenders in the town now than there ever were before.

I believe in reform of the welfare programme. I was surprised when the Minister, in introducing the debate, referred to the success of universal credit. As far as I know, it has not yet been rolled out in a programme. I always had doubts. The Government’s ambition led them to do it far too quickly without making sure that they could cope with any difficulties that arose. To understand this better, my authority, as the noble Lord, Lord Freud, knows, became a pilot and a pathfinder authority. We wanted to learn the lessons that could be learnt from introducing universal credit. We did a small experiment for newly unemployed single persons who get on to universal credit—just over 1,000 people so far—and soon discovered the major flaws in the actual process. They are pretty obvious.

First, people do not have the skills in personal budgeting, so we have had to try to remedy some of that. Secondly, they lack access to financial institutions into which they can have the benefits paid. Banks do not, frankly, want people on that kind of income as their clients, as they are far too costly and too difficult, so we have had to set up more credit unions to try to cope with the problem. The third problem is the lack of access to and understanding of IT. I think the national figures, which our experience bears out, are that about 40% of this group do not have access to IT and find it difficult. We have been able to set up schemes within the local authority to try to do this. We can do it for a small group of clients, but if we had had to roll out the full scheme, as was originally threatened, for 1 April, it would have been beyond us to cope with the scale of the problems. I hope the Government understand that we want to help. We understand the need to reform welfare but we need to be very cautious about what we do.

The press seems to indicate that the Government, apart from not being able to get their computer system up and running, are having somewhat of a rethink. I want to ask them to consider rethinking the idea of making direct payments of housing benefits. This is one of the most difficult things for people to manage. All that would happen in many cases is that people would get into severe debt, leading probably to homelessness and so on. If the Government work with local authorities, I think we can reach an understanding; otherwise, again, we will simply provide more help for payday lenders.

I was also surprised when the Minister said in his introduction that 500,000 people had got jobs through the Work Programme. If they have, then maybe somebody ought to tell the providers, because they have only

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been paid for 48,000 places provided in respect of long-term unemployment. Maybe there is a deficit there that needs to be fixed. Those 48,000 would represent about 3.2% of the 1.5 million people who have been through the Work Programme. I do not think that is particularly successful.

However, I am genuinely pleased to note that the Government are actually beginning to understand more that this is not simply a numbers game but about understanding the people we are dealing with and their needs. I accept that, for many people, getting and keeping a job would be a real transformation in their lives. However, for many people, we have to transform their lives before they can get and keep a job. The Greater Manchester Combined Authority is running quite an ambitious “Work Programme plus” with the Government, which, fortunately, the DWP has agreed to. That will give people not only a key worker to help them with their problems but access to a range of supporting services from local authorities, health authorities and mental health authorities to help them.

There is a gap in understanding in this House about the nature of poverty and how poor people work. However poor people are, and whether that is due to unemployment, low pay or zero-hours contracts—whatever the cause—people can have a crisis in their lives. Children needing shoes, an unexpectedly high energy bill or whatever it might be can cause a real problem for them. The Social Fund was set up to try to deal with crises of this nature but, just as the recession was beginning to bite, the Government passed the Social Fund on to local authorities and halved the available money. I do not think that was the right thing to do, but we coped with it. We decided that we would try not just to cope with the crisis situation but to be more thematic. Rather than say to someone, “You need a new fridge, here’s the money”, we try to find providers who will give them fridges—we will call down a contract for fridges. That saves us money and is more effective. However, from April 2015, even the paltry sum we have is going to disappear. What do the Government expect to happen from April 2015? Do they expect hard-pressed local authorities to provide the funding? In many cases, that will not be possible.

If the Government really cared about fairness in our society, they would reverse that mean-minded policy and work with local authorities to change the lives of people with complex dependencies. That would be an investment, not a cost. The Government would save money, local authorities would save money and we would manage to help people turn their lives around, not just for this generation but for generations to come.

9.25 pm

Lord German (LD): My Lords, before I turn to the centrepiece of the gracious Speech’s measures, I would like to say a few words about the plastic bag tax. I had the privilege of chairing the committee of inquiry in the National Assembly for Wales which looked at this issue prior to the legislation being introduced in 2011. My message to noble Lords is: do not panic. It will all work out. It will all be very successful and it will have two very valuable outcomes.

