House of Lords
Thursday, 4 December 2014.
Prayers—read by the Lord Bishop of Derby.
Iran: Ghoncheh Ghavami
To ask Her Majesty’s Government whether they have made representations to the government of Iran on behalf of Ghoncheh Ghavami, a joint British and Iranian citizen who was jailed for a year after attending an International Volleyball Federation World League match in Iran.
My Lords, the Government have raised the case of Miss Ghoncheh Ghavami with the Iranian authorities on many occasions, most recently on 23 November. We welcome the news that Miss Ghavami has been released on bail, and will remain in close touch with her family.
My Lords, while welcoming the news that following the Foreign Secretary’s intervention, Ghoncheh Ghavami, a British and Iranian national, is no longer serving the sentence of a year in prison for seeking to attend a men-only volleyball match in Tehran, will the Government do all that they can to ensure that the result of her forthcoming appeal does not return her to prison, that all charges against Ghoncheh are dropped and that she is released from her two-year travel ban?
My Lords, I thank the noble Lord, Lord Moynihan, for raising this case. When a British citizen is being wrongly treated anywhere in the world, we have to be active on that person’s behalf. I thank the Foreign and Commonwealth Office and Ministers for the efforts they have made, as well as the work done by Miss Ghavami’s Member of Parliament, the honourable Andy Slaughter, on his constituent’s behalf. Please will the Minister ensure that the strenuous diplomatic efforts that have already been made continue—perhaps in the margins of today’s Afghan conference—so that, as the noble Lord, Lord Moynihan, said, this British citizen may return home as soon as possible?
My Lords, I understand that Mr Zarif is not attending today’s Afghan conference, but there will be Iranian representation. Those conversations certainly continue. One problem is that Miss Ghavami is a dual national, and the Iranians do not recognise the status of dual nationality.
My Lords, talking of returning home, 92 years ago yesterday, the cruiser “Calypso” steamed into Phaleron Bay and picked up a family going into exile. The youngest child was 18 months old and was in an orange box for his cot. He became an Admiral of the Fleet 30 years later. Would the Minister like to thank the Duke of Edinburgh for the huge amount he has done for our nation over that period?
My Lords, does my noble friend accept that it is a delicate business to seek to interfere with the judicial and legal process of another country? However deplorable we know it to be, the law of Iran is the law of Iran. We must therefore act delicately, let us say, in seeking to assist this young woman.
My Lords, we are certainly acting delicately. We all understand the delicacy of raising human rights issues with other countries. However, the human rights situation in Iran is dire. The periodic universal review of the Iranian position on human rights by the Human Rights Council, which is now under way, has raised a number of serious issues. Her Majesty’s Government contributed to raising those issues and we look forward cautiously to Iran’s response at the next meeting of the Human Rights Council in March 2015.
My Lords, of course there is a limit to delicacy. The Iranian political system is one of the most complex in the world. We are dealing with a democratically elected President, a judiciary that is partly responsible to the clergy and a Supreme Leader, not to mention the Iranian Revolutionary Guards. We are never quite sure, as we negotiate with the Iranian authorities, which authorities have the key ability to respond.
My Lords, an area of serious concern is the public hangings that take place in Iran. Next week, we celebrate International Human Rights Day. Is it possible for the Government to make representations to see whether some sort of moratorium could be established until such time as progress is made with these discussions?
My Lords, given that Iran has apparently been involved in bombing IS in Iraq, will the Government take great care to ensure that human rights are not decoupled from other activities in relation to Iraq, as well as Iran? Will my noble friend assure the House that representations will be made to ensure that the Iranian Government do not begin to hold sway over human rights issues arising in Iraq, where they are looking extremely influential at the moment?
My Lords, Iran is not the only state in the Middle East with which we have issues about human rights. We certainly do not intend to uncouple human rights from other issues, but we are also in the middle of some immensely complex nuclear negotiations with Iran, and then there are the many complications of the anti-ISIL campaigns.
EU: Justice Opt-outs
My Lords, on 20 November, the Prime Minister notified the Council of the UK’s wish to rejoin 35 EU police and criminal justice measures listed in Command Paper 8897. On 1 December, decisions were adopted by the European Commission and Council formally approving this application. Ministers have been in regular contact with their Irish counterparts throughout the process and the Home Secretary wrote thanking the Irish Justice Minister earlier this week.
I thank my noble friend for that Answer. Given that the Irish wisely kept miles away from the bizarre pantomime of opt out and then opt back in unleashed on the British Parliament by the two Conservative Secretaries of State, contrary to the advice of the European Union Select Committee, would my noble friend not agree that now the important thing is to emphasise the list of the renewed opt-ins, particularly the European arrest warrant, which is critical to the successful co-operation of the Irish and British police?
My noble friend is right that it is critical to have the European arrest warrant in place to avoid any operational gap—which we did as a result of the documents being deposited and agreed on 1 December. It is important that that continues, as is the case with all 35 measures. It is also good that we have retained and repatriated powers from the 100 that we did not opt into.
My Lords, in the matter of the opt-outs, while it is gratifying to know that the Government have been keeping in touch with the Irish authorities, sadly they have not always succeeded in fulfilling their duties to this House. After repeated failures on deadlines, in a letter that reached me within the hour the Government have now admitted that in relation to the decision of 1 December, which is welcome in substance, they broke the scrutiny resolution. When the European Union Committee had already written to assert its right to demand an Oral Statement consequent on this failure of the process, why are the Government now apparently resisting or refusing to make one? Is it not high time that the Government realised that it is as useless as it is impertinent for them to seek to avoid continuing embarrassment by putting their head in the sand?
Obviously, we take the noble Lord’s criticisms extremely seriously, given his position. I know that he does not raise these issues lightly. We also take seriously our obligations, set out in the appendix to the Companion, on scrutiny reserve powers. I urge him to accept that exceptional factors were at play in this instance, relating to the objections that were lodged by the Spanish, the Poles and the Austrians in July, which we did not anticipate. This then coincided with the recess period. The Spanish objections were listed only on 7 November and we needed to avoid an operational gap. That was why, in these exceptional circumstances, the Home Secretary had to take the decision to override scrutiny—which she did not do lightly. She did so to avoid people being at risk through the European arrest warrant not being in place. We have met the chairs and the work will be ongoing to ensure that this does not happen again.
But, my Lords, very early on in our debates about opt in and opt out, I asked the Minister which other countries the Government had discussed this with. I was told from the Dispatch Box that there was no need to discuss this with any other country; it was a matter for the UK Government. On the matter of substance, how many of the measures that the UK has now permanently opted out of in policing and criminal justice were relevant to the UK, were actually being used and had any value to the UK?
The noble Baroness says that we were not engaging in discussions, but these discussions through the working groups were absolutely ongoing all the time. That was the reason why we secured the improvements which we got through to the European arrest warrant in terms of proportionality, dual criminality and avoiding lengthy pre-trial detentions. In terms of every single one of the 135 measures, again, we set out very clearly in Command Paper 8671, which was laid before your Lordships’ House in July 2013, our view as to what the application was and whether it was necessary. From that, we took the view that 35 were necessary; that was why the Prime Minister wrote in July last year.
Can my noble friend explain to me, as someone who voted for the Maastricht treaty on the basis of an assurance that justice and home affairs would always remain within the jurisdiction of this Parliament, why, instead of opting into the European arrest warrant, we could not simply have made a bilateral arrangement with the rest of the EU?
I obviously acknowledge the fact that we both voted for the Maastricht treaty. We were both in another place at the time and were part of the Government who did that. I recognise that that was the right thing to do, but the reality is that the pass was sold on this in the 2009 signing of the Lisbon treaty. That is, we have to live in the real world, as we are now, and keep our borders safe. It was good that the opt-in on justice and home affairs was negotiated to be included by the previous Government, but it was this Government who actually took it and have exercised it in this regard.
But does the noble Lord not recognise that if in fact we went back to a system of bilateral arrangements between this country and other countries concerning extradition, the process would be longer, more difficult and more expensive than operating the European arrest warrant?
The noble Lord is absolutely right. Let us imagine the process just in relation to the original Question and what it would mean for negotiations with the Republic of Ireland: we would be back to the bad old days of highly politicised extradition proceedings. We do not want to go down that route; that is why we have taken the decision that we have.
The current plan is that in normal procedures on matters of this nature, we would issue a Written Ministerial Statement. It is of course up to Members of your Lordships’ House to seek further debate, should they wish it, but we have already had an extraordinary amount of debate on these issues. On 12 November there was a majority of 426 in the other place; they discussed it again on 20 November; we discussed and debated it on 19 November. I think that at some point, people need to say that we need to move on.
My Lords, we have a good working relationship with the judiciary, and I am a strong advocate of the independence of judicial decision-making. When concerns are raised by the judiciary, the Government reflect upon them. The government policy on legal aid continues to be that limited legal aid resources are made available for the most serious cases and to the most financially vulnerable.
My Lords, does the Minister acknowledge that in a judgment on 31 October the President of the Family Division made some excoriating observations, of general application, on the unjust effects of the denial of legal aid in a case where parents stand to lose custody of their child for ever? He stated that to “require” them,
“to face the local authority’s application without proper representation … would be unconscionable … it would involve a breach of their rights under Articles 6 and 8 of the Convention; it would be a denial of justice”.
In the words of the judge,
“the State has simply washed its hands of the problem”.
What steps is the Lord Chancellor taking to ensure that Her Majesty’s Government are not in breach of their legal obligations under the European Convention on Human Rights and the Human Rights Act to ensure that no parent facing proceedings for the removal of a child is prevented by a lack of resources from getting paid legal representation?
It used to be a convention that judges did not criticise politicians and politicians did not criticise judges. I do not propose to depart from that convention. What I can say is that both those litigants have in fact been able to get legal aid. There remain the exceptional funding provisions under Section 10 of the Legal Aid, Sentencing and Punishment of Offenders Act, which apply to cases in which there is said to be a violation of the convention or an EU provision. In fact there is a difference, and one should not conflate this, between scope and eligibility. Usually there is scope for these things, but the individual applicants nevertheless have to satisfy the tests of eligibility.
