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 Your Majesty has addressed to both Houses of Parliament”.
My Lords, I am honoured to open this debate on Her Majesty’s gracious Speech, and I look forward to many valuable and insightful contributions, particularly from the right reverend Prelate the Bishop of Bristol and the noble Baroness, Lady Bennett, both of whom will make their maiden speeches. I thank my noble friend Lord Gardiner, who will wind up today’s proceedings.
This Queen’s Speech lays out a bold vision for Britain: a country where investors want to do business, where opportunity is open to all and where more people are in work than at nearly any time in our history; a country where every city, town and region has the tools to fulfil its economic potential, but in a sustainable way; and a country that is stronger for having been prudent with our finances over the past decade, but is now able to boost investment in public services and vital infrastructure. Today’s debate will consider the Government’s approach to public finances in the next Parliament, alongside plans for transport, business, financial services, and the environment and rural affairs. Each of these areas makes a crucial contribution to the development of a strong, secure and prosperous nation.
I turn first to spending and financial services. As Her Majesty’s gracious Speech made clear, the Government’s economic plan will be underpinned by fiscal responsibility—investing in economic growth while maintaining the sustainability of public finances. As a country, we are in a strong position. The deficit has been reduced by four-fifths since 2009-10 and we have seen the economy grow every year since 2010. There are 3.6 million more people in work, and the proportion of low-paid jobs is at its lowest in 20 years. Wage growth has outstripped inflation for over a year, putting more money in people’s pockets, and inward investment in the UK has created more than 200,000 new jobs over the last three years. With our robust fiscal position, day-to-day spending under control and a near-record low cost of borrowing, we can now invest more in boosting our economy and supporting the things that we care most about.
That is why, ahead of November’s Budget, the Government will review our fiscal framework to ensure that it not only meets the economic priorities of today but succeeds in delivering a decade of renewal for our country. The review will be coupled with the development of a clear set of rules that will anchor our fiscal policy and enable us to keep control of our national debt.
Our continued ability to compete for investment and jobs depends on our competitiveness. Financial services are critical to the UK economy. The sector employs more than 1 million people in all four UK nations, contributes more than £127 billion to our national economy, and helps provide a trade surplus of over £61 billion. That is why in the Queen’s Speech we included measures to provide certainty and stability for this crucial sector through the financial services Bill. The Bill seeks to enhance the UK’s competitiveness as an international financial services centre, while maintaining our current robust consumer protections. It will deliver on previous government commitments: it will deliver long-term market access arrangements to the UK for financial services firms in Gibraltar; simplify the process which allows overseas investment funds to be sold in the UK, a step that will allow this country to maintain its position as a centre for asset management; and implement the Basel standards, strengthening the regulation of global banks in line with previous G20 commitments.
It is remarkable how little support for the achievement of the Civil Aviation Authority there has been in our public prints. There has been very little coverage. We all owe a lot to the planners involved in the operation: they are in the public sector—which is why some of the press does not support them—and they did a remarkable job. They deserve our thanks for that.
The noble Lord is completely right and, as he will know, I am a Transport Minister and was involved in the repatriation and obviously in its planning. Within the Department for Transport we are enormously grateful to the CAA and the DfT team who worked so hard on it, but the sad thing is that sometimes the media does not really like good-news stories. Once it was not a disaster, it fell out of the news very quickly, which rather limited our ability to say thank you to the CAA. Certainly, the Secretary of State, other Ministers and I have all thanked the CAA and said that it did a tremendously good job, and all credit to it.
This year marked the 25th anniversary of rail privatisation. Over that quarter of a century, passenger numbers have doubled; we are running more trains than at any time on record and we enjoy a safety record that is world class. Yet these accomplishments have come at a price and we have become victims of our own success. The UK’s railway network is now twice as heavily used as the networks in France and Germany, and delays and disruption are all too frequent. Therefore, while we are pumping an unprecedented £48 billion into rail improvements over the next five years, the railway needs to evolve to deliver for its customers.
