These figures suggest that social policy is not tangential to success in criminal justice policy, but absolutely central to it. The Justice Committee has highlighted the importance of joining up welfare and criminal justice policy to tackle offending and reoffending. Commenting on the launch of its recent report on prisons, planning and policies, the then chair of the committee, Sir Alan Beith, said:
“The Committee has repeatedly emphasised the dangers of allowing the prison population to escalate and consume huge resources which could be better spent on preventing crime, for example, by dealing with drug and alcohol addiction and further expanding programmes, like the Troubled Families programme. The public look to the criminal justice system to demonstrate that crime is taken seriously, but that means tackling and preventing crime effectively, not merely locking up more and more offenders at massive cost to the taxpayer”.
A number of the previous Government’s policies and initiatives recognised the social and economic dividends that can be gained from a closer co-ordination of welfare, health and criminal justice policies. I am pleased to see that some of these are being taken forward and developed in the proposals contained in the Queen’s Speech.
Alternatives to custody represent the most positive policy in the management of offenders, as well as the one most likely to succeed. Taking offenders out of the community by putting them in prison may work as punishment in the short term, but the evidence is that it is not nearly as likely seriously to reduce offending behaviour.
The troubled families initiative rightly recognises crime and anti-social behaviour as important indicators of disadvantage. The National Audit Office has acknowledged the potential of such programmes both to deliver savings—an outcome always welcomed by Governments—and to represent a more co-ordinated approach to tackling social problems. I welcome the commitment in the Queen’s Speech to,
“expand the Troubled Families Programme”,
and I hope that this will include efforts to ensure closer co-operation between welfare and criminal justice.
There have been welcome changes in the justice system in the treatment of people with mental health needs and learning disabilities. More than half of England and Wales is now covered by liaison and diversion services in police stations and courts, and a full national scheme is planned to be put in place in 2017, subject to the Treasury’s approval.
There are important footholds for greater co-ordination between social and criminal justice agencies in the reduction in recent years in the numbers of children and young adults in custody. Over the past three years, the number of children in prison has reduced by 60%, while levels of youth crime have also fallen. This success is in great measure due to the work of the Youth Justice Board, which I wholeheartedly applaud
and which oversees the multidisciplinary youth offending teams based in local authorities. YOTs bring together social workers, police, probation, health and welfare agencies to help keep children out of trouble and to divert them wherever possible out of the justice system into appropriate treatment and support. This intervention alone enormously improves the chances of young people, reducing their offending and keeping them out of prison.
The Transition to Adulthood Alliance has commissioned substantive evidence to show the benefits of extending the multidisciplinary approach to young adults. While people aged 18 to 24 accounted for one in 10 of the UK population in 2010, they account for a third of those sentenced to prison each year, a third of the probation service caseload and a third of the total economic and social costs of crime. Those in this age group are particularly impressionable and subject to influence by peers, but they can also benefit from intensive community and multidisciplinary approaches to divert them out of crime.
A group that is disproportionately represented among children and young people in prison is children who have experienced local authority care. Looked-after children make up 33% of boys and 61% of girls in custody, despite fewer than 1% of all children in England being in care. The noble Lord, Lord Laming, is currently conducting an independent review supported by the Prison Reform Trust into improving outcomes for this particularly vulnerable group in the justice system. It is a real issue: these young people, whose lives have been characterised by disadvantage, badly need more attention paid to their welfare in the widest sense.
I am really grateful for the opportunity to speak on these issues today—out of context—because they crucially concern the management of offenders and the relationship between offenders and communities. There is an assumption that these issues belong exclusively within legal and home affairs, but bringing them to this context, unlikely though that is, may not be an entire waste of time. The silo mentality between government departments must be broken down if we are to have communities which can, instead, enjoy cross-departmental strategies to reduce offending and reoffending.
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The Earl of Caithness (Con): My Lords, I can hear a collective sigh around the Chamber as we come to the last Back-Bench speaker after five days of debating Her Majesty’s gracious Speech.
It is always a pleasure to follow my noble kinswoman and, although nearly 30 years ago prisoners occupied my working day and working night, I will not follow her down her road. It is a pleasure to see in his place my noble friend Lord Finkelstein, who so ably seconded the gracious Speech. I hope that at some stage during the previous five days he has been able to leave it and go and do some other things. However, we very much enjoyed his speech.