My Lords, is the Minister aware that the Bar Council has recently reported, after a review of LASPO, that the Act means that poor people generally speaking cannot get their cases heard in courts at all? Many of them try to represent themselves, though not very effectively. It is not a very good way to celebrate Magna Carta, as we shall be asked to next year, when we have a situation in which poor people simply cannot get their cases heard at all. This is particularly true as far as employment issues are concerned.
Litigants in person have always been a feature of the legal system. Clearly, any judge—I speak as someone who has sat as a judge—would much rather have a case in which both parties were represented by highly competent lawyers. Unfortunately, we have had to make certain cuts. The cuts, when fully implemented, will reduce the amount that we spend from £2 billion per year to £1 billion. This still makes us one of the most generous countries in the world. We are of course listening carefully to any anxieties that people have about there being injustices. We have committed to review LASPO on a period of three to five years.
My Lords, reverting to the question from the noble Lord, Lord Howarth, does the Minister agree that there will be cases in which parents will be unable to be represented on financial grounds in cases in which their children will be removed from them? Does he bear in mind that there was severe criticism in one court last week of the activities of a local authority in relation to just such an issue? Does he think that it is conscionable that there should be a single case in this country in which, because of financial indigence, parents cannot be represented in such cases?
I am not in a position to comment on the individual case but, in a number of cases, as the noble Lord will know, the legal aid scope remains. In cases of abuse, for example, it was retained. After careful scrutiny of the provisions by this House among others, we have tried to ensure that in all sorts of cases where it is most necessary there will still be legal aid.
Cross Bench! Low!
My Lords, will the Government give serious consideration to making provision for the continuation of the advice services transition fund when it comes to an end next summer? That would surely be a way to ensure cost-effective provision of a basic legal advice service and, if it is to be maintained when the fund comes to an end next summer, provision will need to be made before the election.
The noble Lord has frequently, before this House and elsewhere, helpfully advanced suggestions for providing legal assistance other than through legal aid. The Government are grateful for those suggestions and they continue to consider the report that he provided.
My Lords, the Lord Chancellor’s fig leaf to conceal the damage he has wrought to the legal aid system was the exceptional funding scheme, which he estimated would attract 6,000 applications a year—in itself, only around 1% of the former case load. In the event, applications are running at only around 1,000 a year, of which only some 14% are granted. Will the Government urgently review that scheme, and if not, why not?
My Lords, in fact, the number of applications in 2013-14 was 1,520. It is extremely difficult to anticipate precisely in what circumstances exceptional funding might or might not be appropriate. A considerable number of judicial reviews are taking place with regard to the exceptional funding scheme generally and on specific cases. The noble Lord of course objects to any cuts in legal aid. It must be remembered that despite what was in the manifesto of the party opposite, it has objected to every single cut to both criminal and civil legal aid. I look forward to hearing how it will justify an additional spending of half a billion pounds; that did not feature in the debate on the Autumn Statement.
My Lords, we still have time. Order—I am standing at the Dispatch Box. We have not heard from the Conservative Benches on this Question. My noble friend Lord Horam is due to speak next, and I know that the House is keen to hear also from the noble and learned Lord, Lord Scott.
My Lords, would it not be better if more lawyers in the legal aid field followed the example of Michael Mansfield QC, who closed his chambers but has reopened a new set of chambers on a lower cost base? Would the lawyers not be better advised to pursue that route, which many others in the public and private sectors have had to do at great cost over the last few years? We could then get a decent service at less cost to the taxpayers within the remit of what the public can afford.
It is important to emphasise that nothing will change under the criminal legal aid provisions. Everyone who is accused of a crime is entitled to legal aid. I agree with the noble Lord that the way in which criminal lawyers practise, as was reflected in the report by Sir Bill Jeffrey, will mean a certain agility on their part to make sure that they can continue to provide their very high standard in a more economic way.
Does the Minister agree that access to justice by citizens, either to enforce their legal rights or to defend themselves against claims made by others, is an essential ingredient in promoting and maintaining in this country a healthy respect for the rule of law? Does the Minister also accept that if an individual is unable on account of his impecuniosity to assert his claims or properly defend himself against claims made by others, the consequence will be a diminution in the respect which that individual has for the rule of law and a damage to the cohesion of the rule of law in the country as a whole? It has sometimes been said that the Ritz hotel is open to all, but of course it is open only to those with deep enough pockets. Would it not be a disgrace if the same could be said of the civil justice system in this country?
I of course entirely accept that access to justice is an important and fundamental part of the rule of law. Nevertheless, the country has to assess where best to spend the limited amount of resources on legal aid—on which, as I have said, we still spend a considerable amount of money. We will continue to review whether improvements can be made to this, and we will continue to review the situation depending on the financial state of the country.
Fraud: Phone Scammers
My Lords, the Government take the issue seriously. We are working with Action Fraud and the National Fraud Intelligence Bureau to ensure that all reported frauds receive an appropriate response from the police and that victims of phone scammers are provided with the right support. We are also working with Financial Fraud Action UK, which has issued advice to the public on avoiding phone scammers.
My Lords, a few months ago, I got a phone call saying that I had won £50,000 in a competition that I had never entered. All that I needed to do was to give them my date of birth, my national insurance number and my bank details. They said that they had my home address, so I said, “Well then, pop a cheque in the post—you don’t need this information”. The phone was soon hung up, but I am still waiting for the cheque.
The serious point is that people are ripped off by these criminals. What are the Government doing to ensure that our laws are as robust and up to date as possible and, when the perpetrators are based abroad, what are we doing with our foreign partners to sort these criminals out?
I apologise on behalf of the Government that the noble Lord has not received his cheque yet. It may be in the post, as they say. In terms of what the Government are doing on this very serious issue, which has received publicity in the run-up to Christmas, when some 75% of people will undertake online sales, it is very important that people think of their own security. In preparing for this Question, I was thinking that the system is very complex and difficult to remember—but it is incredible, the audacity of people ringing up and asking for PIN numbers. Amazingly, people actually do give them. Part of it is law enforcement, but another aspect is having a bit of common sense in dealing with our security.
My Lords, that is a very good question. That is part of where we all have responsibility to assist those people with dementia to protect them. But there are some sensible steps that can be taken in ensuring that payments made by people through direct debit cards or direct to bank accounts go through approved payment mechanisms such as major credit cards or PayPal.
My Lords, does the Minister agree that one question that arises from my noble friend’s original Question is how the people who contacted him got hold of his telephone number in the first place? Does he also agree that the systems that are designed to prevent the sort of calling that results in people having to take that sort of call are extremely inadequate? It would be very helpful if we could have some information about how they are to be strengthened.
It is relevant in this regard—that you can go online, as I did this morning, and in five steps put in your mobile telephone number, and it will then be removed from the mass-mailing contact numbers that are often the first port of call for many of these phishing and vishing exercises.
It is very difficult. Sometimes they are using data that were provided before the person delisted from the system. That is something that Ofcom is looking at, and the Government are engaging with Ofcom in that matter, but it is an ongoing problem that we will have to live with.
Why are local authorities now asking people to give all this personal detail when they are registering to vote? If it is voluntary, you either do not give it or you do—and I suspect that a lot of people are giving too much information, which the local authorities proudly say that they are selling. I cannot understand it.
As we know, a joint declaration by the UK banks, supported by the police, has been issued to make it clear what kind of information the banks would never request over the phone. Will the Government be taking any action to help spread that message, particularly to older people, who seem especially vulnerable to this sort of scam? Secondly, has the number of officers and civilian staff in local police forces engaged full-time in fighting the ever rising incidence of phone and computer scams and fraud increased or decreased over the past three years?
The number of individuals tasked with looking after cybercrime in the National Crime Agency has significantly increased, and that is mirrored by regional operations. We are working with various organisations, including the Financial Ombudsman Service and Ofcom, which we have already talked about. There is also an online facility at actionfraud.police.uk, where people can report suspected frauds. All those help in the intelligence-gathering operation. It is more difficult dealing with people who are not familiar with online operations, but perhaps that is where family members and friends can gather round, as they do in the instance of dementia, to help and protect those they know and love.
My Lords, could the Minister investigate how the Conservative association in the City of Westminster got my name and address? I am not on the electoral register, but in a communication addressed to me by name at my London flat I am being invited to join the Conservative Party. I do not know where they got those two details from, because I am deliberately not on the electoral register. The noble Lord’s party is wasting a lot of money inviting me to join.
Business of the House
Motion on Standing Orders
My Lords, I do not want to detain the House, but may I ask my noble friend if there will be another opportunity to debate the Autumn Statement? Does she really think that it is acceptable for speeches to be limited to five minutes on such an important subject?
My Lords, yesterday we repeated the Autumn Statement and had an opportunity for questions to my noble friend on that Statement, and now we have the debate today. We have had frequent debates on the economy, and I would expect to see that continue. I am not in a position to confirm when there will be another debate, but I am pleased to see that there is a great deal of enthusiasm for today’s debate. I wish everyone participating in it a very successful debate.
Business of the House
Timing of Debates
Motion to Take Note
My Lords, as we near the end of this Parliament, and on the back of the Autumn Statement, I am pleased to have this opportunity to appraise both progress on growth in the economy and the support that the Government are providing for business. But first, stealing thunder springs to mind. I am grateful to my noble friend Lord Borwick, who otherwise might have led this debate but unavoidably cannot be in his place. I also think that much of your Lordships’ thunder may be stolen today by the maiden speech of my noble friend Lord Rose of Monewden. I feel sure that his words of wisdom, honed by so many years of distinguished service in business, will provide a certain magic and sparkle. I can only assume that this is it; this is his Plan B.