In the aftermath of the May 2018 timetable disruption, the Government commissioned Keith Williams to carry out the most comprehensive review of the sector in a generation. His reforms will focus on five key areas: getting the trains to run on time; simplifying fares and ticketing; developing a new industry structure; creating a new commercial model; and unveiling proposals on leadership, skills and diversity. We will publish a White Paper on the review’s recommendations this autumn and, as stated in the gracious Speech, the Government have committed to bring forward proposals on railway reform. It is absolutely imperative that railway customers feel the benefits of these changes as soon as possible.
My Lords, I am grateful to the Minister for her contribution to the debate on the gracious Speech today, but she will know all too well that we are being asked to participate in a charade, in which the Queen’s Speech is not a serious plan for government and in which most of these Bills will never see the light of day. It is quite clear from everything that the Prime Minister has said that he intends to call a general election at the earliest opportunity. We will then find ourselves back here, with a different Government, we hope, and certainly with a new Queen’s Speech. So, we cannot be asked to consider this proposition seriously. It is as near to an election broadcast as we are likely to see, with uncosted promises, sweeteners and posturing that do nothing to address the real economic and climate change crises that challenge this country.
Let us be honest: the crises that face us today are all of this Government’s own making—nine wasted years of failed economic policies, a divided nation and the madness of a Brexit policy that will rip up our trading relations with our closest partners, undermining our trade with 500 million consumers across 27 countries. This is the inevitable consequence of leaving the single market and the customs union, which, Mark Carney has made clear, will lead to escalating job losses and business closures. Just as inevitably, it will lead to lower food, consumer, employment and environmental standards in the push to do cheap trade deals with free-market cowboys and protectionist-in-chief Donald Trump.
Let us look at the economic legacy an incoming Government will inherit. Nine years of ruthless austerity Budgets have squeezed the life out of public services and left local government unable to fund even its statutory services. There is a crisis of low pay and stagnating wages, with workers’ real wages still lower than they were before the financial crisis. The productivity of British workers fell at the fastest pace for five years in the second quarter of 2019. A struggling construction sector faces a growing skills crisis. The Government’s botched business-rate revaluation has created a huge destabilising burden for businesses, with many high streets becoming ghost towns. And the UK’s longer-term economic outlook is darkening, as years of uncertainty have prevented businesses investing in people or capital.
I am listening very carefully to what the noble Baroness is saying but, when she goes back to 2010, does she not remember that little note left by one of her Ministers at the Treasury that said, “There’s no money left”?
Absolutely. That was a world crisis that we were dealing with, and would have carried on dealing with if we had been given the opportunity. The Government’s response to that crisis, which was to drive down austerity for nine years, has done nothing to improve the economy, as we have seen and as I have just outlined. So I do not think we can take lessons from the current Government on how to maintain economic security.
My noble friend might also remind the noble Baroness who interjected on her that until the financial crisis, borrowing was actually at record lows—lower than we inherited from the Major Government—and the national debt was low. We were running sound public finances. It was the global credit crunch that blew that out of the water, not Labour government policies.
I am grateful to my noble friend, and of course I concur with his analysis.
I want to talk about what we believe is the Government’s legacy on the biggest crisis of our generation: the impact of climate change. Of course we welcome the announcement of the new Environment Bill, which is very long-awaited, and we look forward to giving it robust and energetic scrutiny when it arrives in this House. We will want to see legally binding targets on air quality, water, waste and biodiversity, and we want to ensure that the Office for Environmental Protection has the necessary powers to hold the Government and public authorities properly to account.
However, the Bill deals with only one department’s contribution to improving our environment and cutting carbon emissions, when what is needed is a whole-government plan on a transformative scale to tackle the climate change emergency. According to the Committee on Climate Change, the UK is way off target to meet its fourth carbon budget of 2023 to 2027 and its fifth carbon budget of 2028 to 2032. Last year, the committee set out 25 headline policy actions for the year ahead, but 12 months later only one has been delivered in full and 10 of the actions have not even shown partial progress. The noble Lord, Lord Deben, who chairs the committee, was absolutely right when he said recently, “The whole thing is run by the Government like ‘Dad’s Army’. We can’t possibly go on with this ramshackle system. It doesn’t begin to face the issues”.
