That an humble Address be presented to His Majesty as follows:
“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament”.
My Lords, it is a great honour to open this adjourned debate on His Majesty’s most gracious Speech. Today’s debate will focus on economic growth, infrastructure and employment, but before I turn to today’s debate I should say that I believe it is customary for new Members of your Lordships’ House to offer some personal remarks.
I start by saying how grateful I am to the many noble Lords of all sides and the wonderful and patient staff here who have already made me feel most welcome. I also thank my supporters for my introduction last week: the Minister, my noble friend Lady Jones of Whitchurch, and the noble Baroness, Lady Manningham-Buller, who has provided advice and support to me on more than one occasion.
My family comes from Cornwall, and I grew up in a small hamlet called Greenbottom, near Truro. My mother came from the Isles of Scilly. However, when thinking about the name I should bear when taking my seat on these red Benches, I decided that perhaps neither Greenbottom nor Scilly were quite right. I plumped for Balham. Some of your Lordships of a certain vintage will recognise it as the famous gateway to the south.
I am a doctor and scientist and have worked in the NHS, academia, industry and government. It is an enormous pleasure and privilege now to be joining your Lordships’ House with its reputation for expertise and wisdom. I am at heart a scientist. Karl Popper said:
“Science may be described as the art of systematic oversimplification”.
He reminded us that
“Knowledge can only be finite, while our ignorance must necessarily be infinite”,
while
“ignorance is not the absence of knowledge, but the refusal to acquire it”.
My Lords, I welcome the noble Lord, Lord Vallance, to the Dispatch Box and congratulate him on his maiden speech. Almost all of us have made a maiden speech in this House and some of us have also spoken from the Dispatch Box, but few of us have made our maiden speeches at the Dispatch Box. It is a nerve-wracking thing to do and those who have done it will have been impressed by the noble Lord’s coolness and humour—what we old Brussels hands would call his sang-froid.
The noble Lord, Lord Vallance, was a reassuring presence on our television screens during the pandemic. He was calm, informed and, not least, neutral and impartial. Of course, he has now given up that neutrality and impartiality, becoming the latest in a long line of public officials to join Labour—what I believe is known in Whitehall as “doing a Sue Gray”. Let me say that over the seven years that I spent in government, covering three departments, I worked with many fantastic officials whose neutrality I never had cause to doubt. I know from talking to many of these officials that many senior civil servants are uneasy, to put it mildly, about how easily some of their ex-colleagues become party political the moment they leave the service—although, in fairness, not Sue Gray, who became party political before she left the Civil Service.
I seem to remember the noble Lord, as Chief Scientific Adviser, recommending that Britain restore lockdown measures in December 2021, a call echoed at the time by the Labour Party. Luckily, those calls were ignored and in the event SAGE’s alarmist predictions of up to 6,000 more Covid deaths per day were shown to be utter nonsense. It was a moment that comes very rarely in politics, when two alternative policies can be tested against events. One of them was shown to be nonsense. There will doubtless be times when we revisit these moments across the Dispatch Box. For now, I welcome him and wish him well in the important job that he is undertaking on behalf of the Government.
My Lords, let me to this unusually full gracious Speech—bulging, we might almost call it—which contained a great many measures. Your Lordships are going to be kept very busy indeed because, given the size of the Government’s majority in the other place, I am not sure that there will be much critical scrutiny happening. However, like everyone else in this House, I am sure, I really do want Britain to succeed. That means that we want the Government to succeed. We on these Benches will support any measure that advances the goals which we share—above all, the Government’s stated priority of boosting economic growth.
