Queen’s Speech

Debate (4th Day)

Moved on Tuesday 10 May by

That an humble Address be presented to Her 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 was addressed to both Houses of Parliament”.

My Lords, I am grateful for the privilege of opening today’s debate on the Motion for an humble Address. Today, I shall outline the Government’s plans to support the economy, energy and the environment.

Covid-19 was an unprecedented crisis and, in response, this Government took unprecedented action, providing nearly £400 billion to protect lives and livelihoods from the pandemic’s economic impact. It is thanks to this decisive response that the economy was able to recover faster than expected. That resurgence was accompanied by a labour market that outperformed expectations, with unemployment returning to below its pre-pandemic rate. None the less, there are significant challenges ahead.

Pressure on global supply chains and elevated energy prices, as the world unlocks from the Covid-19 pandemic, had meant that the cost of living was already on the rise. And now the unprovoked invasion of Ukraine has further driven up energy prices for households. The Government are acutely aware of the pressure that people face right now. That is why we are providing support worth over £22 billion in this financial year to help people through these difficult times.

We are also mindful of our responsibility to secure the economy over the longer term. Our spending on public debt interest repayments has reached the point where it now exceeds the budget for schools. Clearly, this is unsustainable. That is why we have taken tough and responsible decisions to repair public finances and return them to a tenable path. As a result, our debt is now on track to fall in the next few years, freeing up greater fiscal firepower to respond to future shocks and build economic security. A responsible approach to our national debt is just one element of how this Government are safeguarding our future economic health and our national well-being.

The legislation we are debating today will also play a significant part in achieving those goals. These measures will support key sectors such as food and farming and financial services. They will shield people from rising energy prices and consumer rip-offs, while preventing workers paying the price of business failure. They will also protect the environment and speed our transition to a net-zero economy.

I turn first to the financial services and markets Bill. The UK’s financial services sector is one of the most open, innovative and dynamic in the world. It is not just an industry in its own right but the engine of our economy. It employs over 2.3 million people throughout the country and contributes £75 billion in tax revenue. It is therefore right that we act to secure our position as a global leader for the sector over the long term. Our departure from the European Union means that there is now an opportunity to better tailor our legislation to better suit our markets. In his speech at Mansion House last year, my right honourable friend the Chancellor set out our ambitious visions for an open, green and technologically advanced financial services sector that is globally competitive and acts in the interests of communities and citizens, creating jobs, supporting businesses and powering growth across all of the UK.

Could my noble friend tell the House how much extra revenue the Government are receiving in taxation as a result of the increases in oil and petrol prices?

My Lords, I know that the amount is substantial, but I do not have the particular figure to hand. However, I am sure my noble friend on the Front Bench can provide it to my noble friend when he concludes today’s debate.

I now turn to two Bills relating to agriculture, an industry that makes an important contribution to our economic and environmental health. The first is the genetic technology precision breeding Bill. Precision breeding describes a range of technologies, such as gene editing, which enable DNA to be edited much more efficiently and precisely than by current breeding techniques. Now we are outside the EU, we can adopt a more proportionate regulatory approach to the development and marketing of plants and animals produced through such technologies. Such techniques will enable us to grow crops that are more resilient to climate change and resistant to disease, boosting food security and reducing our reliance on pesticides. The UK is already home to world-leading research in this field, and these changes will unlock further innovations that will improve our food system’s sustainability and resilience and bring our approach in line with that of other major economies.

Finally, the kept animals Bill, which raises standards for pets, farmed animals and kept wild animals, will continue its passage in this Session as soon as parliamentary time allows. The Bill’s measures include action to tackle livestock worrying and bans on live exports for fattening and slaughter and on the keeping of primates as pets. It also tackles the cruel trade of puppy smuggling. In doing so, it delivers a key part of the Government’s Action Plan for Animal Welfare and important manifesto pledges.

These are difficult times for this country and the world, but the Bills I have outlined will play a big part in safeguarding our economy, securing key industries such as farming and financial services, and protecting our energy supply. I have no doubt that this proposed legislation will spark many substantive and insightful contributions today and in sessions to come, which I greatly look forward to hearing.