I also enjoyed the maiden speech of my noble friend Lord O’Neill of Gatley. I make a plea to him and to the other new Ministers, who are highly talented: please, in the future, will they follow the example set by the noble Lord, Lord West of Spithead, who was
also parachuted into this Chamber as a Front-Bench Minister, and not the example of others, of whom we see so little nowadays?
I agree with so much of what has been said over the past five days. The aspirations for health, defence, education, research and the environment are to be welcomed. However, in reality, those aspirations can only be delivered on the back of a strong economy and living within our means. Some politicians can be very prudent with their own home budgets but very good at spending other people’s money.
We have heard much about the UK’s productivity. We are not alone in the problems that we face. We are part of Europe, and Europe is increasingly the aged aunt of the world—and I fear it is getting more geriatric. Europe’s share of global GDP has fallen from 30% in 2007 to 23% in 2013. Over the same period, member states’ average ranking on the World Economic Forum’s global competitiveness index has fallen from 34 to 38 out of 144. Europe’s competitiveness on financial market development has particularly suffered, with average rankings falling from 36 to 55. International investment has also declined by €9.5 billion over the same period. The EU has much to do. Perhaps the capital markets union is an opportunity to start to turn round the decline. We hope that it will, and we will discuss that, along with the report that Sub-Committee A did on capital markets, in the near future. If, however, the EU starts to follow the track of the financial transaction tax, the downhill slide will only be hastened.
We look forward to hearing much more from the noble Lord, Lord King of Lothbury, after his excellent maiden speech. He reminded us of the problems that the recent depreciation of sterling had already caused us. I am sure he will agree with me that there will be considerably more problems for sterling unless we rebalance our economy and reduce our budget deficit. The coalition halved it as a percentage of GDP, and that needs to be at least halved again. However, I agree with the noble Lord, Lord Turnbull, that there is no need to reach a break-even for the overall deficit in this Parliament.
The noble Lord, Lord King, also reminded us that improving productivity is easier said than done. Since 2009, productivity has been negative in the public sector, agriculture, energy and water, and the financial services, which together account for about one-third of UK output and employment. The output per worker in the UK economy has barely risen since 2006. It is self-evident that we need better education, skills and infrastructure. My noble friend Lord O’Neill and my right honourable friend the Chancellor of the Exchequer will only move from “good” to “great” status if they stop the talking and take action.
I remind my noble friend Lord O’Neill that the great infrastructure projects for upgrading the A1 and the A14, a new TransPennine railway and airport expansion in the south-east, all high on the agenda today, were high on the agenda when I was a Minister, and that is some long time ago. Today we celebrate the completion of 26 miles of tunnelling under London for Crossrail 1. Would my noble friend agree that it would be a very good idea to get Crossrail 2 started before the end of this Parliament?
I want to focus on one area that is vibrant and fast growing yet where productivity has declined, and that is financial services. There has been a non-stop raft of legislation in the EU since the financial crisis. The effect of much of it is contradictory, with detrimental results. The Government want less regulation and bureaucracy and more competition. I agree with them. Let me give an example of somebody I know. He is an investment manager who runs a fund that has 15 different share classes. Now, for each one, he has to produce a separate key investor information document—a KIID. That often has to be done in the local language. Last year, his firm produced just under 3,000 KIIDs—an increase of over 10% on the year before—in 17 different jurisdictions and in several different languages. The legal and compliance team has increased fourfold in the past four years, and the annual spend on insurance and regulation was up 40% on 2013. The noble Earl, Lord Kinnoull, reminded us that the regulators are competing now just to see who can be the nastiest and grab the biggest headlines. That is compounding the problem.
One needs to bear in mind that all those involved in the financial services industry, big or small, are suffering in exactly the same way as the company that I have described. That company could not be created today, and what is the result? The result is that we will have fewer small firms, less choice, more cost and less opportunity for the investor, and it means that the poorest in society will not be able to afford the advice that they are going to need, which is a very worrying trend.
Never before has so much money been spent on compliance and risk management as today, but things still keep going wrong. There are two views as to why this has happened. One is that the firms are so vast and so complex that proper management is impossible, and the other is that the money being spent is wrongly targeted and a rethink is necessary. Before the noble Lord, Lord Pearson, gets too excited and blames Brussels, I should point out that there is every evidence that what has been implemented in Europe would have been implemented in the UK whether we were in Europe or not. A recent survey by the Centre for the Study of Financial Innovation revealed that 65% of its respondents believe that the UK gold-plates regulations. My noble friend might not agree with that, but he has to keep his own new house in order.