The young people of this country understand the climate change emergency all too well, and even some of us crusties understand why the time for action is now. Sadly, the Government consistently fail to give the issue the priority it demands, and this Queen’s Speech represents another failed opportunity. For example, in energy, the collapse of the Government’s new nuclear programme, combined with their opposition to onshore wind and their removal of support for other forms of energy, raises huge questions about how we will source our energy by 2030 and beyond. The Government’s offshore wind sector deal is a helpful step, but there are no consequences if the targets are not met. As we know, the Government’s closure of access to the feed-in tariff for solar power sabotaged the industry before it really got going, with new installations falling by some 90%.
My Lords, when we debated the Chancellor’s Spring Statement not very long ago, it became clear that the Government had spent the entire Brexit contingency fund on election promises. I remind the House that that was a contingency fund not just for a no-deal Brexit but for the damage that any form of Brexit would commit to our economy.
UK in a Changing Europe has pointed out that the Johnson version of a deal—which I assume will be incorporated in language that we may see later today—which requires a departure from the customs union and rejects the level playing field, a really critical issue, would hit the UK’s GDP even more than the May deal. It drops its running rate by about 2% on a long-term basis, which would have a really serious impact on the prosperity of this country. The aerospace, automotive, chemicals, food and drink and pharmaceutical sectors, which employ more than 1 million people, have warned that the Johnson determination to abandon the level playing field and essentially eliminate regulatory alignment with the EU poses a “serious risk” to the manufacturing sector, and go on to talk about how it would disrupt the supply chain and undermine UK exporters. To underscore the consequences, the automotive sector has confirmed that one in three firms is already shedding jobs. On its website, it makes it clear that this has little to do with the global turndown and everything to do with Brexit.
I speak for a party that, if put into power in a general election, would end Brexit and the damage it inflicts on the UK economy. My colleagues and I can commit significant new money for public services, welfare and proper long-term funding for infrastructure, including housing, broadband and transport; we can take measures to boost skills and productivity and to support growth businesses all across the regions; and we can provide the investment and safeguards necessary to achieve net-zero carbon by 2040, because we will not do the damage of Brexit. And, because we are willing to raise taxes, including 1p in the pound on income tax hypothecated to the NHS and social care and the reversal of cuts in capital gains and corporation taxes, we can do so with the complete assurance of fiscal responsibility and stability, which is crucial to future economic growth. We alone have no Brexit burden and do not ask for a magic money tree.
My Lords, I am grateful for this opportunity to discuss the Government’s economic strategy, and I look forward to hearing the maiden speech from the right reverend prelate the Bishop of Bristol.
The economy has been slowing, the labour market is on the turn and the monthly public finance figures suggest that borrowing is beginning to rise. I welcome this morning’s news that the Government have reached a withdrawal agreement with the European Union, and I have been encouraged by the recent rise in sterling on the prospect of that deal. It is a reminder of the virtuous circle of economic management. If the markets have confidence in the Government’s policy, the exchange rate strengthens. That in turn makes British citizens better off and instils further confidence. I hope that the Government will bear that in mind during the interminable trade negotiations which will dominate their time—and Parliament’s time—over the next decade.
I also welcome the statement in the gracious Speech that,
“the Government’s new economic plan will be underpinned by a responsible fiscal strategy, investing in economic growth while maintaining the sustainability of the public finances”.
I suspect that I am not the only person to play Queen’s Speech bingo. Words such as “plan”, “responsible”, “investing”, “growth” and “sustainability” are all reassuring, but I suspect that they have featured in many a Queen's Speech over the last 50 years. I know because I helped draft some of them. I hope that I will be forgiven for regarding them with a degree of scepticism.
It is best to judge economic policy by actions rather than words. The Government had an excellent inheritance. Thanks to the work of successive Chancellors in Alistair Darling—now the noble Lord, Lord Darling—George Osborne and Philip Hammond, the public finances were broadly back on track by the beginning of this year. Mr Hammond deserves particular credit. Whatever you think about the levels of taxation and spending, he presided over the Treasury at a difficult time. But he stuck to his task and last year’s deficit of £41 billion—a little less than 2% of national income—was a major achievement.