My Lords, I thank the Minister for her introduction to the gracious Speech and send our good wishes to the Queen. I also look forward with pleasure to the maiden speech of the right reverend Prelate the Bishop of St Edmundsbury and Ipswich, and to his contributions for many years to come.

This Queen’s Speech shows just how much the Government are out of touch with the issues that really matter to the people of this country. We know that what really concern people are the cost of living crisis, the huge rise in energy bills, lengthening NHS waiting lists and the impact of climate change on our future well-being. However, instead of a programme to address these very real concerns, the Government have chosen to pick fabricated fights to please a dwindling group of core supporters.

The fact is that the Government have presided over a low-growth economy for more than a decade. As a result, the Conservative Party has become the party of high taxes and low pay, and the latest national insurance increase means that millions will be taking home even less. We were already facing the scandal of over 1 million people regularly using food banks, and the Trussell Trust has reported a dramatic increase in demand following the scrapping of the £20 a week universal credit uplift. As a further reminder of how out of touch the Government are, we have MP Lee Anderson blaming a lack of cooking skills for the food poverty that millions of people are experiencing. Now, on top of the existing financial pain, energy costs have spiralled, and an estimated 1.5 million people will struggle to pay their energy and food bills. However, there is nothing in the Queen’s Speech to support households with the cost of living, no proposals for an emergency budget, no compassion and no hope. No wonder Simon Hart, the Welsh Secretary, described the speech as “dull as hell”.

My Lords, let me take this opportunity to join in the many thanks to Her Majesty the Queen and express our pleasure at seeing her in such good form over the weekend.

“Yesterday upon the stair,

I met a man who wasn’t there.

He wasn’t there again today”.

How better to describe this Government’s abject failure to recognise the scale and urgency of the cost of living crisis facing ordinary people? The Minister said that the Government must store up contingency resources for the future crisis. This is the future crisis: it is here now and action is required now. It has nothing to do with personal budgeting, home cooking or somehow getting a much higher paid job next week. Inflation continues to surge, especially on energy and food, and interest rates are rising. We have the spectre of stagflation.

The National Institute of Economic and Social Research reports that 1.5 million people will see soaring food and energy costs outstrip disposable income this year, forcing them to drain savings or go deeper into debt. The Yorkshire Building Society and the Centre for Economics and Business Research expect average household spending to exceed average income by over £100 a week within two years. Almost 60% of SMEs are now relying on the absolute no-no of borrowing to cover their basic insurance payments. A cost of living crisis is being followed by a debt crisis.

The Government are AWOL when they should be acting. They should immediately restore the £20 uplift to universal credit, cancel the increase in national insurance contributions and cut VAT temporarily from 20% to 17.5%, as my party has been calling for. That VAT cut would put an extra £600 into a typical family’s pocket, as well as support businesses, especially small businesses, who had hoped that they were recovering after Covid but are now slipping into crisis.

My Lords, I declare my interest as co-chair of Peers for the Planet. I will speak mainly on issues of climate change, foreshadowed by the speeches of the noble Baronesses, Lady Kramer and Lady Jones. First, I will refer briefly to two issues from the gracious Speech. I was pleased to see and am interested in taking part in the legislation on the genetic technology (precision breeding) Bill. The time that I spent at the then Ministry of Agriculture persuaded me that it is possible to use precision genetic technology to the benefit of both agriculture and consumers. As a country, we are good at regulation in these innovative situations, and we ought to pursue that.

The other issue, which gives me concern rather than enthusiasm, is the line in the gracious Speech about restoring the balance of power between the legislature and the judiciary. I worry about what that means and will listen very carefully and with some concern to the Government’s proposals in this area.

But I will speak mainly, as I did a year ago, about the climate and nature crisis confronting the country and the Government’s response to it. Today marks six months from the COP 26 conference in Glasgow and it was looking forward to that conference when many of us spoke last year. We did so despite the clouds of the global pandemic that hung above us all. We talked about the way in which it was important to find paths out of that crisis that did not set back the path on which we had embarked towards tackling the climate crisis. Today, we have different clouds above us. They are dark, and they are of war and—we talk of the cost of living crisis—of poverty. That is the problem that clouds our horizons today.