The robustness of the economy and the opportunities for government to give resources to vital projects or services are inextricably linked. It is only because of a strong and growing economy that we are able to fund vital public services and major infrastructure projects. That is why it is so pleasing that my right honourable friend the Chancellor has been able to announce an essential annual £2 billion front-line boost for the health service, where expected increasing demands has put the ability to deliver at point of need under strain. That is why there is room to provide £15 billion to fund 100 projects, of which more than 80 are new, from improving links to the port of Liverpool, upgrading the A1 up to near the Scottish border, constructing the Stonehenge tunnel and in effecting the so-called “smart” conversion of the M62. That is why there is funding available for other major projects, such as £200 million for the proposed Manchester science research and innovation centre in the northern powerhouse and a £100 million housing boost for the second garden city at Bicester, that great centre for retail near to where I live.
This is welcome news because such projects are of national importance but also generate growth for local communities. They provide more jobs for skilled labour around the UK, including for the north-east and north-west, some of the supply for which will emanate from the new apprenticeship and the university technical colleges. This positive news builds upon the growth deals announced in July, including the city deals in 26 urban areas and support for the 39 local enterprise partnerships, with the provision of £6 billion-worth of cross-sectoral funding for transport, housing and business support and, of course, skills projects.
Growth and the health of business are important for every individual around the country because the ability to create jobs and gain new skills gives families greater financial security, opportunity to increase their spending power, more hope to plan for their careers, and it allows them better to realise their own personal plans and ambitions for the longer term. So, to be effective, growth must impact the employee, too. The news yesterday of the rise in the personal tax allowance to £10,600 next April is a direct boost to net pay. My right honourable friend the Prime Minister has pledged to raise this further to £12,500 by 2020. That is why I welcome the Autumn Statement which builds on these important values and ambitions and looks well beyond this Parliament to increase prosperity right around the country.
According to the ONS, growth since 2010 has seen the creation of more than 2 million private sector jobs, leading to the UK reaching a record 30.79 million employment level, and 1.8 million apprenticeships have been created. The UK was the fastest growing economy in the G7 in 2014 and is predicted to be the fastest in 2015 after the US. Annual GDP growth is now a confirmed lively and sustainable 3% for 2014, with 2015 predicted to be 2.4%, with marginally slower growth, primarily due to the continuing crisis in the eurozone and some other key export markets.
However, competitively, the UK is in a much stronger position, having grown 2.5 times faster than Germany but, less surprisingly, more than seven times faster than France. Some of the reasons for such strong growth stem from 2012, when the industrial strategy was launched by BIS. A strong and lasting foundation was built, with the emphasis and impetus placed on 11 key sectors, and with a £600 million boost to support eight key technologies. It was designed as, and remains, a long-term strategy to stretch well beyond this Parliament, with manufacturing and exports set to play a bigger role in rebalancing Britain’s economy.
To aid this, the Government in 2013 doubled the annual investment allowance to £500,000, meaning that businesses would not pay tax upfront for their investing in the future. Government lending to exporters was doubled then, while cutting the interest rate on export loans. It is therefore encouraging that since the Budget the OBR states that it has now revised upwards, from 4% to 27%, its estimate of business investment over this Parliament. But on exports, there are challenges. UKTI has taken splendid strides in reaching beyond the depressed eurozone into many new overseas markets, such as in Africa and Asia, with promising signs for securing contracts in Mexico and Colombia, for example. In April 2014, UK organisations won four new contracts worth £1 billion to establish 12 technical and training colleges in Saudi Arabia. Growth has to come primarily from selling our goods and services overseas, and our 40-plus ambassadors, envoys, and overseas embassies and high commissions are working well as a team to make this happen. It was pleasing yesterday that an extra £45 million package has been made available for exports. Can my noble friend the Minister say how and where this money will be spent and give a brief update on the prospects for our export markets?
Relentlessly pushing to increase productivity, to sell our goods abroad, on the back of the industrial strategy, is a key reason why the Government must continue to support business. To attract new markets, the eight great technologies—for example, robotics and energy storage—are in the forefront of research into innovation. They are supported by Innovate UK, which bridges that crucial gap between the universities and research institutions, and converts such ideas into marketable global products at the business end. This bridging is essentially aided by the nine catapults—for example, high-value manufacturing, cell therapy, satellite applications and transport systems. The importance of such initiatives cannot be underestimated as this will allow the UK to make its mark as the global base of choice, the centre of excellence for future technologies, making products and components for global markets.
There is a fascinating project focusing on the development of autonomous vehicles, interconnecting smart technology and the “internet of things”, robotics, and sensor technology. Such innovations are nascent, but they are the future and require sustained funding. Yesterday, we heard that the UK is now ranked second in the Global Innovation Index, having been number 14 in 2010.
Manufacturing is now growing faster than any other UK sector, and faster in the UK than in any other major advanced economy. The High Value Manufacturing Catapult is a particularly vital ingredient for such growth. Its ultimate aim is to more than double the contribution of the manufacturing sector to the UK economy. With an innovation order book of in excess of £218 million, industry demand for the services of the HVM Catapult is clearly strong. So I am delighted that £89 million has been designated further to fund this, spurred on from the recommendations of the Hauser review. A direct benefit is seen in the development and manufacture of fan disc and fan blade technology for Rolls-Royce. This has resulted in two new production facilities in this country—in the north-east and Yorkshire—generating hundreds of high-quality jobs. Can my noble friend give the House an absolute assurance that funding for the catapults will continue as a priority?
It is, of course, not just big business that drives growth. I am pleased that the Autumn Statement has placed an important emphasis on small and medium-sized business with the unlocking of £1 billion-worth of support. Britain is once again a nation of entrepreneurs. It is a well worn truism but worth repeating: small businesses are the engine room of the economy. They now account for 60% of employment and nearly half—47%—of turnover. It is very promising that around 20% of small businesses say they want to grow significantly. At the start of 2014, there were a record number of small businesses at 5.2 million—up 330,000 on a year ago. It is the first time that the figure has exceeded 5 million. It is the entrepreneurial spirit in the individual that is particularly prevalent: 7.3% of working adults were actively involved in starting a business last year. It helps to explain why last year 500,000 new jobs were created.
This is not in the Autumn Statement specifically but in a report. Emerging from the generic description of SMEs, high-growth small businesses are highlighted for the first time. They are defined as enterprises with an average annual growth greater than 20% over a three-year period and with an annual turnover of between £1 million and £20 million. Promising statistics on these HGSBs have been published by Octopus Investments on behalf of the Centre for Economics and Business Research. HGSBs represent only 1% of total business assets but were responsible for 68% of employment growth between 2012 and 2013. For the past year, this meant that 5,000 new jobs were created per week from as few as 30,000 businesses and there was an 18% growth in this sector between 2011 and 2013. More pleasing is that two-thirds of these businesses are based outside the south-east.
However, the report cited two significant barriers to growth. Skills shortages were highlighted by one in five HGSBs, in particular in science, engineering and technology. The second, an old chestnut, was access to funding. Some 25% of the HGSBs stated that borrowing was “difficult” or “very difficult”. It is noted that net lending from the banks fell by £300 million in the second quarter of 2014. Venture capital trusts, enterprise investment schemes and angel co-funds, for example, remain critical backstop funding sources, in addition to the successful UK AIM market. However, through the British Business Bank, yesterday’s extension of the enterprise capital fund programme will provide £400 million, with the guarantee of new lending of up to £500 million for SMEs. That is most welcome.
A strong economy allows for greater flexibility in reducing taxes for companies and individuals, and in making businesses more competitive. We welcome the review of business rates for 2016, as well as the doubling of small business rate relief for another year, the strengthening of the entrepreneurs’ relief, the social investment tax relief and the increasing of the R&D tax credit for SMEs right up to the maximum allowed. On tax, and with my old intellectual property hat on, can my noble friend the Minister update the House on the status of the tax advantage on the patent box? Secondly, how satisfied is he with businesses’ ability to access finance? What more can be done to encourage the banking sector to stimulate growth and productivity? I welcome the measures in the Small Business, Enterprise and Employment Bill that will take further steps for banks to be more transparent in their lending policies. But, as the Chancellor was at pains to point out, there is much more to do. Of greatest importance is the need to redouble our efforts to continue to tackle the deficit.
I return, finally, to what also matters: the individual, the employee and the benefit to him and her from business growth. Interest rates remain at an all time low, but wages still lag behind inflation in many sectors. The signs for individual pockets becoming deeper are encouraging: 85% of the working population are in full-time work, the claimant count is down 23%, the tax threshold is raised at the lower and higher rate levels, and the OBR has significantly revised inflation downwards and is predicting that wage growth will rise above inflation from next year for the next five years. Already, those who have been in work for over a year are experiencing a 4% growth in their wages. Even oil prices are reducing. We are earning and growing our way back to prosperity, which is the right way.
A journalist wrote last week that the Prime Minister and his party,
“need to draw the spotlight away from Nigel’s saloon bar and back to Dave and George’s repair shop”.
This is correct, and, because of the deficit, I believe that “repair shop” is still the right term to use. This Autumn Statement allows us to be safe in the knowledge that we have the stimuli, with the right spanners and the right workforce in place, to effect not just a patch up job but to continue a quality repair job which must be sustainable for the UK in the long term. I beg to move.
My Lords, I warmly endorse what the noble Viscount said about the economic importance of small businesses. May I also say how much we look forward to the maiden speech of the noble Lord, Lord Rose?
In responding to questions yesterday, the noble Lord, Lord Deighton, said with refreshing candour:
“I fully accept that this country has a long-term productivity problem”.
“earnings have not recovered as fast as we all would have wanted … because the economy recovered more slowly than we expected … that explains why it is taking longer to get the deficit down”.—[Official Report, 3/12/14; col. 1337-38.]
The Minister sums up the weakness of government policy over the last four years: the failure to make much impact on productivity, reflected in particular in poor export performance; too few high-growth companies; a record balance of payments deficit; and average earnings still far below their 2010 level in real terms.
So the key question is: what impact will the Autumn Statement have on productivity? The measures on science and support for postgraduate students are welcome but the word virtually absent from the Chancellor’s Statement was “skills”. Every recent business survey of obstacles to growth highlights a skills shortage—in particular, the acute shortage of technicians. To tackle this, we need, in particular, a transformation in the number and quality of technical apprenticeships, by which I mean far more school leavers and young employees with good literacy, numeracy and social skills going through an intensive work and training route, leading to reputable technical qualifications, yet this is not happening.