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First, the plastic bag tax will change people’s behaviour. It will make people behave differently. You are just as likely now in Wales to see someone with a Tesco bag for life shopping in Waitrose with it and a person with an Asda bag for life shopping in Sainsbury’s. The fact of the matter is that people now carry their bags with them and very few people resort to buying a plastic bag.

The policy will also produce a hardened attitude towards protecting the environment so that it becomes important to people. It is a bit of a culture shock for me to come to London, where people continuously want to thrust plastic bags at me. I usually try to refuse but on occasions I am in a queue and I get a plastic bag, but I refuse to throw them away, because that is what we do not do now in Wales—you do not have them to throw away. So I now have a boxful of plastic bags that I do not quite know what to do with, so if anybody needs a bag for life I have some that I can give them for nothing. I will bring one of my biodegradable plastic bags for the noble Baroness, Lady Sherlock, next week, which of course are a prerequisite if you are going to dispose of food waste, which is primarily what they are used for.

I was looking for an analogy from the natural world, the environment, which fits the changes that this Government are making and have made in the area of pensions. The segue between the two is a bit tricky. After all, we have just had the announcement of two Bills this Session, following on from the new single-tier state pension and auto-enrolment the year before. It is a pretty seismic shift in the crucial and previously much underplayed sector of pensions.

My analogy from the natural world is about the experience I had with forestry in Wales. Some 12 years ago, I was the member of the Welsh Government with responsibility for forests. I introduced a major change in tree planting. I discovered that previously taxpayers in Wales had been heavily subsidising the growth of cash-crop conifers, reflecting a bygone age when pit props were needed in great numbers. But in effect the Government and taxpayers were subsidising timber for garden sheds, fencing, DIY products and the like. The change made was a presumption in favour of planting broad-leaf trees and providing natural growth so that our forests would become varied and contrasting places for recreation and leisure. Now, some 12 years later, the true value of cash-crop timber is slowly becoming apparent and conversely more forests are being opened up for public enjoyment, tourism and leisure. That was a change which had profound and significant outcomes for generations to come. That is my segue: it is the same with the pensions revolution that we are seeing.

Actions taken by this Government in their five-year term will lead to profound and significant changes that will benefit many generations to come, fulfilling an ambition for what people want from their pension: a reasonable idea of the level of pension they will eventually get; a pension that gives them best value for the contributions they have made over the years; and a pension which is as straightforward and understandable as possible. I took to heart the speech of the noble Lord, Lord Holmes of Richmond. It hurts your head,

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he said, and it can hurt your head. Anything that we can do to make it straightforward and understandable and get people engaged with it is very important.

I pay tribute to my honourable friend Steve Webb for delivering those changes, which, taken as a whole, see more people saving for their retirement and a better provision of choice and control for the pension saver. I know that my honourable friend did not know the price of a Lamborghini before he made that statement, but he certainly did afterwards. Many people have commented on that matter today. I will certainly transmit the message to him that there are very fine motor vehicles produced within the United Kingdom which compare very favourably indeed.

In that list is a better state pension—last year’s measure—locked against the vagaries of inflation, price rises and government action, the extension of the range of pension products available and more certainty of a pension outcome. That is the benefit in just a few years. We now have more than 3 million new pension savers in this country, but there are many millions yet to join the pension-saving population. Getting the changes right is critical for all those saving for a pension. The two Bills outlined in the gracious Speech indicated by the Government as the centrepiece of the programme are part of the building blocks for the pension ambition, the ambition of which I spoke about earlier. They will need close scrutiny to ensure that, in their detail, they play a full part in meeting this ambition.

In respect of the private pensions Bill for a defined ambition pension, I welcome the Pensions Minister’s statement that the Government will not be taking an off-the-shelf product which replicates the system in the Netherlands, Denmark or even Canada, but that we will have a product which suits the United Kingdom market and the needs of United Kingdom pension savers. However, there are already some emerging and important questions to be asked. Perhaps I can tempt my noble friend to address some of them in his winding-up speech.

For example, on the Treasury’s pension tax Bill, giving people choice on the use of their pension pot raises a critical issue for the success of that new freedom: the guidance that pension holders will receive. As many noble Lords have said today, the Government’s consultation does not end until tomorrow, but there is huge time pressure to get it right. The big question is: what will be the nature of the Government’s guarantee of free, impartial and face-to-face guidance to DC pension holders, as announced by the Chancellor? What will be the degree of independence in the provision of guidance? I am sure that this House will want clarity on how the Government’s guarantee will work, how it will be funded, how it will be triggered and how savers will be dealt with both before and after the guidance has been received. The new pension products that we are talking about in the second Bill—the target pension—will help share the risk, provide stability and, crucially, more certainty, for pension savers but, once again, there are questions to be asked.