Let us consider the irony and stupidity of the fact that, while we keep heaping qualifications, regulations and costs on the financial sector, any one of us can walk out of this Chamber tonight, set up an estate agency and sell off tomorrow what perhaps for most people is their largest and most precious asset, their home. That is a nonsense.
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Lord Stoneham of Droxford (LD): My Lords, I declare my interest as chair of Housing & Care 21, the housing association. I also welcome the noble Lord, Lord O’Neill, and wish him well in building on the crusading work of the noble Lord, Lord Heseltine, in reviving our northern cities. He will have our fullest support from these Benches in this endeavour. I also
welcome back the noble Baroness, Lady Neville-Rolfe, and look forward to scrutinising the Government’s business and skills agenda in the coming months.
I also congratulate the noble Lord, Lord King, on his maiden speech. All the published histories of the coalition formation quote him as warning the negotiators at the time that whoever entered government would be out of power subsequently for the next generation. If he did say this, he was evidently only half-right. As for the other half, I take it that our resilience and defiance on these Benches still have five to 10 years to prove him, and the noble Lord, Lord Finkelstein, wrong.
As part of this resilience, I want to thank the nine of my colleagues who spoke in this debate and to welcome my noble friends Lady Kramer and Lord Newby to the Liberal Democrat Front Bench after their outstanding service in the coalition Government. We quietly hope that the Government will miss them and that the country will notice. While I thank my colleagues for their contributions today, I think that it is a requirement also to express thanks and appreciation for the work of Vince Cable, Danny Alexander, Jo Swinson and Ed Davey, who played a big part while they were in government in helping the economic recovery after the recession in 2010.
It has been an excellent debate with some remarkable contributions, so I will not hold the House up by repeating them, but I want to draw three fairly concise conclusions which I think the Government need to focus on. As labour markets tighten, living standards will be improved in a sustainable way only if we can improve productivity, but we must be wary of top-down initiatives to improve overall productivity. Overall productivity improvement depends on tens of thousands of small businesses taking decisions to invest more. They simply require stability, confidence, the wherewithal and the encouragement to invest.
I share the view of the noble Baroness, Lady Wheatcroft, that better management is needed. As our motor industry and our sporting teams show, better foreign managers are transforming these sectors. We need to develop more skills at home. Getting the talent out of the City to run things may help and I hope that the noble Lord, Lord O’Neill, will show the way.
Economic growth is not yet balanced enough to be sustainable and to avoid some of the pitfalls of the past. The coalition made huge steps forward in the jobs market but economic growth still remains too reliant on rising consumer expenditure financed on credit and encouraged by rising house prices. We all know where that leads. Business investment is still too low and the deficit in the current trade account matches the deficit on public expenditure as a major problem. The worry is that stronger growth and the net trade deficit may well worsen unless we make more of what we consume as a country.
During this debate I was pleased to go back 30 years and find myself agreeing with my old friend and colleague the noble Lord, Lord Horam, about making housing the number five priority for the Government and about its importance to the economy. I wish to draw attention to the importance of housing because it impinges on the performance of our economy.
Rising property prices due to shortages still encourage overinvestment in property rather than investment in business, particularly at the top end. The Government’s preoccupation with encouraging owner-occupation is simply stoking demand rather than addressing supply. I disagree with the noble Lord, Lord Skidelsky—we do need to concentrate on supply: “supply, supply, supply” should be the Government’s focus in housing. Like any other sector, it needs a plan, a partnership between all the housing sectors, private, public and voluntary.
It would be a tragedy if this Government got waylaid by a pointless political debate on the right to buy from housing association stock. I hope they have the sense to step back from this issue. I further hope that Greg Clark will recognise the need to act quickly if we are to approach a figure of 1 million new homes in this Parliament. The right to buy from housing associations will undermine efforts on the supply side. It is not the same as selling council houses. Housing associations build for sale and for shared ownership; they build affordable houses. There is a compromise if the Government will stop and think. If we cannot have a coalition deal to get rid of this ridiculous policy I hope that Greg Clark will have the good sense to find a way through.