The Government, and the noble Viscount in his speech, parade big figures for the growth in apprenticeships, but these largely involve older employees doing short work-based training courses and did not even count as apprenticeships until the Government reclassified and renamed them in 2010. Meanwhile, the number of apprentices under the age of 19 has been falling, the number in their early 20s has barely risen, and a high proportion even of these apprenticeships are of short duration and low quality, while the proportion of employers offering apprenticeships of any kind remains pitifully low.
Until this skills crisis is addressed systematically, productivity will remain poor and the underlying cause of much of the concern about immigration will continue —namely, the shortage of good employment with training opportunities for the two-thirds of our young people who do not go straight from school to university.
In my remaining minutes I want to comment on infrastructure, which is critical to long-term productivity. The single biggest infrastructure challenge facing the country was ducked by this Government in 2010—the expansion of hub airport capacity in south-east England, supplementing our most important port for goods and business people: Heathrow Airport. Heathrow has a big sign outside saying “full”. On this, we are still waiting for an independent review, which may or may not chart a viable way forward in a year’s time. There have been five years of delay, with seriously negative economic consequences.
In his remarks yesterday, the noble Lord, Lord Deighton, lumped public and private investment together to suggest that overall infrastructure investment was fine and we need not worry. This week we have had from the Treasury a long list of proposed road and flood defence schemes. However, although I pay tribute to the noble Lord’s work in driving many schemes forward—particularly HS2—the Government have performed more U-turns on road investment than a hapless driver following rogue sat-nav diversions. There was a mass cancellation of schemes in 2010, followed by the reinstatement of some in 2012, then this week’s list—lots of promises for the future. Meanwhile, far too little has actually been built—or even begun—in the five years that the Government have had to get things done. The same is true of flood defences and energy.
I should also note that HS3, which the Chancellor rightly highlights as vital to the northern powerhouse, is still only a slogan. A year after he announced the upgraded east-west rail scheme between the northern cities, and five years after the previous Government started work on the electrification of the Liverpool to Manchester line, which is the first section of the east-west link, there is still no plan setting out the upgrade projects from Manchester going east to Leeds and Hull, with costs and timelines, without which HS3 is just words and a press release. When he responds, can the Minister tell us when the project plan for HS3 will be published and by what date HS3 will be completed?
Housing supply is the gaping infrastructure hole at the heart of both the Autumn Statement and the Government’s record. The coalition is building fewer than half the number of homes needed just to keep up with population changes, and the Prime Minister has presided over the lowest level of housebuilding in peacetime since the 1920s. The announcement of a new garden city in Oxfordshire is welcome but it is not a substitute for the new contract needed between local authorities, central government and the housebuilding industry to double the rate of housebuilding.
Those are just some of the challenges facing the country on which Ministers are either silent or complacent. It will take a Labour Government to provide answers and to deliver.
My Lords, this is a welcome, if short debate. We are very much looking forward to the maiden speech of the noble Lord, Lord Rose, with his extensive business experience, and to his comments on the Statement published yesterday.
My noble friend, in opening the debate, outlined the many positive aspects of the Autumn Statement, and did so quite extensively. I do not want to follow him, but from these Benches I very much want to welcome the £150 million that has been promised to mental health expenditure, which we have championed, particularly in recent times. I also welcome the £100 increase in personal allowances for low and middle earners. This has had a major impact on low earners in this country in the programme of increases in personal allowances that have been made. This further increase will help those on low pay.
I also welcome from these Benches the removal of national insurance for apprentices under 25. That will undoubtedly encourage many firms to take on more apprenticeships, and that massive expansion and improvement in quality will, I hope, continue. I welcome the infrastructure spending and the roads programme, as capital expenditure is vital to the long-term productivity improvement and long-term benefits of the economy.
I also mention the postgraduate loans that have been introduced. This has been a gaping hole in the provision of funds for students, and those loans will make an enormous impact, just as the other loans have, on student numbers in our universities. The final thing that I would mention, which my noble friend touched on, is the whole industrial strategy being pursued by BIS. It has had an enormous impact and is very much welcomed, particular by manufacturing industry, and is helping to rebalance the economy in the way that everybody in this House wants to see.
When it comes to the balance of the Autumn Statement, I have some anxieties. I did not see whether the Chancellor or the Chief Secretary had their fingers crossed yesterday, but in many ways it is a fingers-crossed Autumn Statement. It is tremendously important that confidence is sustained, not only in the bond markets of the world but in the many businesses and institutions throughout the world that will be investing in this and other economies. I hope that the Autumn Statement will help to sustain that confidence in a way that will keep investment going. Those of us who have been involved in business know just how important confidence is in deciding to invest millions or billions of pounds in projects. Confidence is vital and I hope that the Statement will keep confidence high.
There is no doubt that the economy is growing at an incredible rate. To put on 2 million extra jobs—more than the whole of Europe combined—is tremendously consoling to somebody like me from the north-east, where we still have the highest levels of unemployment in the United Kingdom. It is an incredible achievement by the Government, and it is that growth in the economy that is sustaining the confidence to which I have just referred. However, the forecast cuts in expenditure that have to come in the next Parliament are enormous, and I am not sure that people outside this House, or even in the House, have fully understood the scale of the proposed cuts, which we need to think about very hard.
Under the proposals, the Foreign and Commonwealth Office will have had a 65% cut in spending. It is proposed that the Home Office should have a 46.5% cut in spending, and that BIS will have a cut of 30%. If those departments are going to face cuts on that scale, it will cause major difficulties for their own services and for the services they provide. Inevitably it raises a question about the ring-fencing of all departments, particularly the National Health Service, if the cuts are to be sustained.
The only hope, of course, is that growth really takes off not only in the economy generally but in the tax revenues that are coming in. That will enable future Chancellors not to have to make cuts on the scale that is being suggested. We need to be very cautious about whether we can sustain either ring-fencing or should make cuts on that scale. Anyone who thinks about this will see that they are probably impossible to achieve. That is why I described the Autumn Statement as a fingers-crossed one. If we get the increased revenue, we will not need to bring in some of the cuts that are causing such great disfavour.
My Lords, I shall begin by saying that I agree very strongly with my noble friend Lord Wrigglesworth. In no way does it make sense to continue with ring-fencing in the next Parliament. All public expenditure has to be judged on its merits, whichever department happens to be responsible for it.
In the short time we have, I do not want to talk about the particular measures in the Autumn Statement—I will discuss wider issues—save to say one thing. I know that my right honourable friend George Osborne is very anxious to go down as a tax-reforming Chancellor. This year, he has lived up to that with the reform of the annuities system in the spring Budget and the reform of the stamp duty system in this autumn budget—because that is what it is. Both of them are substantial and, in my view, welcome reforms.
On the wider issues, nothing is perfect in this wicked world, but by any reasonable standards the British economy is a success story. It is a success story despite, I have to say, the difficulties of conducting economic policy in coalition with my noble friends the Liberal Democrats. It has made the task immensely harder and I hope that this will not continue and we will be able to conduct policy untrammelled by this complication; it is difficult enough without them. It has also been a success story despite the public deficit having been halved. It is still too big but it has been halved, which puts into perspective the views of the naive Keynesians, some of whom are in our midst. I welcome in particular the consensus we now have between the two major parties that it is important to continue to bear down on the deficit. The two parties may have different ideas about how this should be done, but there is a consensus that it needs to be done.
One of the signs and proofs of the success of the British economy is to be seen across the Channel. The difference between the British economy and the economies of the rest of Europe is striking. There are two main reasons for this. One is that we are not members of the eurozone, which is a disaster. I regret that because I do not wish our neighbours to be suffering under the regime, but there it is. The other reason, which is probably more important, is that the massive range of supply side reforms brought in by the Conservative Governments of the 1980s have made the British economy far more flexible than any other economy of Europe. Fortunately, most of those supply side reforms have stuck. They have endured because even the Labour Party can see that they were successful in the 1980s and have remained a great strength for this country.
Looking ahead, much has been said about the warning lights flashing about the world economy. The world economy is tremendously important to a major trading nation such as ours, but it is very much a mixed picture. There is both bad and good. On the bad side, there is the eurozone, which I mentioned a moment ago, and also the problem of Japan going back into recession despite a massive Keynesian boost. The good is that the emerging world is still powering ahead. Obviously, no one would expect China to continue at the huge rate of growth it was achieving, but it is still growing and so is much of the emerging world. The other thing is the reduction in the oil price, which is hugely beneficial.
What do we need to do to continue with our success? There are two areas of importance. I have not got much time so I will mention one just briefly. We have to do far more to clean up the British banking system, which is so important to us as a great world financial centre and to the rest of British industry. The other thing is that we have to radically change our energy policy. We have an absurd energy policy, predicated confidently by DECC and its Secretary of State on an inexorably rising oil and gas price. In fact, the price has fallen and since the things that made it fall continue to exist, it is likely to continue to be weak. We have moved from a market-driven energy policy to one of state control of everything—and largely unaccountable state control. It is damaging for British industry, damaging for the poor and it is deterring investment in electricity and energy generally. We have to move back to a market policy for energy.
I do not have time to yield to interventions. That is the nature of a debate in which we are limited to five minutes each. We cannot accept interventions. But my time is already over so I will end by saying that I warmly commend my successor-but-five, George Osborne, on his Autumn Statement yesterday and on his stewardship of the economy over the past few years.
My Lords, I, too, was disappointed that in the Chancellor’s Statement we heard hardly anything about productivity. In fact, more has been said in this House than in the other place—and it needs to be said. In the past six years output per hour in this country has fallen by 3%. In the US it rose by 7.6%. In Germany, France and Italy it also rose. I assume that the Government’s view is that weak productivity is the price worth paying for the kind of labour market they have created.