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The Lord Bishop of Bristol (Maiden Speech)
My Lords, it is an honour to be here to speak and, after nearly a year of watching and learning, to begin to find my voice. I am grateful to the noble Lords who have welcomed me so warmly after my introduction today and to the officials and staff who have guided me so well—not least the Church of England Parliamentary Unit.
Much has been unfamiliar but, having spent most of the last 30 years working in cathedrals, for the last 18 years as a dean, there was a certain familiarity on entering a building in need of significant structural attention. As provost, then Dean of Leicester, I worked on plans for the reordering of the interior and landscape setting of that largely Victorian building so that the cathedral might be brought back into the heart of that extraordinary, multicultural city. As chair of the cathedral council, the noble Baroness, Lady Byford, was a vital source of wise guidance during those years of rapid change.
Shortly before my appointment to York Minster was to be announced, I received a message from across the road in Leicester that archaeologists had, they believed, found the burial place of Richard III and identified his body. That news, when made public, would transform the life of Leicester Cathedral and set a narrative for my start at York which was not altogether easy, as York and Lancaster competed for his bones.
I began in ministry as a lay worker and deaconess in Liverpool, some time before the possibility of priesthood for women. As will be familiar to so many women in many fields, I had few role models or established employment paths. I became a college chaplain, then a cathedral chaplain, because there were teams in those places prepared to make space and find funding for me. I flourished in those spaces, not least because I enjoyed presenting what was then a rather unexpected female aspect to the Church.
At the start, however, my family—particularly my mother—was profoundly concerned at my sense of vocation. My mother was a Bristolian from a family firebombed out of the ward of Redcliffe, in the city’s heart. While continuing their war work, my grandparents were housed in a prefab and then in Sea Mills, which is still a fine example of a community designed and funded by a local authority. My mother was evacuated to Cornwall, served with the Wrens and was awarded a scholarship to the London School of Economics. Once she had overcome her anger at her daughter’s calling to, as she saw it, a vocation that could not be received by the Church, she became a founding member of the Movement for the Ordination of Women—so here I am.
I have, to my surprise and delight, returned to my mother’s city. The diocese of Bristol exists because the citizens of Bristol wished it so, petitioning Henry VIII to stand alongside Gloucester. However, the diocesan funding model was never entirely realistic. Lands were added over time, including, for a while, the county of Dorset as no other see seemed to want it. Bishops of Bristol had to find their fortune, often via livings held in plurality. One of my predecessors was simultaneously both Bishop of Bristol and Dean of York and was, I think, not often seen in Bristol. In the 19th century, Bristolians regretted the grant of the see, burning the bishop’s palace down and threatening the cathedral after the bishop voted against the Great Reform Bill.
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I turn now to matters relating to business, energy and industrial strategy. This is a Government who want everyone to enjoy the full fruits of their hard work. However, when the Government consulted on the issue of worker tips, we found that two-thirds of employers in the hospitality sector were making deductions, some of which were around 10%. This practice has to stop. The allocation of tips Bill, announced in the gracious Speech, will promote fairness for workers by creating a legal obligation to pass on all tips and service charges to workers in full and to distribute tips on a fair and transparent basis.
In this Queen’s Speech we have pledged to take steps to make work fairer for all. This Government have committed to deliver on the steps set out in our Good Work Plan—published late last year—which sets out our vision for the future of the labour market. These measures will ensure that employment practices keep pace with modern ways of working and that employees have access to the rights and protections they deserve. These reforms will also protect businesses that do the right thing for their workers from being undercut by a small minority that seek to circumvent the law. In addition, we are bringing forward national security and investment legislation to strengthen the Government’s existing powers to scrutinise and intervene in business transactions that are a threat to national security. These measures will give businesses and investors the certainty and transparency they need to do business in the UK.
This Government are committed to ensuring that the UK not only remains a champion of free trade and investment but becomes a global leader in scientific capability and space technology. In the gracious Speech we set out our commitment to significantly boost R&D funding, which will give long-term certainty to the scientific community. We have also laid out plans to introduce a more accessible visa scheme to attract the best and brightest global scientific and research talent. We will establish a new national space council and launch a comprehensive UK space strategy—measures that will transform this country into a global science superpower.