We know what brings growth. It is sound money—I was pleased to hear the noble Lord’s commitment to sound finance—a balanced budget, competitive taxes, a strong private sector, light but effective regulations, public services that deliver for those who need them, a world-class education system and free trade. Almost all of us can agree on those things, but delivering them means making tough choices rather than just talking about tough choices. Only yesterday, we heard the new Chancellor hinting that she would roll over at the first signs of militancy from the public sector trade unions. That “tough choices” rhetoric lasted all of a fortnight. Labour has promised not to raise taxes on working people, and that is good. Let us see how it works out in practice. The pandemic, even without the extra lockdown, pushed taxes to the limit. Bringing them down is a vital part of any growth strategy.
It is worth observing in passing that all taxes are, one way or another, paid by working people. A corporation no more pays corporation tax than your TV set pays its own licence fee. A bank no more pays the bank levy than your house pays council tax. All taxes are paid by human beings—whether directly or as employees, suppliers or customers. When taxes on savings or inheritance go up, the money, ultimately, always comes from working people.
Can we please be spared the tired cliché of, “Oh, dear, we’ve looked at the books, and things are worse than we thought”? It is worth reminding ourselves of the figures; the last time Labour left office, in 2010, employment was at 70.4%; now, when Labour returns, the figure has risen to 74.4%. Labour bequeathed the Conservatives 7.8% unemployment; the Conservatives are bequeathing Labour 4.4%. When my party took over, the deficit stood at 10.3%; as we leave, despite the pandemic and the energy crisis, it is 3.1%. Let us please not have any nonsense about uniquely difficult legacies or about things being worse than expected. According to the OECD, which has just upgraded its growth predictions, things are better than expected and Britain is outperforming every major European economy.
—about worthwhile reforms and I am delighted to see the audit reform and corporate governance Bill in the gracious Speech. I oversaw a development of these proposals when I was a BEIS Minister but, unfortunately, I failed at the time to persuade No. 10 that they mattered enough to make the legislative programme. It is good to see them back and I welcome them.
The lockdown is now three years ago and the global financial crisis is but a distant memory. The last of post-Covid inflation has ended, the deficit is falling, we are close to full employment and there is every reason to be optimistic about the future. If Labour can deliver on what it promised, grow the economy, tread more lightly and, over time, bring taxes down, it will have the support of this Front Bench.
My Lords, it is with great pleasure that I welcome the Ministers to their new positions and congratulate the noble Lord, Lord Vallance, on his excellent maiden speech. I have to say that I am having to readjust; I spent so long looking opposite and finding the noble Lord, Lord Callanan, arguing. However, it is good to see that, in crossing the Chamber, he has lost none of his customary charm.
After years of an out-of-touch Conservative Government who took people for granted and left so many things needing to be done, this King’s Speech is very much being portrayed by the Government as a start to putting things right. The people who voted either Labour or Liberal Democrat crave these changes, so we welcome the intentions articulated in this King’s Speech and agree that the commitment to uniting the country is vital.
Given the paradoxically marginal nature of the Government’s overwhelming majority, unification should come, wherever possible, by reaching across the aisles. We have to reach agreement and work for the stability that we all crave. These Benches will work with the Government where we can to help deliver the changes that our voters so eloquently articulated, in that election.
I will focus briefly on stability, investment, infrastructure and skills, and leave it to others to talk about the important need to better facilitate trade with the European Union, and some technology issues.
The Government have quite rightly made growth their primary objective, and recognise that stability is needed to create the ground on which this can flourish. With the Budget Responsibility Bill, the Government are seeking to anchor economic responsibility into law. This is the anti-Liz Truss Bill and we look forward to the debate when it comes.
However, stability is more than just a law. Stability is projected by how the Government behave, how they make decisions and how they co-operate in the public and private spheres. That is where stability will come, so we very much welcome the news of a statutory industrial strategy council to oversee industrial policy.
My Lords, I thank the noble Lord, Lord Fox, and warmly welcome the noble Lord, Lord Vallance, to this House and congratulate him on his brilliant maiden speech. I apologise for my husky voice, by the way—there is nothing I can do about it.