The pensions landscape will have changed with profound and significant effects for future generations after all those measures have been passed in this

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Parliament. I pay tribute to the Government for putting this centre stage, but we need more engagement with pension savers. Then we should get greater understanding, which is crucial. A good start would be—I believe that this is possible—a new political consensus in this Parliament to provide long-term continuity towards that goal and ambition which I believe we all share. As I said, the pursuit of greater understanding is critical. After all, the money is the savers’ money and managing their savings plays an enormous part in people’s well-being in later life.

My plea for political consensus means that we have to have all the key information and analysis available for our consideration. My noble friend has a track record of providing information in abundance, so I very much hope that he will be consistent and live up to his magnificent record of delivering papers to us in such numbers that we will have no complaints from any part of this House about not understanding the Government’s intentions or their analysis of the problems which we face.

I believe that what we see before us is a seismic shift in our pension system, which will have a profound effect for many generations to come.

9.35 pm

Lord Stevenson of Balmacara (Lab): My Lords, I start by congratulating the two excellent maiden speakers. The noble Lord, Lord Bamford, made some direct and very sensible suggestions about the UK earning its way through engineering and utilising our manufacturing capacity, but also by investing in training. The endorsement from my noble friend Lord Young, who had visited the noble Lord’s training centre, brought that directly into our discussions. I also thank the right reverend Prelate the Bishop of Durham for his fascinating story about his personal journey to his current see, his tour d’horizon of Durham and the north-east and his commitment to represent the north-east in this House. By a curious quirk of fate, I think that I was responsible for responding to the maiden speech of his immediate predecessor, so without having to do much research I happen to know that he was the 73rd in the line and that the third was another Wilfred. We do not get many Wilfreds, as I said at that time, so I am always pleased to be able to reflect on that and make sure that they get the credit they deserve for having such a ridiculous name.

Looking at how the contributions panned out in this discussion, it is interesting that the majority have been on the business, employment and pensions side of the debate. Of course, we also have it in our title to deal with other issues. Despite a late run from those interested in agriculture and the environment, I am afraid that the preponderance of the debate was in the former areas. I will not pre-empt the Minister, who I am sure will want to go through in some detail the individual contributions made by many Members right around the House across the range of issues. However, I hope that when he comes to respond or when he reflects later, he will wish to write to us about some of the points—particularly the interesting points made by the noble Lord, Lord Tugendhat, about the changing foreign policy context and his concern about the lack

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of an ability to stop takeovers which might be damaging to viable and successful British-based companies. I would be interested to hear the Minister’s comment on those points.

It is difficult to believe that the irrepressible noble Lord, Lord Holmes of Richmond, ever has a sore head but he did go on about his pensions experience, so I hope that we will get some interest on that. I also hope that the Minister, when he responds, will pick up the important points made on taxation by my noble friend Lady Hollis. We heard quite a lot about the dark side of the flexible contracts which are represented mainly by zero-hour contracts, although there are other variations. That was raised by my noble friends Lady Hollis, Lord Monks, Lady Donaghy, Lady Turner and Lord Young. I also thought that some important points were made, particularly by the noble Lord, Lord Aberdare and my noble friend Lord Macdonald, about the new rules for apprenticeship schemes, which need addressing.

The noble Lord, Lord Mitchell, took us into a digital world and I would be interested to know whether the Minister felt that there was anything in his suggestion for a digital Magna Carta. I am sure that is not just a scheme for a rather elaborate and high-tech exhibition during the anniversary year but reflects a deeper concern about the way that the internet can sometimes get out of control and cause problems, and that some code of conduct—some Magna Carta, as my noble friend put it—would be a good way to go.

The noble Lord, Lord Clement-Jones, made a very important point about visa problems in higher education and in particular on the question of post-doc students. Our universities are suffering badly from this and I would be grateful if the Minister could pick up on that. Also, how can we not have a full and well documented response for that innocent pensioner, the noble Lord, Lord Smith of Clifton? His story of wandering in the deeper recesses of BT and the Inland Revenue must have made the Minister sad, so he must respond. We want to know the real story—even if it is £3.17, as the noble Lord said, there could be a lot of them.