Finally, we are equally ambitious in the scale of our commitment to the environment. We are the first country to legislate for long-term climate targets; after nearly half a century under EU rules that dictate how we manage our nation’s environment, now is the time to go further and faster, to lead the world in safeguarding the environment for our children and future generations.
The Environment Bill will embed environmental ambition and accountability at the heart of government through legislative measures to improve air quality, nature recovery, waste and resource efficiency and water resource management, in a changing climate. These changes will be supported by new legally binding environmental improvement targets, while a new independent regulator will be established to scrutinise environmental policy and law, investigate complaints and take enforcement action.
This Queen’s Speech demonstrates our clear ambition to leave the natural environment in a better state than we found it, delivering a cleaner and healthier environment for future generations while securing the nation’s food production and revitalising our rural and coastal communities. Through the agriculture Bill, we will reward farmers for tackling the causes and effects of climate change and enhancing the environment; and through the fisheries Bill, this Government will manage fishing stocks more sustainably and protect our waters.
We will ensure that the UK sets a global gold standard for animal welfare, enhancing our reputation as a world leader and allowing us to lead from the front as we leave the EU, recognising animals as sentient beings in domestic law and increasing the maximum custodial sentence for animal cruelty from six months to five years.
These are measures that demonstrate this Government’s clear ambition to leave a positive environmental legacy for those who follow us. This theme of ensuring that our nation is the very best it can be in the decades to come runs right through the Government’s plans. The Queen’s Speech sets out a clear legislative programme that will prepare this country for the future and help us to build a stronger, greener, more prosperous Britain.
Our nation’s exit from the European Union dominates events in Westminster, but today there is an opportunity to debate and scrutinise our wider plans for the months and years ahead.
As ever, the Government’s response has been too little, too late. On 4 September the Chancellor announced his spending plans for 2020-21, with departmental spending increases of 4.1%. However, the £13 billion that this plan represents is less than one-third of the £47 billion of cuts introduced by the Government since 2010. It goes nowhere towards resolving the backlog of funding in the NHS and social care, for example, which is seeing standards falling and the elderly suffering alone. No wonder it was met with a universal shrug of the shoulders when it was announced.
Meanwhile, the Government have failed to capitalise on the enormous potential of tidal power, with first the Severn barrage and now the Swansea Bay project failing to win government support. Instead, the Government seem intent on promoting fracking in the face of overwhelming local opposition to the air pollution, earthquakes and risks to local water quality that it would bring about. Where is the energy Bill in this Queen’s Speech that would deliver the transformation to renewables essential to meeting our climate change targets?
Similarly, we know that transport is the most emitting sector of the UK responsibility, responsible for 27% of our greenhouse gas emissions. Yet it is also the worst performing sector when it comes to reducing carbon emissions, which continue to increase as a result of traffic growth and a lack of public transport alternatives. The lack of electric charging structures for cars continues to hold back our transition to cleaner vehicles. The Government’s Road to Zero strategy to decarbonise road transport, with a plan to end the sale of petrol and diesel cars by 2040, is widely considered weak and unambitious. Clearly, what we need is a major push for electric vehicles and charging points, incentivised by a scrappage scheme for the most polluting vehicles. This would help to deliver our carbon reductions, as well as tackle the scourge of air pollution that is poisoning our children’s health. Where is the transport Bill in this Queen’s Speech, which would have delivered our transformation to a world-leading clean transport economy?
We also need to ensure that agriculture plays its part in reducing greenhouse gases. Intensive agriculture currently contributes nearly 10% of our carbon emissions. Of course, this was an issue beginning to be addressed in the agriculture Bill, which this Government seem in no hurry to debate. However, we welcome the shift in the Bill from supporting land ownership to the principle of delivering public money for public benefit, to improve our natural environment, restore habitats, plant trees and tackle carbon emissions. Sustainable food production is a vital component of that, including action to rethink our diets and understand the provenance and nutritional value of the food we eat, and its impact on biodiversity.
However, this Government have already lost the confidence of farmers, with continuing uncertainty about future funding and punitive no-deal tariffs which would make our farm products uncompetitive. The agriculture Bill will fail in its objectives if we do not prevent farmers and food manufacturers being undercut after Brexit by countries with lower employment, animal welfare and environmental standards.