It is encouraging to see the new Government putting sustained economic growth at the top of the agenda. Not many would disagree, but the key issue will be how the Government go about putting their objectives into effect, and how they respond when things do not work according to plan. I will explore this in two contexts: how do we strengthen the attractiveness of the UK as an investment target, and how do we reinforce the appetite of UK business to invest and grow?
International investor confidence in the UK has traditionally been high, because we were seen as sound and stable, both fiscally and constitutionally. This has taken a bit of a shaking in recent years. Proposals in the King’s Speech for fiscal discipline will help rebuild this in large part, provided that the Government are robust in maintaining that discipline when challenges come—as come they will, and the markets will be watching. We also need to show that the UK has a strong sense of shared responsibility across the political divide, and a stable relationship between the courts and government, which again has lapsed a bit recently.
I turn to UK business and its confidence to invest and grow. A great deal will depend on businesses’ assessment of the risk in doing so over the medium term. A planned five-year stability in the corporation tax rates will help provide confidence, provided this apparent stability is not undermined by hidden taxes on business, such as might occur as part of the planned business rates reform. Equally, a shared industrial strategy can help provide business with a stable planning and decision-making background, provided that the industrial strategy council does not turn out to be a way of cramming government and trade union views down on business. It is also very important that it is not seen as a way of taking somewhat out-of-date solutions, such as nationalisation, and bringing them back into effect. The Government really need to not get hung up on any of these outdated solutions, and to be agile and quick to adapt if they are not working.
4:20 pm
The Lord Bishop of Leeds
My Lords, I am not an economist, but I care deeply about the economy. I shall limit myself to a couple of observations, and I am sure that I can save a few minutes in the length of the debate.
First, I welcome the Minister and thank him for his illuminating and articulate speech. I admire the new Government’s ambitions, but I worry a bit that there is too much. Holding all this together in a coherent development framework will be challenging beyond words, but I wish the Government well in doing it.
I want to plead for honesty from the Government and a good communication strategy to explain to the rest of us in the country who are not economists how all this is going to be rolled out. When it fails—elements will fail for a host of reasons, not usually intentional—the Government must trust the electorate and tell us the truth. When timelines do not work and get delayed, trust us and tell us the truth so that we know what is going on. We need to be treated like adults. I understand the need to adhere to the fiscal rules, but the Government choose what those rules are, so if they have implications for the rest of us, that needs to be explained clearly in language that can be understood by people like me.
What I am glad about in the gracious Speech is that we seem to have a programme that takes long-termism seriously. I hope that can be stayed with during this very ambitious programme, where the immediate will sometimes compromise the longer term. We need long-term thinking. I speak as someone who lives in the north of England and who has to use transport north and south but also east and west. The problems that we have with rail were mentioned earlier. The amount of money that has been invested in London and the south is light years above what has been invested in the north so far. I wonder whether the northern powerhouse is turning into a northern small battery, but that is to be seen.
There are a number of issues in relation to employment that really impact us in the north. Universities—I am familiar with a number in west Yorkshire—are now struggling and making people redundant, because we do not have students coming in from abroad. I know that raises questions about the models for investing in students, but we can talk about creating employment at the same time as we are losing employment in significant areas. One of the factors involved in that is access to good communications, especially rail and road. I came to this House 10 years ago, and I remember saying at the time that only way effectively you can get from east to west and from west to east is along one road, the M62. There is nothing else. What happens to the north-east when the A66 is snowed under, I suspect even in the summer? The rail links are appalling, whatever investment has gone in. I now have to get my PA to book trains north-south to get down here, knowing that if my train is cancelled I can get the one before or the one after and still get here for what I need to be here for. That is terrible in a country like this.
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However, in my time as the Government Chief Scientific Adviser I found that the scientist’s approach does not always align perfectly with that of others. A scientist will often be pleased to find that the results of new experiments showed that what they held to be true was in fact wrong and the world is not quite as they thought it to be. This process of discovery and self-correction is, of course, at the very heart of the scientific method.