I put it to the Minister that productivity determines our standard of living—our standard of living has always risen as productivity has risen. By neglecting this, the Autumn Statement is condemning us to yet more stagnation in our standard of living. Are the Government just hoping for the best? Are they hoping that as demand strengthens so our productivity performance will improve? I put it to the Minister that this is a gamble the Government should not be taking. Instead, the Government should be taking action because the benefits of rising productivity—equally shared between employer and employee—benefit us all, including the Government.
During an Oral Question on welfare on 24 November, I asked the Minister how much would be saved in housing benefit paid to those in work if their productivity went up by 1% and was equally shared between employer and employee. The Minister did not have a number, but he thought it was a good idea. A couple of days later I received a letter from a professor of economics with a calculation. The answer is £210 million—a nice contribution and it could even pay the bedroom tax.
The Government’s policy of subsidising low pay to encourage employment has certainly helped raise the number of people in work in the short term, but it has downgraded the quality of jobs. Surely, this is one reason why our productivity has been stagnant: most of the jobs created since this Government came to power have been part- time or in the self-employed sector. Many of these jobs are in an expanding service economy that has lacked the strong investment and skills needed to raise productivity.
The noble Viscount, Lord Younger, spoke of the rise in GDP, but GDP considers investment and consumption to be the same. It does not differentiate between money spent on research or new equipment and money spent on going on holiday or getting your hair cut. Indeed, GDP also includes value-destroying expenditure, like pollution or traffic jams: it does little for productivity. The living wage movement has given a number of examples where higher pay has actually bred higher productivity. The Low Pay Commission has said that raising the minimum wage, alongside improved training, could even help raise the UK’s productivity.
Yesterday, the Minister referred to productivity rather indirectly, through infrastructure and lower taxes; he even asked for suggestions. My noble friend Lord Adonis has spoken of skills, and there he was absolutely right. I would be happy to oblige further, but I see that my time is nearly up, so it will have to be on another occasion. Perhaps the Minister thinks that getting business to raise its game and be more productive is anti-business or interference. It is not: it is pro-business and pro a business community that wants to raise its game, improve its performance and improve its engineering and technology. We have to ensure that rising productivity results in rising real wages for all, not just for the top earners. This Autumn Statement is a missed opportunity to change our focus from short-term rises in GDP fuelled by low-paid jobs—subsidised by the taxpayer and yet more credit—to lifting our ambition to raising the standard of living of us all through productivity. This is where the next Government—a Labour Government—will have to turn their attention.
My Lords, it is a pleasure to add to others’ my welcome to the noble Lord, Lord Rose, in eager anticipation of his maiden speech. The Statement of the right honourable Chancellor of the Exchequer has been welcomed and applauded in some quarters and criticised in others for its emphasis on what it means for individuals and families, as well as for the national economy. I am glad to see specific, though limited, encouragement for some individuals and welcome support for some often overlooked but important groups in society. The most noticeable and eye-catching announcements yesterday highlighted the changes to stamp duty, ISAs, fuel duty and air passenger tax. For some in our communities, these will be welcome news after an extended and extending period of fiscal tightening and often reduced disposable income. There will, however, be changes—as those on these Benches serving all parts of England know—that will make little or no difference to many who would echo the Chancellor’s wish to back the aspiration to save, work and own a home.
The dignity of work—with the capacity to provide for a family and save for the uncertainties of the future—and the ambition of home ownership remain beyond many. I shall look, and I am sure that I am not alone, for the benefits of the anticipated economic growth to reach those who may now be among the welcome record number in employment, but are still dependent—despite a full-time job—on benefits. The Chancellor’s new target of a personal tax allowance of £12,500 is undated and would just take those working full-time on minimum wage out of tax. Even then, at some future unspecified date, there would indeed be no income tax for those on the minimum wage but still national insurance contributions payable on income above just less than £8,000—an income tax of 12% by another name. Surely the time has come, for the sake of honesty and clarity, to name the reality and not perpetuate a fiction. I echo the conviction, used in a different reference last night, that we challenge this candour deficit.
The Chancellor’s confidence that we,
“stay on course to prosperity”—[Official Report, Commons, 3/12/14; col. 327.]
is not yet the personal experience of many known to me and to the parishes and clergy in my diocese, including the urban and rural areas of coastal south-east Hampshire and the Isle of Wight.
There is much to welcome in the less publicised parts of the Statement. I know that many in this House will delight in the refund of VAT on expenditure by hospices. The taxation of such hugely valued provision and care, predominantly funded by voluntary donations, has long been overlooked and been for many of us indefensible. I welcome, too, the extension of the £2,000 employment allowance to carers, who do so much for family members, friends and neighbours in sickness and disability.
With less individual significance but of great importance to community and business, I am grateful to the Chancellor of the Exchequer for granting £15 million towards the repair of roofs on listed places of worship. This is recognition of the importance of our church buildings, many of which are at risk, to our national heritage. They are a tangible link with our past and very often a focus of local identity. Today, they are increasingly used not only for worship but for wider community activity, and are visited and enjoyed by a large and diverse number of people.
The support scheme for first-time exporters, the expansion of the Funding for Lending scheme with its focus on smaller firms, and at least a partial limit on the amount of past losses banks can off-set for tax purposes against future profits are important steps in encouraging small and medium-sized enterprise in our nations and ensuring that the biggest and strongest pay their proper share of what we should together fund.
This Autumn Statement sets a high level of aspiration and raises the hopes of many. I know your Lordships will understand if I conclude by saying that I pray, and not just hope, that, as we approach further substantial cuts in public spending, the aspiration for the nation will be enjoyed by the many and not just those who now benefit from the welcome but modest steps that the Chancellor has taken.
My Lords, I am delighted to follow the right reverend Prelate, particularly with his responsibilities in Portsmouth, since I have a special affinity with the Isle of Wight as Baroness Bottomley of Nettlestone. I strongly endorse his comments about assistance for hospices. So many of us have campaigned for so long for that small measure, and it is welcome to see it achieved. On his comments about carers, I worked for many years with the late Lady Seear on what was the precursor to Carers UK. Even the smallest change in assistance for those caring seemed impossible—like getting blood out of a stone—so this is another welcome new development.
I also agree with the right reverend Prelate about the dignity of work, but the fact that 1,000 new jobs a day have been created since this Government came to power is an extraordinary achievement. I am not Mary Poppins, but the success of the changes in very difficult circumstances in the UK compared with the rest of Europe—France and Germany have been mentioned, while Japan is in recession—is a remarkable achievement. A great deal of tribute should go to the Chancellor. I do not say that only because I am sitting next to his father-in-law and feel that if I misspoke I might get into trouble with my neighbour. It is a remarkable achievement.
I pay tribute also to the Commercial Secretary. How many appreciate that this tremendous investment in infrastructure has been very much the responsibility of my noble friend Lord Deighton since he came into government? When I was a Minister in 1987 and again in 1992, I solved the Stonehenge problem. We were going ahead. It did not happen. How many infrastructure projects have been stuck on the drawing board? The Commercial Secretary has brought particular skills to make things happen. The House should pay tribute to him for that work.
Most especially, I commend the priority given in the Autumn Statement to the northern powerhouse. I speak as the Chancellor of the University of Hull and also, I am delighted to say, the Sheriff of Hull. The noble Lord, Lord Mandelson, is the high steward, but I am the sheriff. I agree with and endorse one specific comment made by the noble Lord, Lord Adonis: when is HS3 going to arrive in Hull? It is exciting to see the recognition of the northern cities, the northern powerhouses. In the same way that it was rivers and waterways that brought prosperity to so many parts of the country, today it is rail and road. The only way we will restore the economic strength of those cities is through this substantial infrastructure investment.
I link that with investment in human intellectual infrastructure. The Autumn Statement at long last introduces loans for postgraduate studies, which we should all welcome enormously. It has been widely welcomed. Nicola Dandridge, chief executive of UUK, said:
“We support the government's recognition of the substantial benefits arising from postgraduate taught education, and the need for support to ensure that some students are not priced out of further study”.
Don Nutbeam, vice chancellor of Southampton University, said:
“For many professions, a postgraduate degree is essential. Without affordable access to postgraduate education, many professions were simply out of reach of those who could not afford to pay”.
The NUS vice-president called it,
“a major step in the right direction”.
That is really important and very exciting.
I also celebrate the fact that the Francis Crick Institute in London will have a brother in the Sir Henry Royce development in Manchester. That is very exciting. I see my noble kinsman, the noble Lord, Lord Hunt of Chesterton, in his place. Our shared grandfather was at the age of 32 the principal of Central Manchester College of Technology, and we have always been brought up to have huge respect for the intellectual capital in that area.
Let me speak briefly about the National Health Service. A flourishing National Health Service facilitates economic growth and business opportunity. A healthy population with readily accessible health treatment, care and prevention is critical. The additional funding is hugely important. The £2 billion is very welcome, using the fines from the banks to support GP premises. Like others, I am greatly looking forward to the maiden speech of my noble friend Lord Rose of—well, an unspeakable name, but it is near Saffron Walden—because I hope that he will share with us how in the commercial world across the country people have to transform, reinvent and re-engineer services. With our sacred cow and much loved institution, we must translate the way in which services are developed.
This is a really encouraging Autumn Statement, and I support those who paid tribute to the Treasury team who made it possible.
My Lords, we seem to have achieved the best of all possible worlds: a Conservative Chancellor was determined to eliminate the budget deficit in one Parliament and has achieved his predecessor’s idea of halving the budget deficit in one Parliament—so a Conservative Chancellor has achieved a Labour goal. We must welcome this but obviously it will take another Parliament to eliminate the rest of the deficit because life is never easy when you are Chancellor of the Exchequer.
In what little time I have, let me try to make sense of what is going on in the economy. As your Lordships may see, economics is very difficult because not only is it impossible to forecast, it is not even possible to tell what happened in the recent past. We have been told that our income was higher than we thought it was and that we had no double-dip recession—indeed, we had more or less continuous growth over the last five years. That is one fact. We also know that while employment has grown, wages have not kept up with prices and that therefore we face a problem with average real earnings. As my noble friend Lord Haskel pointed out, we also have a productivity problem.