There is an alternative to a future of economic decline and climate change devastation. This is why, when the election is called, our party will put forward a programme that is truly transformative. It will build an economy that works for all. It will deliver a comprehensive industrial strategy with a national investment bank and regional development banks to help unlock £250 billion of investment for businesses. It will tackle the climate emergency with robust new deadlines for action and a target of 2030 for net-zero emissions. It will invest in renewable energy, utilising the full potential of offshore wind, solar and tidal projects. It will harness the huge opportunities that a green economy can bring, with new jobs and investment putting us at the forefront of global innovation.
These are the kind of radical reforms needed to kickstart our economy. I look forward to hearing the contributions from other noble Lords, particularly the maiden speeches we will hear today. I am sure noble Lords will add their expertise to the list of necessary and radical reforms needed today.
The Queen’s Speech reads very clearly as a Tory election manifesto. I find even the titles of the Bills fascinating—because, let us be honest, they are dog whistles—such as “foreign national offenders”. Somebody worked really hard to get the words “foreign” and “offenders” in the same phrase. They tell us who, in the view of the Tory party, is now its core voter: people who will respond to a right-wing message. That, of course, is reinforced by what is left out of the Queen’s Speech: any measures to relieve children in poverty, to expand youth services or to increase social housing, because those are not considered appealing to the now hard-right Conservative Party.
As I look at the description of the financial services Bill, I see the words “new opportunities”. We all know what that means. It is regulatory dilution: an appeal to the casino element of the financial services industry, which has been chafing at the safeguards imposed after the 2008 crash, to which those casino financiers so powerfully contributed—casino players who have put so much money behind the Brexit campaign. The good companies want none of the reputational damage that comes from regulatory dilution. Financial services as an industry have minimal interest in “new opportunities” where that means “regulatory divergence” from the EU. Every sliver of regulatory divergence makes even more tenuous the hope to negotiate long-term equivalence across the sector. New opportunities fail to make up for even a small part of the business the UK is losing. The financial services industry has spent in excess of £4 billion on Brexit, trying to protect its customers and its operations, both current and future. To give just one example, Lloyd’s of London is moving so many insurance and reinsurance policies—everything with any EEA connection—to Lloyd’s of Brussels that, even working at top speed, the process will not be complete before the end of 2020.
Can the Minister confirm that about 15% of the financial services industry has already been shifted to the EU 27, with another 15% lined up to leave if Brexit happens, regardless of a deal? Many have gone to Frankfurt or Dublin, some to Brussels, Amsterdam, Luxembourg, Madrid or Milan, seeding them with the know-how to become serious competitors, but interestingly, trading—which in so many ways has been the distinctive flagship of London—has chosen Paris, where it is now working closely with AMF the French regulator. More than 35% of firms have announced their relocation. Historically, this is the part of financial services that has contributed most strongly to the UK tax base, and where trading goes, asset management and treasury operations eventually follow. Certainly, the measure on overseas investment funds, which seems to be the highlight of this weedy little financial services Bill, is an exceptionally sad little response to what is, frankly, a major calamity. I assume it is a sop to Jacob Rees-Mogg, who has been politically embarrassed—though not embarrassed in the pocket—by Somerset Capital’s decisions to site new funds in Dublin.
There is nothing but nothing in the Bill to assist the fintechs, who are the future but who cannot afford multiple locations and so will be among the hardest hurt by the loss of passporting, the e-commerce directive and the prospectus directive. Even more than the big players, they will suffer from the ending of freedom of movement, which has supplied so many of the entrepreneurs as well as at least 30% of staff. Even if they qualify for a visa, these people, who are in demand all over Europe, will not come to the UK on a visa that is limited by time, does not let their partners work and prevents older children from living with them.
This has to be one of the most insubstantial Queen's Speeches I have ever seen. Even for a lazy manifesto committee, the descriptions of most of these Bills are essentially a void. It really is a revelation to see so graphically that the Brexiteer vision for Britain has no substance and certainly nothing that would provide a framework for a successful economic future. It is all hubris. It is all nostalgia for a past that never was. I have never been more convinced that this Government do not deserve to govern, and that we have to stop Brexit.