I discovered, however, a little philosophical difference. In some political and media circles, changes resulting from new evidence may not always be so readily welcomed. Indeed, they are instead that most dreaded of things: a U-turn. I look forward to welcoming changes based on scientific findings, advances in technology and innovation.
I shall turn to today’s debate, but first I must extend a warm welcome on behalf of the whole Chamber to my noble friend Lord Timpson and my noble and learned friend Lord Hermer, who have been introduced today, as well as to the noble Lord, Lord Petitgas, who will give his maiden speech today and I hope share some of the invaluable business experience he brings to your Lordships’ House. Your Lordships will also hear from my noble friend Lord Livermore, who will wind up this evening. With his deep experience, and the expertise and insight in evidence on all sides of the Chamber, I look forward to the debate ahead.
The programme of legislation put forward in His Majesty’s gracious Speech is, in essence, about potential and how to realise it. Noble Lords will know that talent, energy and ambition are found in abundance right across the four nations of our union, from the Isles of Scilly to the Shetlands. However, they will also know that, far too often, our communities are unfairly held back by an economy that does not deliver for them.
Decades of low growth and lower investment mean that we risk falling behind international competitors, and it is hard-working people who will pay the price. That is why, as we set about the work of rebuilding Britain brick by brick, innovation by innovation, we have made growth our national mission. Without growth, we cannot answer the profound challenges that our country faces. It is growth that will provide the good jobs that hard-working people deserve, improve the public services they depend on and make people better off, and it is growth that the measures set out in His Majesty’s gracious Speech will deliver.
That plan starts with economic stability. We have been clear that we will not risk public trust or market credibility in the pursuit of political convenience. To put it simply, that means no more unfunded spending commitments. Each of the measures set out in His Majesty’s gracious Speech has sound money as its bedrock. Every decision will be shaped by strong fiscal rules designed to deliver a balanced budget and drive down the national debt.
The Budget Responsibility Bill will enshrine that commitment—the fiscal lock—in law, ensuring that every significant change to tax and spending is subject to independent assessment from the OBR. My noble friend Lord Livermore will have more to say on this later. Stability is where we start, but your Lordships should not take that stability to signal a lack of ambition. Long-term growth—growth that involves every person and every community, in a strategic partnership with business—requires change, and His Majesty’s gracious Speech shows that we are ready to turn the page.
Since the global financial crisis, the United Kingdom has been plagued by low productivity. Today, real average weekly earnings have only just returned to 2008 levels. Millions remain stuck in insecure work, and millions more are without work at all; the number of workers inactive due to long-term sickness is close to an historic high. These headline statistics also hide insidious inequalities. The national gender pay gap stands at over 14%, and a quarter of reported sexual harassment takes place at work. This is patently appalling. I am sure noble Lords will agree that, in modern Britain, it cannot continue.
Work must pay, no matter who you are. The employment rights Bill is born from that belief. It will empower British people with workplace rights that are fit for a modern economy by helping more people to stay in work—and ensuring that work puts more money in their pockets. It will not just grow the economy but will ensure that the benefits of growth are felt by all.
A modern workplace is necessary for sustainable growth but it is not sufficient. That brings me to infrastructure. Tomorrow’s economy brings demands, from laboratories and gigafactories to large-scale computers and digital infrastructure, and of course the infrastructure requirements for clean energy. Yet, from roads to railways and reservoirs, Britain’s basic infrastructure is too often the stuff of yesterday. This is not for want of trying. Many businesses have told us that they are ready to build, but burdensome planning regulations and a fragmented investment landscape prevent them from doing so.
In our cities, the sight of brownfield land sitting unused and abandoned is all too common. This House may recall the tale of a £2.5 billion data centre blocked for spoiling the views over the M25. Far be it from me to take a view on the aesthetic merits of one of Britain’s great scenic motorways, but I am confident that we can all agree on one thing: confused infrastructure and investment policies are a brake on Britain’s growth. To kick-start our economic engine, we must remove that brake. In His Majesty’s Gracious speech, we have taken our first steps to doing that.