The noble Lord, Lord Bourne, said that we should not discount this year’s Queen’s Speech just because it had a small number of Bills. We do not discount it on those grounds but because when we consider it, the key question is: does it help revive the economy, generate good and well remunerated jobs, ensure that good quality and affordable education and training is available and that good affordable housing is accessible? Does it reassure us that nobody will be left behind? The answer to those questions is that it does not. The Bills do not address the severe cost of living crisis in Britain, where food bank use is soaring, even among many working people, where personal debt levels are dangerously high, where wages have fallen in real terms as essentials such as food and energy prices rise, where too many people are trapped in part-time jobs or with low hours or exploitative zero-hours contracts, and where millions cannot afford to buy their home and are trapped into renting low-quality properties at ever rising rents.

Several noble Lords touched on the question of personal debt, which again seems to be financing our recovery. I share the disappointment that there is little

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in the legislative programme about the problem debts that are facing millions of our fellow citizens. I declare my interest as chair of StepChange Debt Charity, which is the UK’s largest provider of free-to-client debt management plans; we deal with more than 500,000 clients every year who have problems with personal debts. I think that the Minister is aware of our work in this field, and we are looking forward to talking to him about our recent report,

Life on the Edge

, which shows how a lengthy period of low or no wage growth and rising living costs has left millions of households stretched to their absolute financial limit.

Individuals and families are paying a high price for the high levels of personal debt. The economy suffers too. Debt is a brake on people’s capacity to work or return to work, and on their aspirations and potential. It leads to mental health problems and family and relationship breakdowns, and has an adverse impact on the wider community. Equally, all society benefits if we tackle this problem. Otherwise, such people all too often turn to high-cost credit, and the recent work announced by the Financial Conduct Authority has shown that we still have much to do to drive bad practice from this sector.

I believe that the time has come to have a mature conversation across all parties about a national strategy for personal debt. In particular, I suggest that we need to look north to Scotland to see how its statute-based system operates. We need to build personal financial resilience so that the poorer members of our society are not paying the highest prices for essential goods and services, there are better safety nets and there is a more formal role for creditors in helping those in financial difficulty.

Another source of personal debt is of course the contingent tax liabilities that students are incurring in higher education. As my noble friend Lady Warwick said, there is now a growing consensus that the higher education reforms introduced by the coalition since 2010 are a complete disaster, yet we look in vain to find a higher education Bill. In a country where living standards are under acute pressure and where the deficit still looms so large, I agree with the noble Viscount, Lord Ridley, that innovation is the one sure way out of austerity. That is why our universities are so important. They are the powerhouses of the knowledge economy. They need to be bigger, stronger and more central to our economy in the years to come. Britain needs to put science and innovation at the heart of a strategy for long-term economic growth. Unless we grow smarter, we will grow poorer. What has been created over the past four years is not sustainable in cash terms. It does nothing to boost the science base, to diversify student choice, to bring universities and business together or to deliver effective progress toward better social mobility. This is something that we will definitely need to return to.

The small business, enterprise and employment Bill, which will be reaching the House towards the end of this year, has been covered by a number of people and I do not want to go into it in too much detail. It really is a very weak Bill, and the common theme across this motley collection of measures seems to be that the majority of its proposals were in fact first raised by

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the Labour Party, often in debates here in your Lordships’ House, although of course they were summarily rejected by Ministers.

The issue of pub companies was raised at the end of our debate. Labour has consistently called for a statutory code to give pubs the protection they need and ensure that landlords get a fair deal. Ministers have dragged their feet on this issue for more than three years, during which time hundreds of publicans have lost their livelihood. We are pleased that the Government have now accepted many of the arguments that they repeatedly vetoed in the House of Commons, but we fear that the watered-down reforms will not address the large increase in pub closures that we have seen. The changes that Ministers have announced do not include a free-of-tie option or the genuinely independent rent reviews that Labour and campaigners have been calling for. Instead, the proposed code includes parallel rent assessments, which will give tenants greater information but not the right to exit the beer tie.

We welcome the measures on late payment. Ministers have repeatedly promised to tackle this scandal, which severely affects the cash flow of small firms. The previous Labour Government legislated so that late payments at least incurred interest; alongside that, they established the prompt payment code. However, we want to see greater transparency to help to prevent late payment, including through reporting requirements on payment performance in companies’ accounts.