It was noticeable in the early years of the coalition Government that the Conservatives had a blank spot on social housing. Housing associations make a huge contribution and can do more if we utilise their balance sheets better, improve their efficiency and involve them in major regeneration schemes. I urge the noble Lord, Lord O’Neill, to look carefully at the recent publication by the noble Lord, Lord Adonis, on the concept of city villages and how we can use the old council estates for regeneration by turning them into a partnership where we sell some houses, build some houses for rent and build affordable housing for people in social need. These are the measures that we need to increase housing supply. We can use that land and those estates to generate more housing.
These are the kinds of measures by which we, on these Benches, will judge the Government on their one-nation approach. As it did for Macmillan, housing played a vital role in strengthening the economy in the 1950s as well as having important social effects and benefits. It should do so again.
5.34 pm
Lord Davies of Oldham (Lab): My Lords, this has been an excellent debate. The opening speech from the maiden speaker, the noble Lord, Lord O’Neill, set a standard, which we all greatly appreciated. We are very pleased that he has begun in such a promising way at the Dispatch Box and assure him that we will give support to constructive action in relation to the problems of the British economy. However, because of the nature of this debate he ought not to be neglectful of the fact that there will be one or two challenges about as well, particularly when we get on to legislation that gives effect to the Government’s programme.
Fortunately my noble friend Lord Mendelsohn responded first to the debate by identifying our attitude to some of the Bills. That absolves me from having to
be clear about that, except to say that if the Government decide to put themselves in a ludicrous straitjacket by introducing a law that forbids them from increasing various taxes and charges, absolutely confident that there will be no difficulties along the way, that is up to them. The noble Baroness, Lady Wheatcroft, indicated that there might be difficulties and circumstances that none of us can foresee. The Opposition will not ease them out of that at this stage; we will merely concur largely with the legislation.
That will not be so with trade union legislation, however. My noble friends Lord Monks and Lady Donaghy identified our principal objection to this measure and the vindictive quality of it, against a background where it would scarcely be contended that a major issue in the British economy over the last decade has been strike activity. Workers are only too concerned to ensure that there is some progress with regard to the work that they do in circumstances where all is gloom around them. It is quite improper of the Government to engage in what after all is merely an indulgence in ideological spite in their introduction of this trade union legislation. It will not have an easy time in either this place or the other place.
However, we were grateful to the noble Lord for emphasising productivity. I must mention to him that in our last debate on the economy we covered a substantial amount of ground with regard to the deficit, who was bearing the costs of it, how it was best to remedy it and at what pace. But I think that only my noble friend Lord Haskel talked about productivity at that stage. Therefore, it was entirely proper that he should speak early in today’s debate to emphasise that and in doing so support and back up what the Minister said about how important issues of productivity are.
As my noble friends Lady Drake and Lord Macdonald emphasised, we should not underestimate the challenge represented by our low productivity, nor what needs to be done. The OECD report today says that the country’s poor record on productivity is at the heart of the problem with the British economy. It is a poor record that has obtained since the crisis way back in 2007-08. It is quite clear that stronger investment is needed.
My noble friends also identified areas in which it was necessary for public action to be taken. There is absolutely no point in the Government thinking that increased productivity can occur on the basis of a low-wage economy employing low-skilled people. That just leads us into direct competition with other countries that have more than their fair share of low-paid workers. It presents us with a difficulty, because for large numbers of our people their standard of living is so low that we are using public expenditure to subsidise their wages. This cannot make sense in modern Britain.
We want the Government to recognise that they have to do something about this. I know that this will cause a few shudders on the other side of the House, but some of it will involve judicious public expenditure. We cannot enhance the skills of our nation if we do not spend money on education. When I say “education”, I mean state education rather than private, but I am not talking about schools, because the Government recognise that they dare not take a step back on the
question of standards in our schools. Nor am I talking about universities, because there are all sorts of ways in which we should recognise the achievements of our universities. What is critical to defective skill levels is further education: the education that is directed at present towards vocational skills—the very area in which the Government are making the most significant cutbacks. They ought to think again about that.
We also think that higher productivity comes from having a better transport system, from when government offices give answers to employers and their staff rather than keeping them waiting endlessly on the end of a phone, and from when efforts are made to sustain and support business and employment. We think that the Government need to look at those issues with real care. Judicious public expenditure on this would reap dividends.