By accelerating the planning process for housing and streamlining the delivery of major infrastructure projects, the planning and infrastructure Bill will unlock much-needed development at an unprecedented speed and scale. We will also consider how we can remove blocks to the growth of our data-centre sector—the largest in Europe—including changes to planning rules, designating the sector as critical national infrastructure, and introducing a stable regulatory environment to improve security and resilience.
Infrastructure will be a driving force behind our industrial strategy. Guided by the Industrial Strategy Council, which we will put on a statutory footing, this long-term plan will provide business and investors with the certainty and stability they need to invest and grow.
The national wealth fund is anchored in those same values. It will align the UK Infrastructure Bank and the British Business Bank under a permanent institution that provides a coherent offer for business and a compelling proposition for investors. By working closely with regional mayors, the fund will strategically deploy public capital to deliver long-term growth and prosperity for communities in every corner of the country. By mobilising billions more in private capital, its impact will be transformative, creating thousands of good jobs for British people in the industries of the future.
Science and technology can improve the lives and life chances of our citizens by driving economic growth, improving public services, and providing resilience and security. Government has a vital role to play in making that possible. It is only by realising the full potential of technological innovation that Britain’s businesses will succeed, Britain’s public services will modernise and the British people can prosper. Our task therefore is to accelerate innovation, investment and productivity as essential elements of Britain’s industrial strategy. Our approach combines discovery and delivery, opportunity and security.
The strength of Britain’s research sector already provides us with a clear competitive advantage. These islands are home to four of the top 10 universities in the world. We have many more world-class institutions that create the knowledge we need for the future. They act as catalysts and anchors for innovative start-ups and scale-ups. The phrase “Silicon Fen” may lack a certain something, but the story it points to is remarkable. Last year, Cambridge was the most intensive science and tech cluster in the world. It is not just Cambridge: from small satellite manufacturing in Glasgow to compound semiconductors in south Wales, diverse science and tech clusters are creating opportunities for communities up and down the country.
Yet, in each one, the same challenges put prosperity in peril. A lack of laboratory space is stifling the expansion of a life sciences sector which, until now, has been one of our great industrial success stories, employing over 300,000 people and generating over £100 billion in turnover. At the same time, firms are struggling to access the capital they need to grow, and rigid regulation prevents them bringing innovative products to market. If we are to face up to these challenges and provide opportunities for these firms to grow a more productive and prosperous economy, improve our public services and make people better off, we need change.
Once again, the starting point for change is stability. We will scrap short-term funding cycles for certain types of R&D activity, replacing them with 10-year budgets that will provide researchers with an opportunity to form meaningful partnerships with business and to take a long-term view—partnerships that support the cutting-edge research and development needed to remain at the forefront of global innovation.
The economy will not be the only beneficiary, because innovation is an enabler for every one of our national missions. Take artificial intelligence. Today, the UK ranks third in the world for AI talent, start-ups and inward investment. If you go to the so-called Knowledge Quarter—or, as some people call it, the new square mile—in King’s Cross, you can see what those statistics look like in reality. Sandwiched between the station and the Francis Crick Institute—Europe’s largest biomedical laboratory—a new crop of companies is growing out of the coal drops from which Britain’s first Industrial Revolution was born. Goldman Sachs estimates that AI could double the rate of growth since 2010—but that is just part of the picture. Many of the businesses there are harnessing the power of AI to discover solutions to some of our most pressing social and environmental problems.