On business lending, any scheme that helps small businesses to access finance is welcome, but the record of the Government in getting the banks to lend to small businesses has been one of complete failure. Every scheme, from Project Merlin to Funding for Lending, has completely failed to deliver. Figures published this week show that in the first quarter of this year net lending to SMEs by Funding for Lending participants actually fell by £700 million, and in the past year net lending to SMEs has fallen by £3.2 billion. The press notice says that the main purpose of this Bill is to,

“build a stronger economy by supporting small business as they compete”,

but it is hard to see where the real needs of the majority of small businesses are being addressed.

The world is changing faster than we can comprehend with global economic forces moving south and east. This is creating huge opportunities in a world where the global middle class is expected to treble to 5 billion people in the next two decades. So surely what we needed in this Queen’s Speech was a Bill that would transform our economy and back our businesses to make the most of the new opportunities there so that we can innovate and grow our way to higher standards of living for all our people.

I absolutely accept, and I am sure it is common ground between the parties, that the 2008 crash exposed long-standing structural problems in our economy. The economy was unbalanced by sector and region, short-termism in our corporate culture led to low levels of business investment and low productivity, and a dysfunctional finance system and a stubborn and increasing trade deficit all did their work.

Although some growth has finally arrived, as my noble friend Lord Liddle said, it is not the balanced and sustainable growth we need, so prices are still

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rising faster than wages and the continuing cost of living crisis for many means that individuals are, on average, £1,600 a year worse off compared to 2010, so business as usual is not good enough. To set the foundations for future success, we need to take a different approach.

The noble Lord, Lord Higgins, challenged us and said that we did not have a strategy for the economy, but Labour has a long-term plan to earn and grow our way to higher living standards. Our goal is a high-productivity, high-skilled, innovation-led economy. To get there, we absolutely accept that we need more British-based businesses creating good jobs, investing, innovating and exporting.

If elected in May 2015, we have already announced that we will take action on immediate pressures that businesses face. We will help 1.5 million businesses by cutting business rates in 2015 and freezing them in 2016. We will reform the energy market to put transparency and competition back into the industry, as well as freezing energy bills until 2017, saving the average business £5,000. We will boost real competition in the banking sector. To lay the foundations for long-term success, Labour’s plans include radically reforming vocational education and apprenticeships putting employers in the driving seat, creating a higher skilled workforce, driving up productivity and underpinning higher wages. We will support lending to businesses by creating a proper, independent British investment bank and a network of regional banks with a responsibility to boost lending in their direct area.

We will support green growth by backing the 2030 decarbonisation target, giving the Green Investment Bank borrowing powers and prioritising investment in science and our innovation system. We will establish a small business administration to champion small business at the heart of government. We will devolve powers to cities and regions to boost growth and rebalance the economy, allowing local knowledge to solve local problems and we will encourage longer-term decision-making in business and government through rules and incentives for business that reward a longer-term focus, and an ambitious industrial strategy to support long-term growth.

It is clear from the recent election results that too many people do not feel a sense of personal or community well-being. They feel insecure and ill equipped to deal with change and harbour a deep sense of unfairness. Like my noble friend Lady Sherlock, I feel that the gracious Speech failed to respond to the needs of the people for security, fairness and stability. What we need is a legislative programme that will tackle the challenges ahead to restore real growth, tackle debt and build an economy that works for all our people, not just for those at the top. With this Queen’s Speech, the Government had an opportunity to respond to some of these challenges, but I fear that that they have failed to do so.

9.49 pm

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con): My Lords, I thank our two maiden speakers today, my

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noble friend Lord Bamford and the right reverend Prelate the Bishop of Durham, for two excellent speeches giving us the promise of some really formidable contributions in the years to come. They are on notice that more are required. I also need to thank my noble friend Lord Smith of Clifton for his account of his encounters with HMRC and BT. Clearly he has a future as a novelist along the lines of Kafka; I commend him.