The other maiden speech that was greatly welcomed was from the noble Lord, Lord King. It was long overdue in our terms, and we hope that he will come back with some frequency. We have these economic debates only two or three times a year. He could perhaps make a date to ensure that he can come to one or two in subsequent years, because we very much valued his contribution. We know of his vast experience. My ears pricked up when the noble Lord mentioned the strength of sterling and the problems that created. I do not know whether anyone else in the Chamber noticed that: up to that stage I had not heard anyone else refer to that issue in relation to the British economy. We all know the virtues of the strong state of sterling—it is quite helpful when one goes abroad on holiday—but it is a little different if one is involved in a competitive market and the pound has had the increase in value that it has had in recent years. We are grateful to the noble Lord. We hope that he will come again and that it does not coincide with the disasters that beset his favourite sports teams, such as those over this last weekend. I have the greatest sympathy for him on that score—at least on English cricket, if not on Aston Villa.
In this debate we have helped to establish that productivity is key to improving our performance. The Government ought to address themselves fully to these issues. I am sure that the Minister will ensure that they do. One theme that we would like to see explored is why we have to wait for the OECD or someone else to produce a report on productivity. Why can we not ask the OBR to report on how the options for the spending review might impact on productivity and living standards, and to set out the sensitivity of their forecasts for the different choices that the Chancellor could make? He would have our support if he suggested that the OBR could take on this work. If we are all united on the significance of this concept for the development of the British economy, let us use every tool at our disposal.
I am all too conscious of the fact that many noble Lords have contributed to this debate. I particularly appreciated the comments of noble Lords who sought to broaden its context. The noble Lords, Lord Skidelsky, Lord Low and Lord Bilimoria, on the Cross Benches all tried to put the present issues confronting the British economy into a general context. I was very grateful for those remarks.
I am Her Majesty’s Opposition’s spokesman not just for Treasury matters but for transport. However, transport has received precious little shrift in this debate, although it is carefully listed in its title. I know that the Minister who is replying will be fully briefed on the transport issues, so I will ask my questions in short order. I was grateful to the noble Baroness, Lady Kramer, for mentioning HS2 right at the beginning of the debate. We unite with others in wishing to see it make progress. The Government have a great deal of work to do and we wish them well on this very important project, but for heaven’s sake let us get away from the idea that it is intended only to accelerate the speed at which people travel from London to Birmingham or, as is suspected in the Midlands, from Birmingham to London. It is about capacity and increasing the transport resources that we have available. That is why it is justified. I hope that the noble Baroness winding up the debate will recognise that I have sought to be constructive on this issue.
However, I am less constructive on any delay in providing runway capacity in the south-east. In that I merely follow the noble Lord, Lord Tebbit, in being critical of the Government, as we both were on Monday. I cannot see how the Government can dodge the question of whether they intend to implement the recommendation of the Davies commission. Are they saying that after all this absurd delay while waiting for this report they will still hold his hand and further deliberate on whether he has got it right or wrong? That is surely unthinkable. Once this report is out, we expect action.
I turn to something which I hope is of concern to most noble Lords, and ought to concern us the most: buses. The bus is the most frequently used form of transport. It is the necessary form of transport for a very large number of our people, particularly the low-paid, whom we want to see improve their position and their productivity.
The Government know what a successful bus service looks like: it runs in London in a carefully regulated system. Meanwhile, there is a free-for-all right across our cities and provinces, and our country is ill served. I hope that the Minister in winding up will say something about buses.
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The Parliamentary Under-Secretary of State, Departments for Business, Innovation and Skills and for Culture, Media and Sport (Baroness Neville-Rolfe) (Con): I thank noble Lords for their interesting and informed contributions to our discussion today about the key areas of business, economic affairs and, of course, transport.
I was also glad to hear the contribution of the noble Lord, Lord King, in his excellent maiden speech. The noble Lord, Lord King, and I share a deep love of the game of cricket and, as the new man at the crease, I wish him a distinguished future to match his distinguished past.
This is an important day for the noble Lords, Lord King and Lord O’Neill. These contributions are the first, I hope, of many in this House but are preceded by the many and varied contributions they
have made outside these four walls. My noble friend Lord O’Neill—the new Dr Johnson—is not only to be congratulated on his compelling speech but on his contribution of the terms BRIC and MINT to the world’s vocabulary and, as we will hear shortly, a new term, “PROD”. Like my noble friend Lord Caithness, I look forward to his continuing contributions because he knows about everything—from the secrets of emerging market success to antimicrobial resistance.