The way to understand these things is, first, that the upgrade in national income was due mainly to things that are not visible in the economy. They are mainly abstract goods and services: this is not the old-fashioned idea of productivity, with a person working in a factory producing something physical. Our idea of productivity is very old-fashioned and the economy is moving away from that, so more or less when we talk about productivity we are really measuring only wages. In the public sector, the wage defines the product—but when you shift people from the public to the private sector, they get a lower wage because private sector wages are lower than public sector wages. Also, only a portion of the output counts as the productivity of the worker because there is a value added, which goes to profit.
So, first, the shift from public sector to private sector will lower productivity as calculated; whether a person is less productive or not does not really matter. Secondly, we have growth, thanks to IT, of jobs that are no longer contributing in any skilled way to output because a lot of what one would call the lower clerical jobs in retailing and elsewhere have now been replaced by IT. What people are doing is something further down the scale, in which productivity is bound to be low because there is not much work being done that involves skills.
These compositional effects of national income mean that we may be stuck with low productivity growth for some time to come: while income growth will happen, productivity growth will not. The first phase of this happened when a lot of manufacturing moved away from the UK and went to Asia. Manufacturing jobs declined, people went into services and productivity growth stopped. We will have a persistent problem of the tax receipts never matching up to the growth numbers—and if that happens, we will have to rethink how we are going to achieve the elimination of the deficit in the next five years. That is the bad news, as it were, but the bad news does not stop there. As far as one can see with what the world is going through, it is not just the UK but the eurozone, in particular, and the rest of the developed world. We used to call the other ones emerging economies. They have emerged and we are submerging, so the submerging developed economies are going to be in a low-growth, low-inflation environment for the next 10 or 15 years, as far as one can tell.
If that is going to happen in one of those long cycles, whoever is the Chancellor is going to have to come to terms with the fact that growth will be low. Maybe our growth will be higher than the world’s growth rate but it is not going to be 3% or 3.5%; it will be 2% or 2.5%. Given that, the budgets are going to be very tight, and even after we eliminate the deficit, there will be no room for any parties. As Crosland said many years ago, “The party’s over”. I think that the party will continue to be over.
My Lords, I do not have time to answer the disparagement by the noble Lord, Lord Lawson, of Keynesian stimulus. Perhaps one day we will be allowed to have a proper economic debate in this House in which we can pursue these issues further.
I will concentrate on one point: the Chancellor’s failure to meet his budgetary targets. Growth has been revised up to 3% this year, to be followed by 2.4% in 2015, then 2.2% and then 2.3% thereafter for ever and ever. My first point is that these forecasts are not worth the paper that they are written on because they are conditional on all sorts of unlikely things happening in that period. Their importance lies in the fact that they are the basis of his budget projections. In 2010 the Chancellor forecast GDP growth of 2.3% in 2010-11, 2.8% in 2011-12 and 2.9% in 2012-13. In fact the upwardly revised figures show that it was 1.6% in 2010-11, 0.7% in 2011-12 and 1.7% in 2012-13. According to the Chancellor the economy should have grown 8.2% compounded in that period, but in fact it grew by 4.1%. No wonder his deficit reduction plans went awry.
Agreed, it was not all his fault. Of course it was not; what happens to the budget is determined by what happens to the economy, and what happens to the economy is not all within the Treasury’s control. It is equally important to remember, though—here we do a little bit of Keynesian economics—that what happens to the economy is also determined by budgetary policy. That could hardly not be so, as government spending accounts for about 40% of GDP.
Ever since I started writing and speaking about these matters in 2010, I have been predicting that the Chancellor would not meet his budget targets. The reason I gave was that the pursuit of those targets in itself would slow down the economic growth on which their achievement depended. Why? Because it slows down the rate of spending in the economy, and growth depends on spending. The cuts have hit spending, and the spending has hit growth. So it is not surprising that the Chancellor finds himself with a projected deficit of £91.3 billion this year, when in 2010 he promised to balance the budget by the end of this Parliament.
According to the OBR, the discrepancy between the projection and outcome results from the “unexpectedly weak” performance of tax receipts. Perhaps it was unexpected only to the experts at the Treasury. In fact it was the logical consequence of growth being so much below what was expected between 2010 and 2013, and of what has been happening to the labour market since then. The Government have congratulated themselves on the fall in unemployment. We would expect falling unemployment to increase tax revenues and reduce public spending—but not if unemployment is replaced by jobs that pay so little that those who fill them pay no direct tax and their income has to be propped up by benefits. For example, the number of housing benefit claimants who are in work has doubled since 2009.
So why has the British economy been growing at all? The answer is very largely because there are more people in the country. The population was 62.3 million in 2010; today there are 64.1 million, 2 million more, virtually all of them of working age, and more people are coming in every month. Any economy will grow if it has more people working. The only relevant welfare measure—the measure by which any Government deserve to be judged—is GDP or national income per head. Our GDP grew by 4.1% between 2010 and 2013, but GDP per head has grown by only 2.3%. Real wages have fallen between 5% and 10%, and the typical earner is £1,600 a year worse off.
In conclusion, we are left with the prospect of another round of brutal spending cuts with the rolling five-year deficit reduction programme rolling ever further into the future. With productivity growth likely to be so weak, for the reasons pointed out by the noble Lord, Lord Desai, the Chancellor’s new projections will prove as delusional as his previous ones. It sometimes helps if the people running economic policy do know some Keynesian economics.
My Lords, I speak, for the first time in this House, with both nervousness and trepidation. Before addressing the House from the perspective of a lifetime in shopkeeping, I offer heartfelt thanks to everyone for the very warm welcome that I have received in the few weeks since my introduction. Like many newcomers to this House, I, too, have found myself on more than one occasion being gently intercepted and redirected on my second or third passage round a particular place, always in the most courteous and helpful way. I also extend my sincere thanks to my two sponsors who introduced me to this House: the noble Lord, Lord Myners, and the noble Baroness, Lady Lane-Fox. Particular thanks are also due to my noble friend Lady Noakes, who has been endlessly generous with her time and both wise and firm in her advice.
That I am in this House at all is a matter of amazement to me, and of considerable amazement to my friends and colleagues. It is a matter of amazement also to my father, but one of considerable pride; for I am one of those who would not have been here at all if my father had not been plucked from war-torn China in 1938 by a Quaker spinster lady. She brought him to England at her own expense, educated him and sponsored his British citizenship.
People often ask me how I planned my career. In truth, I did not. Following a failed attempt to enter medical school I wrote to more than 50 companies seeking employment. Only one replied—Marks & Spencer. It also offered me a job, so there was no margin for error there. My new employer set about instilling in me most of the business values that I have tried to follow over the past 40-plus years It was not all plain sailing and it was not all fun, but it must have been pretty effective because it worked for me and for the four other Peers from the same stable at Marks & Spencer who have preceded me. After 17 years I moved on to various other retail chains in other pastures, learning new skills under some very inspirational leaders, returning to my old employer at the end of my full-time career.
Your Lordships know that retail is a competitive and dynamic trade and a very important part of our economy. Indeed, it is the largest private sector employer in the country. Attention to detail, quality, value, service, innovation and trust are the keys to success, and we forget them at our peril. Staying close to our customers in this fast-changing world is also important. Successful retailing is about having your finger on the pulse of every trend, behavioural change and new technology, and anticipating what changes they will bring. The ability to react to these changes, in a world which is itself changing at an ever faster rate in a truly global economy, requires boldness, imagination and investment.
We in the United Kingdom are once again enjoying growth, because businesses of every complexion have continued to drive efficiency and deliver goods and services that are innovative and highly competitive. Our economy has seen real recovery, but it is potentially fragile. It is also highly dependent on growth returning to the global economy, particularly to Europe. Consumers and all businesses, be they retail, manufacturing or others, need to be able to plan for the future in an economic climate and landscape that encourages investment and promotes confidence.
I travel frequently throughout the United Kingdom, wearing various business hats, and I see clear signs that confidence is returning—and that is borne out by the statistics. We have had record business start-ups, and unemployment has fallen. These improvements are, in my view, the result of the tough but very necessary measures put in place over the past few years to create a business-friendly environment. However, the job is not done, and it is vital that we continue to keep providing the stable economic backdrop and the incentives necessary to finish the job and return the UK balance sheet to robust health.
Yesterday’s measures announced in the Autumn Statement are most welcome, particularly as we see some further faltering in the global economy. The measures announced further to invest in infrastructure and stimulate small business growth are right. The review of rates is to be welcomed, although here I must declare an even-balanced interest as chairman of Ocado, a wholly online grocery delivery business, and of Fat Face, a purely bricks-and-mortar business.
UK business has done an enormous amount to recover and regroup over the last few years. Now is the time to continue to invest and, to do this, business and government need to work together to ensure that our future prosperity is put in place by having the right incentives, right financing and right regulatory framework.
Confidence has always been a driver of business and investment, and lack of confidence is a big deterrent. Business needs an economic climate that encourages and rewards long-term investment. Investment today is our livelihood tomorrow—our future economic security. We have come a long way, but in this world, where so much of what happens is outside our control, we must have a firm hand on the tiller of what we do control.
My Lords, I welcome the noble Lord, Lord Rose of Monewden, to the House and congratulate him on an exemplary maiden speech. This is the second time this year that I have followed the noble Lord, as he left the board of Blue Inc earlier this year for me to join. He brings to this House a wealth of experience at some of the country’s leading businesses, such as Argos, Arcadia, Ocado, Booker, Woolworths, Fat Face and the Burton Group. As he said, he started as a management trainee at Marks & Spencer to rise to CEO and then executive chairman. In 2006, the World Leadership Forum gave him its Business Leader of the Year Award, but he survived that accolade. I am delighted to say that, since then, on leaving M&S, he has become involved in a significant number of start-ups and SMEs. So he brings to your Lordships’ House invaluable international business expertise, and we look forward to many future contributions.