I will start off with the two private pensions Bills that we have coming. We have the pensions tax Bill, which gives people far more discretion over what to do with their retirement funds when they come up to retirement; and much greater innovation within the private pensions market in the other Bill. One of the issues raised by a number of noble Lords—the noble Baronesses, Lady Sherlock and Lady Drake, and my noble friends Lord Holmes and Lord German—is about guidance. We agree that guidance needs to be impartial and to meet the needs of those who need to access it. The consultation closes tomorrow, so clearly I cannot tonight pre-empt its outcomes. However, I assure noble Lords that the response to that consultation will be out before Recess.

A question was raised by the noble Baroness, Lady Sherlock, and my noble friend Lord German about the impact of these various changes. We made an announcement at the Budget on the Exchequer impact of those reforms. We are currently consulting, as I said, on the guidance guarantee. The information gathered there will help to form the estimate of the reforms’ impact. I can confirm that we will publish a full impact assessment on the defined ambition reforms alongside that Bill.

There was a little bit of political teasing, I think I would call it, on compatibility of the two Bills from the noble Baronesses, Lady Greengross, Lady Hollis and Lady Drake, and the noble Lord, Lord Monks, the issue being the obtaining of savings at retirement age and the collective nature that some schemes may adopt under the defined ambition Bill. It is consistent, because members will be able to cash out their collective benefits if they are in that kind of scheme, in the defined ambition context, if they so choose.

The noble Lord, Lord Monks, raised a question about why we are looking at collective schemes when the Dutch are moving away. I am reliably informed that the Dutch are not moving away from collective arrangements. We are, however, looking very closely at what they are doing and learning lessons from their experience. The issue is that there needs to be a clear allocation of pension rights to individuals, as well as requiring schemes to disclose in detail what members are entitled to.

Moving to the issues of welfare and employment, on which there have been and continue to be a range of changes, I go directly to the points of the noble Lord, Lord Smith of Leigh, on his experiences in Wigan. I went up to Wigan and joined him when we started the pilots there. One of the things that we are doing is developing a quite intense relationship with the local authorities in various areas as we roll out universal credit. What he was describing—the responses that the local authority is becoming involved with—is exactly what we are talking about doing. For the first

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time we are getting real support, on a fairly holistic basis, for individuals who have never had that kind of support before. We are learning an enormous amount, including from Wigan. I therefore turn round the way in which he made those points to say that we are trying to get those local authority responses so we can get the kind of support to people that they have never had and which they need. As we roll it out in volume we have learnt and are learning the lessons of how to do that so that we do it successfully when we roll out the local support service framework, as we are doing.

On the other point the noble Lord made on the removal of the spare room subsidy—although he did not express it quite like that—I point out that the Homes and Communities Agency published figures yesterday which suggest that arrears are increasing, not decreasing in the social housing sector, despite various changes.

On the point raised by the noble Lord, Lord Morris, that work is not a sufficient route out of poverty, clearly that is one of the most interesting trends over the past decade. The previous Government tried to deliver their child poverty targets and managed to pay it out through raising benefits, but that did not have the impact on people who were in work. Universal credit is designed to do exactly that: to make sure that people who work full-time, even on low wages, are brought out of poverty by the way that universal credit works. We expect that it will take 300,000 children out of poverty through that sort of effect.

The noble Baroness, Lady Turner, made points on homes. In 2014 we are expecting to deliver over 60,000 more affordable homes in England, which is the largest number for almost 20 years. My noble friend Lord Addington made a point on the disabled students allowance; we are currently engaging with a wide range of stakeholders on the development of our guidance, which we plan to publish in the autumn. However, I will pass on his helpful comments to the Minister.

The small business, enterprise and employment Bill is designed, as my noble friend said in the introduction, to help ensure that the UK is the best place for businesses to start, to innovate and to grow.

A wide spread of noble Lords—the noble Baronesses, Lady Sherlock, Lady Hollis, Lady Drake and Lady Donaghy, and the noble Lords, Lord Monks, Lord Morris and Lord Young—focused on the zero-hours contracts issue, basically making the point that the Government are not doing enough here. The Government have made clear that zero-hours contracts play a part in a dynamic and flexible labour market, and recent figures published by the Chartered Institute of Personnel and Development support that. Those on zero-hours contracts said that they are equally satisfied with their jobs, happier with their work-life balance and less likely to think that they are treated unfairly by their organisation when compared to the average employee. However, zero-hours contracts can be abused, and shortly we will announce how we intend to tackle that through the Bill.