However, since he stood down the mood music has changed. One unfunded spending announcement has followed another. We had a mini-spending round last month and a Budget will take place next month. I feel for Treasury officials: you spend a decade putting things right and then, like Sisyphus, you see the rock falling down the hill as the Government pursue a policy of fiscal incontinence. I may be being unfair to the Chancellor; he may yet set out how the spending pledges will be paid for and how he can still meet Mr Hammond’s fiscal rules. Meanwhile, I would like to make four brief points that in my experience generally inform a successful economic strategy.
First, the Government need to recognise that when the public finances turn against you, they can deteriorate very quickly. That certainly happened in 1992; it happened again in 2009. It is a reminder that spending windfalls in the good times while borrowing to finance shortfalls never ends well. We will enter the next downturn, as and when it comes—and believe me, they always come in the end—with higher debt in relation to national income than in any previous downturn of my working life. I would advise the Government to be prudent. They should be building a contingency to guard against a downturn—or, to use a phrase much beloved by our last Prime Minister but one, we should mend the roof while the sun is shining.
I would also advise against dressing up a widening deficit as clever Keynesian demand management. There is a case for supporting demand through fiscal policy, but it should be from a much stronger position. The present problem that Britain faces is of supply rather than demand. Fiscal fine-tuning rarely works. As the noble Lord, Lord Lawson, said as far back as 1962:
“The Treasury has never done anything too soon ... its actions fall neatly into two categories, too little too late and too much too late”.
Secondly, the Government need to keep an eye on the longer term. It is in the next two decades that the long-foreseen ageing of the population will become all too apparent. As the independent OBR has made clear, even on unchanged policies the Government will face continued pressures on the NHS, on long-term care and on pensions. These spending pressures will take the form of current consumption. A sound fiscal policy requires consumption to be financed out of taxation rather than borrowing.
My third point is that the Government need to prioritise relentlessly. Last week, the ONS confirmed the dire state of British productivity. Output per hour has risen by just 2% since the last quarter of 2007—a trend reflected in stagnant living standards. Brexit is going to put further pressure on productivity, so it is more important than ever that the Government prioritise skills and infrastructure. If a Polish taxpayer is no longer going to pay for the skills of our workforce, we are going to have to pay for them ourselves. Similarly on infrastructure, the Government have made real progress in recent years in coming up with a national plan—but that still contains projects such as HS2, which deliver insufficient returns. Those projects with the highest economic returns must come first.
Finally, the Government need to create an environment conducive to trade and prosperity. That is partly about implementing a competition policy at least as rigorous as the European Union’s state aid regime. When I started at the Treasury some 35 years ago, the first paper which landed on my desk was entitled Lessons of DeLorean. It made bleak reading—so let us not prop up lame ducks or adopt protectionist procurement deals at the expense of the taxpayer.
We also need a sensible trade regime. Gladstonian liberalism has been fundamental to the success of the British economy. This is not the time to erect barriers with our closest trading partners. The Government cannot admit it now, but when the dust settles and the revolutionary fervour of the ERG burns itself out, I confidently predict that we will remain close to the single market and to the customs union—and that will be progress indeed.
Bristol remains politically lively. It has been, and remains, a space where ideas are contested. At its civic heart, on the public space that was once the harbour quay, sit the statues of two men once seen as models of virtue, now a focus for impassioned debate about virtue. The first is Edmund Burke, the parliamentarian, who insisted on representative rather than direct democracy. The second is Edward Colston, the benefactor, who probably derived his great wealth from the proceeds of slavery. Slavery, as we know, is not simply confined to the past, and tackling the scourge of human trafficking is one of the areas I hope to be involved in during my time as a Member of this House.
Bristol is also a city of engineers, where ideas are turned into things which change our lives. My grandfather was an engineer who worked his way up from an apprenticeship to the line, as foreman for Hawker Siddeley. His stories were of his pride in Brunel, Rolls-Royce and, above all, Concorde. Concorde’s home is beyond the city but in the diocese, which is more than the city of Bristol.