It has been an extraordinarily constructive and erudite debate on a rich and diverse range of issues, well beyond the essay question. In responding, if I fail to answer any noble Lords’ questions, I will write to them. I thank the noble Lord, Lord Davies of Oldham, for his provocative summing-up and I welcome the noble Lord, Lord Stoneham, to the Lib Dem Front Bench. I am very glad to see that he will be helping the House on these issues. I also thank the noble Lord, Lord Mendelsohn, for his kind words and I look forward to debating with him as the House scrutinises the legislation that we will be bringing forward.
Our long-term economic plan is turning around Britain’s economy, as my noble friend Lady Noakes was right to emphasise. In 2008, the UK was hit by the most damaging financial crisis in generations. In 2014, we were the fastest growing of all the major advanced economies. In May 2010, the coalition Government inherited a budget deficit that was more than 10% of GDP. Today, the deficit is half that level and debt as a share of national income is expected to start falling this financial year.
As the noble Lords, Lord Birt and Lord Turnbull, said, debt is too high and we need to reverse the rise as a share of GDP, lowering debt interest and building resilience to tackle future challenges effectively. We are not out of the woods yet, as the noble Lord, Lord Newby, said. There are still concerns on the international horizon, especially in the eurozone, and we have some huge challenges at home. Despite cutting the deficit over the past five years, it remains too high and productivity remains too low, whatever reservations we may have about how the figures are calculated. This Government are tackling this through our productivity plan, which will be published before the Budget, and our plans for a northern powerhouse. As the noble Lord, Lord Bilimoria, said, we are lucky to have my noble friend Lord O’Neill, who is our own northern powerhouse, here to tackle the issue.
Our trade with emerging markets has improved markedly but we are still too reliant on slow-growing markets in Europe. Business investment, which is so critical to improving productivity, has picked up but not by enough. While we have achieved remarkable success in creating jobs and growth, this is still uneven across the country and is reliant on too few sectors. I agree with the noble Lord, Lord Bilimoria, that enterprise, education, R&D and the engine of SMEs are critical to growth, although I do not agree with his view of the patent box, which I think has been a very important innovation.
The biggest theme of our debate has been the challenge and the opportunity of productivity. My noble friend Lady Wheatcroft talked about PIES but PROD is the abbreviation of productivity and should be the message to all parts of government and Whitehall:
to be prodded to work with collective focus on productivity; for all parts of business to be more ambitious; and for our citizens and employees to prod themselves to achieve their potential. As my noble friend Lord O’Neill set out, our productivity is 17% below the G7 average. This Government will tackle this through our productivity plan, which will be published before the Budget.
To improve our productivity, we need to improve our infrastructure, as the noble Lord, Lord Teverson, said; we need to rebalance the economy and build the northern powerhouse, as the noble Lords, Lord Clement-Jones and Lord Shutt of Greetland, said; and we need to ensure better housing supply policy, as the noble Lord, Lord Newby, the noble Earl, Lord Arran, and my noble friend Lord Horam said, and good progress is being made, with starts at their highest level since 2007.
We need to expand apprenticeships, as the noble Lord, Lord Aberdare, said, and will be delivering 3 million more over the next five years. We need to reduce the burden of regulation on business, as my noble friend Lady Wheatcroft noted, and we have a new Business Secretary who is very well placed to do just that. We also need to get more women into the workforce, as the noble Baroness, Lady Wall, said, and provide better incentives for long-term investment. I listened to the noble Lords, Lord Reid, Lord Haskel and Lord Desai, on the measurement of productivity. As my noble friend Lord O’Neill said, there are measurement issues that need to be looked at.
The noble Baroness, Lady Kramer, and the noble Lord, Lord Skidelsky, raised concerns about fairness. Inequality, as measured by the Gini coefficient, is lower than in 2010-11 and lower than the pre-recession level of 2007-08.
The noble Baroness, Lady Kramer, also asked about migration and full employment. The Government value the contribution of highly skilled migrants. However, we will also take action to cut down on migrants who undercut local workers, by denying them access to in-work benefits. We will also ensure that our strategy does not close off UK business to the skilled experts that it requires.