This is not some distant future. Noble Lords will know that industry is already feeling the impact of the rapid development of large language models. Technologies such AlphaFold, developed by DeepMind, have shown the transformative effect that AI can have. By predicting the shape of almost every protein in the human body, AlphaFold has ushered in a step change in the understanding of disease and the measures we need to tackle it. We can expect to see more examples like this. This is not an opportunity that we can afford to miss. From breast cancer screening and stroke detection to fraud prevention and personalised education, this Government are committed to harnessing the power of AI to transform how we deliver public services and boost living standards right across the country.
To do this, we must champion our domestic science and tech sector; and, in a country where 25% of people struggle to engage with the internet and digital devices and 2.1 million people live largely offline, we must remain relentlessly focused on driving up digital skills to ensure that the opportunities of our modern economy are open to all.
We must also lead by example by delivering modern digital government that promotes the responsible and innovative use of technologies, with public services that are more productive, less time-consuming and, frankly, more in tune with how we live our lives. The public sector must walk the walk as well as talk the talk. My department, as the centre for digital expertise and delivery, has been tasked with making that happen.
None of that, of course, is possible without data. We have committed to creating a national data library that will make it easier to access data, deliver data-driven public services, support research and create opportunities for economic growth, while maintaining strong safeguards. These principles also underpin the new digital information and smart data Bill. Putting digital verification schemes, the National Underground Asset Register and smart data schemes on a statutory footing will accelerate research, innovation, investment and productivity. Improved data sharing and standards will make public services more efficient and accessible. In all of this, we will prioritise protecting people’s data. We will modernise the Information Commissioner’s Office and give it new, stronger powers; and we will introduce reforms to data laws to address the uncertainty that prevents the safe development and deployment of new technologies.
We cannot seize the opportunities of innovation without getting regulation right. Regulators must be equipped to deal with the pace at which new technologies are developing, particularly when they cut across traditional industries and sectors, as they increasingly do. In 2022, more than two-fifths of businesses said that regulation was an obstacle to success. That is why we are establishing a regulatory innovation office. By enhancing regulatory innovation to update rules, speed up approval timelines and co-ordinate issues that span existing boundaries, the office will transform the journey that new technologies take—out of the lab, on to the market and into our lives.
Trust is a central part of this journey. That is why we will bring forward highly targeted legislation to introduce binding regulations on the handful of companies that are developing the most powerful AI models. Ending the regulatory uncertainty for AI in the UK will strengthen public trust, enhance security and boost business confidence.
Nowhere are security risks more apparent than in cyberattacks. In light of last week’s global IT outage caused by a failed software update, ensuring that our digital systems are safe and resilient feels more important than ever. In the last 18 months, we have seen devastating cyberattacks at the Ministry of Defence, the Royal Mail and the British Library. A recent attack on the NHS resulted in thousands of appointments and elective procedures being postponed, impacting health provision right across the capital. The CEO of our National Cyber Security Centre, Felicity Oswald, said earlier this year that these are risks that we cannot afford to ignore. I am sure noble Lords will agree. To reduce the damage from further attacks, we must urgently update our cybersecurity regulations. That is what the cyber security and resilience Bill will do, strengthening our defences and ensuring that digital services that are more essential than ever are protected.
His Majesty’s gracious Speech has set out an ambitious long-term strategy to unlock Britain’s potential. To deliver sustained growth that will bring prosperity and opportunity to every British person we must build strong and secure foundations anchored in an unwavering commitment to fiscal responsibility and rooted in advances in science and technology. With those foundations, the work of immediate change can begin. From employment rights and regulation to infrastructure and investment, our reforms will rebuild Britain’s economy. By combining discovery and delivery, opportunity and security, we will fix our broken public services and make lives better for British people.