However, those dark clouds low above our heads have not taken away the clouds above them, the global clouds, or the necessity of acting internationally and nationally. I shall once again say what I have said many times: of course we are as a country a small emitter globally, but we are a leader globally. We are a leader in innovation and achievement. When we do that, we have an international heft far greater than simply our domestic achievements. It is really important, as Alok Sharma, who is still president of COP26 said today, that we do not commit

My Lords, in view of the limited time to discuss the economy, I shall concentrate on inflation and, in particular, the role that the Bank of England has played in unleashing inflation in our country through failing to meet its proper mandate. The Bank has bought some £875 billion of government debt, half of that in the past two years. It has done so, including £50 billion in the last quarter of last year, against the advice of its own economist, Andy Haldane, who resigned, and, more importantly, of the Economic Affairs Committee of this House, which unanimously pointed to the stupidity of stimulating the economy when demand was increasing following the amounts that were saved as a result of Covid. We suggested that it might have inflationary consequences. The report was called Quantitative Easing: a Dangerous Addiction?. The Governor of the Bank of England’s first response to it was a rather trivial one. He said that we should not have used the word “addiction” because it would offend people who had illnesses. When we got the formal response—there are members of the committee here—it basically did not deal with the arguments, and the Treasury’s response was a two-page letter from the Chancellor of the Exchequer. The effect now is that the Governor is telling us that we can look forward to double-digit inflation, when less than a year ago he was telling us that it was a transitory phenomenon when it was at 3.6%.

Being a Lords committee, we were diplomatic and kind and suggested that perhaps the Government, in printing £450 billion, might have been doing it to finance the Government’s spending. But we were told that, no, that was not the case at all and that it was in order for them to meet their mandate to get inflation to 2%. Well, it does not seem to have worked out quite like that. To me it is pretty obvious that if it looks like a duck, it is a duck, and that what the Bank of England has been doing is printing money to fund government expenditure, which inevitably results in inflation.

My Lords, the Queen’s Speech contained no emergency measures to address the cost of living crisis that households are experiencing. Rather, the Prime Minister said that

“for every pound of taxpayer’s money we spend on reducing bills now, it is a pound we are not investing in bringing down bills and prices over the longer term … this moment makes clear our best remedy lies in urgently delivering on our mission to turbo charge the economy … and spread opportunity across the country.”

But the challenge to that trade-off—less bread today but more bread and jam tomorrow—is rising inflation. It weakens plans to reduce regional inequalities, every pound of government spending is worth less and it is deepening inequality. Is there a point at which the Government would accept that families’ current struggle with the cost of living was too great and they would have to introduce emergency measures? If so, exactly what is that point?

Reversing the UK’s economic inequalities requires large-scale measures that are well directed and backed by substantial levels of funding over a prolonged period. We heard little about future funding in the Queen’s Speech. We know from Germany that closing regional inequalities takes time and huge sums of public investment. Germany has transferred around €70 billion a year for 30 consecutive years to level up its country.

So I ask the Minister: given that rising inflation means that departmental spending plans set by the Treasury in October are increasingly worth less in real terms, what steps will the Government take to ensure that they meet their new national missions? Will they increase the budgets or lower their aspirations for what can be achieved by 2030?

The UK has one of the most centralised decision-making systems in the OECD, contributing inefficiencies to the imbalances in our country. National decisions are made without a full understanding of their impact on different geographies. The Government accept that a fundamental rewiring of the system of decision-making, locally and nationally, is required to address geographical disparities in England. We wait to see whether those leading the process have the will to deliver it, and whether the Treasury will actually relinquish powers. To quote from the Constitution Committee’s report on respect and co-operation,

Could the noble Baroness bring her comments to a close, please?

Sorry. Okay, well, the FCA’s new consumer duty and consumer vulnerability guidance concentrates on vulnerable consumers with access to retail products; it does not deal with those who do not have access to those products.

Finally, I look forward to hearing the maiden speech of the right reverend Prelate the Bishop of St Edmundsbury and Ipswich. I am newly discovering Suffolk as my daughter and granddaughters have gone there, so I shall listen intently to his contribution.