I would like to lend my support to the package of measures announced by the Chancellor in the other place yesterday as further evidence that this Government continue to strike the right balance between fiscal responsibility, on the one hand, and measures to encourage growth and investment, on the other. Indeed, with the deficit down by a half, and projected growth of 3% this year—the envy of our peers in the developed world —on both measures we are succeeding. The Opposition have long said that we are cutting too far and too fast. Indeed, in 2012, the Leader of the Opposition said somewhat opportunistically that we should be more like France. He hailed the election of President Hollande, and gave a description of their first conversation:
“We talked about growth and austerity in Europe and how we can tilt the direction of where Europe is going”.
Well, that tilt has been tried in France and, as we now know, it has led to recession, higher unemployment and, this week, protests in Paris by business men and women frustrated at the unfriendly policies to business adopted by the French President, whose current low rating in popularity is matched only in the UK by his admirer the Leader of the Opposition.
Because we ignored our critics and stuck to our long-term economic plan, Britain is now growing seven times faster than France and we have created record numbers of private sector jobs in the UK. Unlike in other parts of the world, where finance and business continue to be vilified, this Government are encouraging investment, particularly in smaller companies. For example, I welcome the one-year extension of the Funding for Lending scheme to January 2016 and the additional help for the enterprise finance guarantee scheme of some £2.9 billion to small businesses, extended by a further £500 million.
When the banks simply will not lend, we need alternative sources of finance. It is a welcome development that, within the ambit of the British Business Bank, there will be an extra £400 million to support the enterprise capital funds programme. Support for SMEs does not end there; business rates, as the noble Lord, Lord Rose, said, remain a significant impediment to all businesses, but particularly small ones. So I am very pleased to see that small business rate relief will be doubled to 2016, meaning that 385,000 small businesses will continue to have 100% relief, and a further 190,000 will benefit from taper relief, which will be a great help to them.
However, we must also make sure that, as the economy grows, large multinational corporations pay their fair share in helping to get the deficit down. There can be little doubt that globalisation has completely outpaced and outgrown our system of national taxation and, as a result, global corporations are paying less and less tax while acting within the law. So we must change the law. As my noble friend Lord Lawson has said, it is pleasing to see that the Chancellor has taken such dramatic, innovative and radical steps in many areas, but particularly in taxing multinationals. I suspect he must have been listening to the debate in this House on the excellent House of Lords Economic Affairs Committee report, entitled Tackling Corporate Tax Avoidance in a Global Economy, led by my noble friend Lord MacGregor of Pulham Market. The noble Lord, Lord Rose, might be interested to know that by a happy coincidence, it was on that subject and in that debate that I gave my maiden speech.
The Prime Minister, through his leadership of the G8, has put tax evasion on the political map, and this Autumn Statement keeps it there. At a time when we have asked public sector workers to accept difficult pay freezes, it is only right that corporations and high net-worth individuals pay their fair share as well. The OECD is doing vital work in this area in trying to secure international agreement, but at some point one country has to show leadership, and I am proud to see that this is the UK.
My Lords, one phrase that, for me, leapt off the page in the Chancellor’s Statement was:
“In fact, the net contribution of the richest 20% will be larger than that of the remaining 80% put together, proving that we are all in this together”.—[Official Report, Commons, 3/12/14; col. 311.]
I thought that that took some brass neck—and then the Minister repeated it in his Statement yesterday. I assume that the Government are adopting the Boris Johnson approach to wealth and poverty: to paraphrase him, “The top 1% keep you lot in shoe leather and Sky television”. I can only hope that that strap line is played in the streets of Peckham, where I live, during the general election—and incidentally, I hope that the Lib Dems will be too ashamed to use it. To make a virtue of the country’s inequality points to a new school of PR, which I have not come across before. A report by economists at the LSE and Essex University has found that in the past four years there has been a significant transfer of income from the least well-off half of the population to the more affluent. If I had time I would deal with that in more detail.
On a different subject, why is there no mention of local government? I presume that it will suffer disproportionate cuts, similar to those in defence and the Foreign Office. No doubt any news will slip out quietly over Christmas. Local government is important, and we should be standing up for local government and its workers, not consigning them to the ranks of the disappeared. The same applies to the Civil Service. It is the lower-paid who need and use our public services. The Government pay lip service to the national minimum wage, but fail to enforce it. A quarter of a million people are paid less than the national minimum wage, and the Government have had four and a half years to deal with that. Putting £3 million into enforcement in their very last Autumn Statement does not impress.
As we have already been told, the Chancellor’s target to see debt falling as a share of GDP by 2015-16 was abandoned two years ago. Now the structural deficit will almost certainly grow, which means that borrowing could increase by a further £2 billion. The economics editor of the Times, Philip Aldrick, said this week:
“Having softened austerity in this pre-election year, breached his golden rules, taken three years longer than expected to eliminate the structural deficit and doubled the length of the austerity programme to a decade, questions should be asked about the chancellor’s credibility”.
The measures announced to crack down on tax avoidance by such companies as Google and Amazon may be welcome, but the revenues are difficult to estimate. My question is: if the Chancellor is relying on this income to balance his books, what are his estimated odds for achieving it?
The Government have promised to deal with the banks, yet despite government sweeteners, there is no evidence that they are changing their behaviour. RBS has had to apologise for misleading the Treasury Select Committee on profiteering from winding up companies, and the scandal of mis-selling payment protection insurance still haunts the financial sector. Banks have paid out £16 billion to people after 13 million complaints in seven years. A further £23 billion has been set aside for further claims. Time and time again we hear that most of these problems are caused by rogue juniors. Even if that were true—which I doubt—what does it say about the corporate governance of the banks? How much will it take to have a system which prevents these massive scams in the first place and saves the individual or small business money, time and unnecessary stress? Claims management firms have charged £155 million in commission in the past year to people applying for compensation. One company has made £40 million through its 39% commission on payments. Why is that not illegal?
Finally, we need to put a spotlight on the Government’s assertion that the gender gap is closing and poverty levels are falling. When the tide goes out, nearly everyone is paid less and it goes without saying that the relativities narrow. This is being touted as an example of government success. As I said earlier, the Government really do have a brass neck.
I add my congratulations to the noble Lord, Lord Rose, on his excellent maiden speech. We look forward to his future muscular contribution.
The Autumn Statement goes like this: the Chancellor stands up and says what a wonderful job he has done; the Opposition respond with a ritualistic attack. There is no sanction for the Government having missed all their targets. The “would-be Prime Minister” is not dismissed for showing basic economic illiteracy and the Prime Minister is not censured for his previous comment, “We are paying down Britain’s debts”.
Let us look at some of the promises made versus the outcomes achieved. We were promised a deficit of £35 billion this year; it is £100 billion. We were told that debt would fall to 67% of GDP next year; now the OBR tells us that it will be over 80%. At last the welfare beast was going to be slain with £19 billion of promised savings; instead spending this year will be the same in real terms as in 2010. We were promised that there would be restraint in public spending; this year it is 42.5% of GDP, higher than Alistair Darling planned in his final Budget, and next year it will be £732 billion which, accounting for inflation, is almost exactly the same as in 2010. Any one of these failures would be instantly sackable events in the private sector but bear no immediate penalty in democratic politics. As a businessman, it seems to me that in the political world there is a disconnect between words and deeds.
We can debate the Autumn Statement all we like but the reality of our country’s financial situation is this: government debt is now £1.4 trillion, double its level in 2010; unfunded pensions are double this amount; bank debt is even more; and private sector debt—mortgages, households, business—adds another layer. Then there is debt—off-balance sheet/private finance initiative—which politicians like to pretend is not debt, even though it really is. On any basis, our debts are 600% of GDP. This makes us one of the most indebted countries in the world.
Given this, it might be worth looking at the system which has produced these results. It strikes me that the skills a politician needs to succeed in a democracy are increasingly irrelevant to those required to run a country. In a media-obsessed world, voters want politicians with good personal appearance, likeability and communication skills and, of course, who promise nice things. In what way are these connected to running a country? What the country needs are skills in getting things done, managing people, finance and economics and, most of all, total honesty, the basis for solving all problems.
However, I do feel a certain sympathy for my colleagues in the other place. As we all know, in a modern democracy it is impossible to speak hard truths and get elected. For example, we all sense that the extra £2 billion which the Chancellor has promised for the NHS will not solve its long-term problems. It needs wholesale reform, but who dares say so? To say so risks the accusation of failing to support the NHS, or worse, of advocating its privatisation. This is the great hypocrisy of our times. People complain about the dishonesty of politicians, yet any politician who spoke the truth would be annihilated in the polls. “All truth is good”, goes the proverb, “but not all truth is good to say”. This is what Jean-Claude Juncker meant when he said, “We know what to do, but we don’t know how to get re-elected once we’ve done it”.
So our politics is stuck: benefits, votes, debt. Europe has 7% of the world’s population but 50% of its welfare spending. Is this sustainable? What happens if it is not? Over the past 50 years, voters have been given ever more benefits and public services. But here is the great paradox of our time—nobody is happy. People today loathe politicians—we can see it all around us and in other European countries—but no one questions the system in which politicians operate. People hate the practice but never question the theory. I wonder whether one day the Autumn Statement and tit-for-tat debate which follows will be held to serve no purpose, politicians will be held to account in the world of financial reality rather than that of electoral politics, it will not be possible to miss targets or spin figures, cliché and ritualistic attack will no longer be acceptable, and excellence, ability to deliver and doing things properly are held to be the greater virtues. Let us hope that, should that time come, it will not be too late.
My Lords, I enjoyed that speech. I join in welcoming the noble Lord, Lord Rose, and comment, which others have not done, that Marks & Spencer has always been a very progressive capitalist organisation. Indeed, one of its founders—Lord Marks, I think—used to contribute openly to the Labour Party, so it obviously knows that that party exists.
The Government’s Autumn Statement was, as expected, an occasion to announce further planning, further cuts in public expenditure and measures to make the UK a less fair and meaner society, which the Chancellor and, indeed, some Ministers seemed to relish, as we heard this morning. One can only be worried that these policies will continue. Over the relevant period, other countries such as the United States put more money into government. If we had had a Conservative Government from 2008 to 2010, doubtless these impacts would have been greater. Over the period in question, many people’s living standards fell and we now have food banks in the UK. Perhaps the one benefit of the Chancellor’s Budget is its provision of money to the churches so their roofs are all right while the food banks operate down below.