The question before us is: will the measures flagged up in the King’s Speech lift burdens from our productive sector or, indeed, pile them higher? Let us consider some of them; first, the Budget Responsibility Bill. The Conservative Government established the Office for Budget Responsibility in 2010 after seeing what happens when borrowing is pushed up. Its job was to provide independent analysis of the UK’s public finances; at the time, Gordon Brown had left us with a deficit forecast to rise to 11.8%. Now, to repeat, the deficit is 4.4% and is forecast to fall to 1.2% in five years’ time. But is it really for quangos to determine our fiscal policy? Is it not, in the end, the job of our elected colleagues, primarily in another place? There needs to be a balance, and I am not sure that granting ever more powers to the OBR gets that balance right. After all, who holds the OBR to account when, as frequently happens, it gets its advice wrong? I have no doubt that criticisms will be made of fiscal policy in the years ahead, but they should be made, in the first instance, in this Parliament.
As for the national wealth fund Bill, its name skates fairly close to breaking the Trade Descriptions Act. It does not create a sovereign wealth fund. Indeed, it is far from clear what it will do that is not already covered by the UK Infrastructure Bank or the British Business Bank that were both established and capitalised by the previous Government, and which are up and running and already investing in the green industries of tomorrow.
I was delighted to hear of the Government’s commitment to planning reform and new infrastructure, as we need both. This is not new: I was part of a ministerial working group in the previous Government trying to work on reducing those delays. I hope noble Lords opposite will not mind if I share one observation based on that experience: the only way to get things built quickly is to hack through the thickets of, first, judicial review and, secondly, excessive environmental regulation. We will see what Labour makes of those tough choices.
Taking tough decisions is not the same thing as talking about those tough decisions. Noble Lords opposite will remember opposing an amendment to the then Levelling-up and Regeneration Bill that would have unlocked 100,000 new homes, and Labour so far has been silent on whether it will use the powers in the Levelling-up and Regeneration Act to reform those bureaucratic EU legacy laws, environmental impact assessments and strategic environmental assessments. If it does, we will, of course, support it, but I predict that unless these particularly difficult issues are tackled—and they are difficult—we will not see infrastructure being built any faster.
The noble Lord referred to the employment rights Bill. I understand that some trade unions think that they hold IOUs for the financial largesse bestowed on Labour to pay for the election campaign, but the most basic employment right is the right to be employed in the first place, something that is ensured by our flexible labour laws.
The Blair Government understood this, which is why they opposed the EU’s attempts at the time to enforce job-destroying legislation on the UK. When I was an MEP, I was happy to work alongside the then Labour Ministers and Government to mitigate some of the worst effects. How sad it is to see Britain, outside the EU, about to adopt unilaterally that which the Blair Government opposed when we were still a member of the EU.
Businesses are already sounding alarm bells, warning against French-style trade union laws. Alex Baldock, the head of Currys, Matthew Percival, a director at the CBI, Rupert Soames, its president, and Archie Norman, chairman of M&S, are among the business leaders warning of unintended consequences and a loss of investment if we go ahead. There is no point in having generous workers’ rights if we have fewer and fewer workers in the first place. If we adopt French-style labour laws, nobody should be at all surprised if we end up with French levels of unemployment.
But I promised to be positive—
At the same time, this King’s Speech tacks very much towards bigger government, with state intervention on energy, transport and planning. As I am sure Ministers opposite recognise, success will depend on getting the balance of government involvement right because, in the end, it is private investment that will deliver the growth that we need. For all the potential money in the national wealth fund, meaningful growth will come only if private investment flows. Unlocking that flow of investment is absolutely crucial.
Given we already have a UK Infrastructure Bank and the British Business Bank, and the Government say that they will start by operating through one of these anyway, I would be grateful if the Minister can explain why a third institution is needed to focus what is going on. Can the Minister say what, typically, will the national wealth fund be used for? How will its investments be decided? Will decisions be purely commercial or will strategic issues be included? Will the fund take stakes in businesses? How will those stakes be used—passively or actively?
As we have heard, infrastructure is crucial to delivering growth. To date, much of the commentary around the planning and infrastructure Bill has focused on housing. Of course housing is vital, but when it comes to national productivity it is going to be transport, energy and digital infrastructure that will drive that productivity.