I thank the noble Baroness, Lady Liddell, for championing the tourism sector. I agree with her, and with the noble Lords, Lord German and Lord Clement-Jones, that this is a hugely important service industry which brings jobs to the whole of the UK. DCMS has done a good job of ensuring that this importance is recognised across government. We work closely with BIS to promote key sectors including tourism, the digital economy, the creative industries—another global success story, and now 5% of the UK economy—and, of course, sport. We now have joint Ministers across both departments, of which I am honoured to be one.
The Government are committed to seeing more women on the boards of top UK companies. We have made excellent progress but there is more to do. FTSE companies are on track to reach the 25% target set by the noble Lord, Lord Davies of Abersoch, by 2015—but, like the noble Baroness, Lady Wall, I believe passionately that a pipeline of talented women is crucial to success.
As the new Minister in BIS for governance, and therefore for women on boards, I will have a chance to help to tackle this. We are also committed to ensuring that there are more women in STEM and I thank the noble Baroness for her contribution. BIS initiated a programme of work to understand these issues and take action. This is being jointly led by the Royal Society and the Royal Academy of Engineering.
I thank my noble friend Lord Leigh for raising points about “covenant-light”, entrepreneurs’ relief and debt subsidy. I have met him separately and will ensure that these points are closely considered within BIS and the Treasury.
Several noble Lords raised points relating to EU renegotiation. There will be a debate in the other place next Tuesday and I am sure that Members will raise similar issues. I will ensure that the points made today are brought to the attention of the Ministers concerned. Of course, the results of renegotiation will be in the public domain and will be discussed and debated very widely.
Turning to the trade union Bill, I fear that there are those here who believe that our desire for such a Bill is born out of some dark intent. The noble Lords, Lord Mendelsohn and Lord Monks, hinted at this. This is quite wrong. Rather, it is our ambition to become the most prosperous economy in the world. That means we must ensure that people are not adversely affected by little-supported strikes which disrupt important public services. I was glad to have my noble friend Lord Leigh’s support on this matter. We will require that in the key health, education, fire and transport sectors, 40% of those entitled to vote must support strike action for it to be legitimate. We will also tackle the intimidation of non-striking workers during a strike, introduce time limits on a mandate for a strike following a ballot, and make changes to the role of the certification officer. Strikes can put lives at risk, prevent people getting to work and earning a living and prevent businesses managing their workforces effectively. As noble Lords will know, I say that as someone who comes from a business which had excellent relations with the trade unions—USDAW in that particular case. I also pay tribute to the work of the noble Baroness, Lady Donaghy, with ACAS and reiterate the important role that ACAS plays.
Another theme has been the importance of skills, digital skills in particular, which was rightly emphasised by the noble Lord, Lord Davies of Oldham. Ensuring that business has access to a highly skilled workforce is also critical for generating growth and enhancing productivity. Over the next five years, we will deliver 3 million new apprenticeships and ensure that they deliver the skills that employers need for growth. We propose to introduce a new duty on government to report annually on progress against the 3 million commitment, which I believe the noble Lord, Lord Macdonald, will support from the Benches opposite. I assure him that the Government are working hard with large and small companies, through our reforms, to grow the all-age apprenticeship programmes.
Our apprenticeship reforms are focused on employer-designed standards and robust assessment processes, and will ensure that apprenticeships become increasingly attractive to all sizes of employer, which is vital.
Apprenticeships are no longer confined to the manufacturing sector. You can now become qualified in the accountancy and legal professions through them, and we will promote the development of apprenticeships in all sectors and for all ages. We will also increase apprenticeships across Whitehall and its agencies so that the public sector is leading the way, and we will work with schools to ensure that apprenticeship options are more fully incorporated into careers advice.
Several noble Lords underlined the importance of the Select Committee report, Make or Break: The UK’s Digital Future. I very much look forward to debating that report and taking some of your Lordships’ ideas further, but I can say today that nine standards have been developed for digital since 2014 and that we have digital degree apprenticeships and, of course, the National College for Digital Skills, so progress is being made.
Latest figures for apprenticeships in the construction sector, which was a concern of the noble Lord, Lord Macdonald, have shown an increase of 16% from 2012-13 to 2013-14. There were more than 60,000 apprenticeship starts in engineering, which, again, is encouraging. He will be glad to know that, in 2013-14, 52% of total apprentices were women.