We have moved from consultation to action on this in less than 12 months, which is fast and in contrast to the Opposition, who initially consulted on the abuses

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of zero-hours contracts back in 1998. I was interested to muse over their paper, as I am sure they have done. It was called

Fairness at Work

. It was clear in stating:

“Many employers ensure the contracts are used sensibly, but they have the potential to be abused”.

The White Paper went further by welcoming:

“Views on whether further action should be taken to address the potential abuse of zero hours contracts”.

But nothing happened in the next 12 years. So it is 16 years later and I am very pleased to hear the Opposition belatedly making some suggestions.

The noble Baroness, Lady Hollis, also focused on zero hours. We will not mandate the universal credit claimants to zero-hours contracts that do not allow the claimant to work for another employer. She expressed concern about the difficulty of vulnerable people in claiming credit. The current figures, a pilot having gone for a year in a place that is expanding, are that over 90% of claims to universal credit are made online. Clearly the local support service framework is designed to get that support and service to as many people as we possibly can.

Many noble Lords talked about apprenticeships and what the Government are doing, including my noble friends Lord Bamford and Lady Sharp, and the noble Lords, Lord Liddle, Lord Bhattacharyya, Lord Aberdare, Lord Desai, Lord Macdonald and Lord Young. It is not a numbers game, but we are on track to deliver 2 million apprenticeships. There were over 868,000 people undertaking an apprenticeship in the 2012-13 academic year, which is the highest in modern history. We are making efforts now, following the Richard review, to ensure that apprenticeships are more rigorous and more responsive to the needs of employers.

On the question of how we break down the barriers between academic and vocational training, we want it to become the norm for young people to go into an apprenticeship or go to university, or do both in the case of some higher apprenticeships.

On the question of careers advice, schools now have a legal duty to secure access to independent career advice to pupils in years 8 to 14 and this must include information on apprenticeship.

Industrial policy was raised by my noble friend Lady Sharp, and the noble Lords, Lord Liddle, Lord Haskel and Lord Desai. We have five main themes in our industrial strategy: technology; access to finance; skills; procurement; and sectors. We have invested in emerging technologies—the £200 million for the seven Catapults to speed up technologies’ commercialisation, which is getting products to the market faster.

There is also £600 million to develop and commercialise the “eight great technologies” that we have isolated. Space was the one that my noble friend Lady Wilcox focused on. She mentioned the others: big data, robotics, regenerative medicine, synthetic biology, agri-tech, advanced materials and nanotechnology, and energy storage.

We were reminded of the metric system by my noble and learned friend Lord Howe. The Government support a single system of units of measurement in principle but recognise that many people in the UK

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prefer or are more familiar with imperial units. Therefore the Government are committed to retaining the existing usages of imperial units for as long as consumers and business find it useful, which, I suspect, is not the answer that he wanted to hear from me.

On the issues of agriculture and environment, the noble Baroness, Lady Sherlock, and my noble friend Lady Parminter asked why biodegradable plastic bags were exempted. It is fundamentally a challenge to UK industry to produce a genuinely biodegradable bag that meets defined criteria. We have awarded four contracts for feasibility studies looking into developing biodegradable bags and economically viable methods for separating bags from the waste stream.

The noble Lord, Lord Soley, asked about our response to the Natural Capital Committee’s second report. It needs to be considered fully, and the work of that committee has given us some interesting insights into how to value natural capital in government policy.

The noble Lord, Lord Northbourne, made the point about preparing children for adulthood. The Secretary of State for Education has spoken publicly on a number of occasions about the importance of developing character skills in young people. The DfE is supporting schools

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in different ways to develop and build the characters of their pupils and is making it easier for them to choose how to do this.

The noble Lord, Lord Stevenson, raised an issue about public houses and why we were not pursuing a mandatory free-of-tie option. While there were many calls for the introduction of free-of-tie, there were also widespread concerns that such a move would create uncertainty for pub-owning companies and have an unpredictable impact on the wider pub sector. This is because, if significant numbers of tenants decided to go free-of-tie, the whole tied model might no longer be viable because pub companies would lose their purchasing power and with it the ability to service a smaller and potentially more disparate tied estate. Our reforms will rebalance the relationship between the pub-owning companies and their tenants without threatening the balance of the wider industry.

I hope that I have covered most of the points. I do not think that I have covered absolutely everything, but that was, of course, impossible. I will write on anything significant that I have missed out.

Debate adjourned until tomorrow.

House adjourned at 10.07 pm.