Past Governments have made similar, perhaps less ambitious, plans to tackle the infrastructure challenges we face, but inevitably there is a big time lag before things start to happen. For all the talk of shovel-ready projects, these are few and far between. Ironically, the one shovel-ready project with a proven positive effect on national productivity is the northern leg of HS2, which the Government seem to have decided not to revive. Perhaps the Minister can explain why.
On a wider point, the Government’s planning proposals will be challenging to put in place, and we believe that planning must properly involve in some way the communities it affects. The delivery of big infrastructure projects is also an issue, as I am sure all of us in your Lordships’ House note. It was surprising that the Government decided not to give the National Infrastructure Commission a statutory role in overseeing national projects. Can the Minister explain how the commission, the UK Infrastructure Bank and the national wealth fund will work together, first in the creation of the long-term plan that was discussed during Questions today and then to improve project delivery once these projects are undertaken?
Finally, I turn to skills. The central question I have on the whole government agenda is: for all the Government’s targets, who will lay the bricks, insulate the houses and bring the electricity grid into the modern era? The Skills England Bill seems to lack urgency. Can the Minister explain the timetable for the development of both a plan for skills in this country and its implementation? When will we see any effect from it on the actual workforce?
In coming from the cafeteria today I caught sight of the Prime Minister talking about a migration strategy around skills. It seems clear that, at least in the short term, a sector-based migration strategy will be needed. It would be helpful if the Minister could explain what the Prime Minister was talking about.
I have one other quick win for the Government: they could turn the apprenticeship levy into a wider, more flexible skills levy straight away. We do not need consultation. Everybody who comments on this knows that this is what needs to happen, so why not do it now, and start the process of retraining a broader group of people? There is money left over from the apprenticeship levy that is not being used for skills.
It remains for me only to repeat that uniting the country requires a broad approach to deliver both benefits and stability across our country. We on these Benches will engage positively in all the discussions from this King’s Speech and beyond to assist in delivering the stability that this country needs.
Some of the planned reforms may be more difficult to implement than is anticipated. Take the example of the reform of employment law; it would not be surprising if one unwanted result of these changes was a reluctance by employers to recruit because the new employment rights will make it harder for them to let staff go if the business finds itself in trouble. How agile and realistic will the Government be when they face these sorts of difficulties?
Finally, the Government have committed to speak honestly about the issues that this country faces. Are they being honest in the proposed changes to the defined pension rules? Most large UK pension funds have a global portfolio of investments; this spreads the risk and improves investment returns for pensioners. If these funds were pressured into investing a predetermined amount of their portfolio in the UK, this would be unlikely to represent an improvement for pension beneficiaries. In fact, let us be honest, it would probably provide something useful for the Government in their growth policy objectives, and put benefits to pensioners under threat. The Government will need to walk the talk when it comes to honesty and openness—they need to work on that very impressively.
If the new Government succeed in creating an effective partnership with UK business, where UK business feels heard and that its need for stability is understood and provided for, they will have achieved something really valuable and done much to build growth. If we manage to make the UK a more attractive investment target again, we will all benefit from that. I offer my best wishes to this new Government, and wish for their success in the national interest.
What about the issues we have with water? The failed experiment of the past 40 years, where pockets of individuals have benefited from much of our privatised utilities, needs to be addressed. I read the other day—I cannot remember the numbers—that the CEO and the CFO of Yorkshire Water have received more than £500,000 in bonuses. I work in a business that does not quite understand bonuses, because I do not get a salary, I get a stipend, but I always thought that a bonus was there to reward going beyond what you are employed to do. So why are people getting bonuses for abject failure where the money goes into the pockets of shareholders at the expense of consumers? This is a moral issue as well as an economic issue. I hope that the Government will address this as they go forward.
So I come back to where I began and say that I admire the ambition, but we have to be careful that we do not lose it as we go.