Air travel is another focus for dissent. In recent years, Bristol and its hinterland have emerged as an area where ideas and responses to the harmful human impact on our planet have priority on the public agenda. The long-standing research and educational work of the Bristol Zoological Society and the Bristol-based BBC Natural History Unit, and in Westonbirt arboretum and Slimbridge to the north of the diocese and the innovative sustainable farming of the Chew Valley to the south, has demonstrated the extent of the threat, need and opportunity. Bristol engineers are now turning their practical ingenuity to sustainable building materials, decarbonised transport systems and waste-to-power plants.
The public mood in Bristol on climate change shifted some time ago, and church people are among them, leading in a whole-Church response. The youngest diocesan synod member chose to give a maiden speech in the Church of England General Synod inspired by the school strikes. Church communities are being challenged to meet the Eco Church award, to green their churchyards and to walk to church. One Church primary school is teaching others about beekeeping and, in Swindon, our newest secondary school’s uniform is made from reworked plastic bottles. The whole diocese has, through our close links with the Church of the Province of Uganda, been reminded that climate change will have its first and greatest impact on those living in poverty with least protection from flood, drought and the consequent population displacement.
I therefore commend the measures outlined in the gracious Speech for a new world-leading independent environmental regulator, the progress of which I will follow with interest. I look forward to continuing to contribute to debates on that legislation. I pray that Almighty God’s blessing may indeed rest upon the counsels of this House.
This Government are determined to ensure that productivity and opportunity are spread to every part of the country. Infrastructure is key to unlocking those benefits. Over 4,900 infrastructure schemes, both public and private, have been completed since 2010. The Queen’s Speech includes plans to build further on these projects, by this autumn publishing a national infrastructure strategy, which will be a blueprint for the future of infrastructure investment across the whole UK. The strategy will set out plans to close the productivity gap between the south-east and the rest of the country, raise living standards and ensure that no community is left behind. It will examine how, through infrastructure, we can address that most critical and pressing of challenges—decarbonisation. It will also set out plans to turbocharge a gigabit-capable broadband rollout and improve energy and transport infrastructure, helping to boost opportunity and spread prosperity throughout the UK.
I am proud to be part of a Government who fully recognise the value that transport brings to the country. Our roads, railways, ports and airports are the arteries that carry the lifeblood of our economy and provide the ties that bind us all together. Our commitment to modernising and extending Britain’s transport network is unprecedented, and our aviation sector is at the heart of our efforts to transform domestic and international connectivity. The UK aviation industry generates £22 billion a year for our economy and provides over a quarter of a million jobs. It is crucial that we support the sector because it makes such an enormous contribution to our nation’s strength.
Our complex and ageing airspace system has not been modernised since the 1960s and is now reaching capacity. Therefore, the air traffic management and unmanned aircraft Bill, contained in the Queen’s Speech, will give the Government the powers to ensure that vital airspace modernisation work can continue without delay to meet future aviation needs and deliver quicker, cleaner and quieter flights. It is essential that, as we help the aviation sector to thrive, we support it to decarbonise to help meet our national net-zero 2050 commitment.
The Bill will also help us combat a new threat—the illegal use of unmanned aircraft, such as drones. In the aftermath of the malicious drone disruption at Gatwick Airport last December, we brought in a range of measures to protect the public. Now, we are going even further and introducing new police powers that will help tackle the misuse of drones not only near airports but around prisons, over crowds and near important national infrastructure and protected sites. These powers include the ability to make someone land an unmanned aircraft and an enhanced ability to stop and search where the illegal flying of unmanned aircraft is suspected.
We are also taking action to deal more effectively with airline insolvencies, which, as we saw with the recent demise of Thomas Cook, can have profound implications for customers, taxpayers and the industry. We successfully brought home 140,000 Thomas Cook passengers from over 50 locations worldwide. It was one of the biggest ever peacetime repatriations, but it underlined the complexity and cost of such an operation. Therefore, we will bring forward legislation to enhance the Civil Aviation Authority’s oversight of airlines. It will create a new airline insolvency process to provide a means to keep the fleet flying and to get passengers home quickly and efficiently if the worst happens.