I turn now to enterprise and the enterprise Bill. This Government have an ambition for our small and medium-sized enterprises: to make Britain the best place in the world to start and grow a business. The enterprise Bill seeks to address the critical issues facing business growth. The first is late payment, an issue that affects small and medium-sized businesses in particular, which were owed £32.4 billion in January this year, compared to the £39 billion mentioned by the noble Lord, Lord Cotter—that perhaps reflects some response to the letters that we have sent, although I cannot be sure. On average, small businesses are still owed nearly £32,000.
We have already legislated through the Small Business, Enterprise and Employment Act 2015. Using those powers, we will now introduce a new requirement for the UK’s largest companies to report on their payment practices and policies. The enterprise Bill will establish new measures, including a new small business conciliation service to mediate in disputes between small and large businesses, especially over late payment, thereby avoiding the need for expensive litigation. I was glad to hear of the support that the noble Lord, Lord Mendelsohn, hopes to be able to give on this important matter.
My noble friend Lady Noakes asked why we needed legislation at all. Clearly, the Small Business, Enterprise and Employment Act was a landmark piece of legislation to help small business, but the measures in the new Bill will build on that by making sure that we remove another £10 billion of red tape. I hope that our work on enforcement will also be welcome to the noble Earl, Lord Kinnoull.
On the tax lock, which several noble Lords mentioned, these are important promises to working families, which we believe that it is right to put on the statute book. The noble Lord, Lord Northbrook, rightly highlighted the importance of lower, simpler taxes. To pick up the point made by the noble Lord, Lord Watson, we have a £5 billion target for reducing tax evasion in this Parliament, which I hope will be welcome.
Another area that can stifle small business growth is excessive regulation. We have an ambitious agenda, and the cost of regulation fell by £10 billion over the last Parliament. We intend to deliver a further £10 billion of savings over the coming five years. The job is not done; many businesses believe that how regulation is enforced and the paperwork that goes with it can cause more unnecessary difficulties than the law itself. The Government believe that we should now expand the framework set out in the small business Act to ensure that the actions of regulators are also covered.
With an unprecedented £70 billion of capital investment over the next five years, transport will account for nearly three-quarters of our infrastructure budget, and 22 out of the Government’s top projects. The Queen’s Speech reiterated the Government’s commitment to legislate for and start building high-speed rail links. My noble friend Lord O’Neill referred to our plans to deliver the full network of HS2 and how that will connect eight of Britain’s 10 largest cities. The Chancellor has already committed alongside this to ramp up investments in roads, give Britain the fastest broadband and the most competitive telecoms and take the decision on increasing airport capacity in the south-east once the Airports Commission’s final recommendations are published, which will be shortly. The noble Lord, Lord Harrison, will also be glad to know of the £1 billion airport redevelopment in Manchester.
The noble Lord, Lord Teverson, asked about the cycling and walking strategy. The Infrastructure Act contains a section giving the Secretary of State power to set such a strategy. Once it is commenced, the Secretary of State will be under a duty to set one up as soon as is reasonably practical. My noble friend Lord Attlee rightly raised concerns about cycle safety, and we are trying to address that.
I empathise with the noble Earl, Lord Arran, on the subject of the A303. I have been waiting for improvements to it all my life, and it is great to see them in the plan. We expect to start public consultation on the scheme in 2017.
The Government want to make Britain the technology centre of Europe, establishing more catapult centres, mentioned by several noble Lords. We are providing £800 million in 2015-16 for innovation activities through Innovate UK and other world-renowned institutions. They will keep a beady eye on how that is administered.
To make sure that the UK retains its position as the world’s best IP regime, we will also focus on a number of measures including: improving our rights-granting services; reforming the law to improve protection for businesses; striving to improve international patent systems; and educating businesses and consumers about IP. The consultation on Section 73 is continuing. The noble Lord, Lord Clement-Jones, is right to say that enforcement is incredibly important. It is great that we have managed to extend the life of PIPCU, and we are looking at future options for funding. He will also be very glad to know that we have used Section 97A to block access to websites alleged to host 10 million infringing e-books.
Building on the successes of the last Parliament, the Government have set out key measures, which will ensure that we continue to promote jobs and
balanced growth in the UK. We have put the country back on a stronger financial foundation, although we have still more to do. We are putting the interests of business first and dismantling bureaucracy to make this the best place in the world to start up and run a business.
I end by thanking the House for a stimulating debate and for demonstrating economy and business nous by finishing business well ahead of schedule.
Motion agreed nemine dissentiente, and the Lord Chamberlain was ordered to present the Address to Her Majesty.