The main omission in the Statement is that there is no mention of the greatest fundamental risk to the future of the UK’s economy—that is, the threat posed by the UK leaving the European Union. That has not been mentioned this morning either. That seems to me quite extraordinary. If you were a trader seeking a loan or investment and, while seeking that loan, you did not tell your bank or backers that you were about to deliberately tear up the existing business plan and do something quite different, you would be considered grossly dishonest. Indeed, if you were a director of a company, I believe that you could well be prosecuted for not operating correctly. Perhaps this goes back to the point made by the noble Lord, Lord Palumbo. For example, I know that the noble Viscount, Lord Younger, who made an excellent opening speech but is not in his place, is firmly pro-Europe, although he did not mention that.
However, I want to make one or two positive points. I am sure that we all welcome the financial help given to health workers helping with humanitarian disasters such as the Ebola outbreak in west Africa. The only mention of that by the Chancellor was in connection with inheritance tax but many of these people will have no money to hand on as they are not rich. Surely we should be talking about significant ex gratia payments for people doing this extraordinarily dangerous and important work. I would like the Minister to comment on that.
It is also welcome that the Statement announces that small businesses will benefit. However, it should be remembered that there was considerable concern that the incoming Conservative Government would withdraw the tax relief for R&D. I know this as I am a founder director of a small company in Cambridge. There were many rumours going on all the time in these businesses and we had no idea what was going to happen. For two years we had great uncertainty about this investment. Now we are told that research is terrific and should be invested in, but that is not the way you run a country, with a stop-start process. In fact, Gordon Brown said that we no longer have a stop-go policy—but, of course, that happened under a Labour Government.
The Government’s remarks on infrastructure are another example of stop-go government. When the parties opposite came to power, they immediately cut expenditure on flood protection for no good reason. As Lib Dems generally have to walk around in gum-boots in many of their wetter constituencies, it is rather surprising that they did not demur, as they did not demur on most of the big cuts made by this Government. We are surprised, of course, that it has taken so long for the Government to come round to investing in flood protection. Our colleagues in the Netherlands were astonished by the incompetence which the UK has displayed in this area. Under the Labour Government, a Foresight programme was established which mentioned the need for further investment in flood protection, so now we are learning.
My next point is, again, positive—namely, that the Autumn Statement includes references to further funding for science and technology and that this expenditure should be maintained at an approximately constant level in real terms. The Government have outlined institutions that should be supported and expanded, such as the one in Manchester. However, I was at a meeting this week of a society of which I am a member, where real concern was expressed about the low salaries and weakening job opportunities for scientists. Of course, it is a good thing that there will be loans for postgraduate work but, if at the end of that there are not enough jobs, that is serious. Why will there not be enough jobs? One of the causes, of course, is the considerable uncertainty in the UK, and on the part of our partners, about the UK’s future in Europe. I tabled a PQ and the answer came back that there was uncertainty about that, so whether it is weather forecasting, high-energy nuclear physics, fusion physics or many other areas, doubt has been cast by government policy in that regard.
Finally, this Government, the Treasury and the City of London still do not understand that it is a good thing for the UK to have companies that are owned and based in the UK. Recently, we nearly lost a big pharmaceutical company. Fortunately, it had European directors who did not want to sell it. Now we have Airbus. It is no longer regarded by many people as a significant British company; they consider that we are subcontractors. Again, this is because the Treasury and the City seem to want us not to own businesses but just to have places where the businesses operate in the UK. Surely in the long term we should change that policy.
My Lords, I congratulate the noble Lord, Lord Rose, on his excellent speech. The noble Lord, Lord Palumbo, has hit the nail exactly on the head. The figures that he mentioned are completely ignored in most debates on economics and yet, in my view, they will come to haunt future generations.
We all know that the Government inherited an economic disaster caused by a previous Government who consistently, in their later years, ran a budget deficit when a surplus was appropriate, and boasted about economic growth that was partly financed by debt—the same trap that this Government are in. The last Government increased the money supply and oversaw—or did not—poor regulation. The bankers—or, should I say, gamblers?—took over the casino. They should have known better, bearing in mind the absurd salaries and bonuses they received. Sadly as we know, some of their illegal practices have continued for far too long. This must be cleaned up.
However, after four and a half years, we cannot go on blaming the last lot. Where are we now? The Government tell us that we have the fastest growth rate of any of the 28 countries in the EU. Well done for that. However, we also have the second largest budget deficit as a percentage of GDP of any country apart from Greece. We have, therefore, one of the fastest growing rates of national debt of any country in the EU, nearly doubling under this Government. How often do we hear that from the Government? If you spend £110 for every £100 you take in tax, you would expect the economy to grow. If it did not, you would really have a problem.
The Government, in my view, should have cut spending when they came to power. Instead, even on their own forecast, spending increases year on year. Spending is up this year by more than 2%. In Ireland, it is down 30% since its peak, and in Spain, Portugal and Greece by 7%, 8% and 16%. Admittedly, their debt-to-GDP ratios have increased because their economies have contracted. I am not advocating cuts on that scale but it shows that cuts, although very painful, can be achieved.
What did the Government do? They raised VAT and slashed government infrastructure spending. Surely a more effective approach would have been to cut current spending—welfare, for example, where benefits were initially linked to relatively high rates of inflation. Interest on the national debt costs £55 billion a year. The Chancellor congratulates himself on low interest rates, helped perhaps by quantitative easing; the unravelling of that is another story. What happens when rates rise, as they surely must?
However, at least we are not getting the talk of the “end of boom and bust”. There is good news—a large increase in small business start-ups and a big rise in self-employment—but only now are the Government starting to get a grip on benefits, which is not helped by vast and uncontrolled immigration, imposing huge strains on health, education and social services, holding down wages and, therefore, income tax receipts. It is a failure of this Government to control expenditure, immigration and many basic items of housekeeping, which is concerning. Costs can always be cut. Only now do we have proposals to stop those receiving redundancy payments being re-employed with no redress. This is basic housekeeping. I wrote about this to the Prime Minister four years ago; where is the implementation? Then we had the proposal to pass a law on balanced budgets—presumably to embarrass the Opposition. It is just a gimmick, as we all know; one Government cannot bind the hands of another. We cut our Regular Forces when world conflicts and terrorism are on the rise. Surely the saving of just over £2 billion would be better achieved by a cut in overseas aid.
However, much has been achieved—but sadly still not enough—to simplify the tax system. Noble Lords should look at the book I have here on claiming benefits. Written by the Child Poverty Action Group, it contains nearly 2,000 pages. Where is the simplification there? Disappointing as it is incurring debt to finance growth, the Government’s Statement is better than the Labour Party’s alternative, which is spend, tax and spend.
My Lords, somewhat to my surprise, I find that I have been making speeches in Parliament on Budgets and Autumn Statements for 50 years. Over that time, things have changed quite a lot. On the one hand, the Autumn Statement has been made increasingly close to Christmas, while, on the other, it has become more like a Budget. In that context, this Autumn Statement therefore contains two elements: specific proposals and economic management.
As to the first, this is one of the most imaginative autumn “Budgets” that we have ever had. It is extraordinary to cover everything from stamp duty to international tax avoidance, and from Select Committees on apprenticeships and so on to umbrella companies. Noble Lords may well ask what umbrella companies are. This is precisely the question that a Select Committee was set up in your Lordships’ House—for one of these rapid, six-month reviews—to deal with. It is gratifying to find that, apparently, the Chancellor is proposing to act on the problems that that Select Committee identified.
There were a great many proposals in the Statement and, as I said yesterday, I particularly welcome the VAT relief on hospices. I was wondering why I did not include that when I was steering the original VAT legislation through the House of Commons. The answer was that there were very few hospices. At that time, I had been involved in founding the second of them. That perhaps explains why that was so, but I am slightly surprised that the Chancellor thinks he can do that, because the Treasury has been assiduous in preventing the extension of VAT reliefs to anyone. Perhaps my noble friend can confirm the answer: that the relief will be given in the form of a refund, rather than zero-rating. If that is the case, it will be still be just as welcome and help hospices considerably.
I turn to the question of economic management and, of course, the deficit. We must recognise, and the Government recognise, that the Chancellor failed to hit his targets. I am not surprised by that. In the first speech I gave when the coalition came into operation, I pointed out the immense difficulties of cutting public expenditure. I have been through that set of problems myself but, none the less, we have reached a stage where it has been halved, and that is most certainly to be welcomed. However, crucially, the Chancellor has made it absolutely clear that he is going to persist with carrying through in his determination to eliminate the deficit and move us into surplus. The fact that Gordon Brown allowed himself to go on increasing the deficit, rather than running a surplus, when things were going well is much of the cause of our present problems. I therefore very much hope that the Chancellor will persist with reducing the deficit.
None the less, the economy is growing at 3%. That is nearly—in fact, I think it is—the fastest rate we have ever achieved. The difficulty now is to judge at what stage we run into the limit on productive potential. We need to ensure in the end that capacity, the productive potential and the level of demand are increasing at the same speed. The difficulty is that we do not really know how much of our productive potential was destroyed in the crisis. None the less, it is right to see how we go on that. It is crucial to increase the productive potential, and I therefore welcome the paper published the day before the Autumn Statement on the need to improve our infrastructure. A measure of how behind we have fallen on this is the road programme. As someone who has been advocating a bypass for Worthing for 33 years in the Commons and for another 17 here, what I do not understand is why now it is said that there will be some improvements to the A27 but the bypass will be at Arundel. My noble friend Lord Eden, from the south coast, may laugh but there is no main north-south route running to Arundel, whereas there is to Worthing. At all events, my noble friend the Minister who is to reply is involved in the infrastructure programme and I very much welcome what he is proposing.
My Lords, I should like to touch upon three issues in my five minutes. The first has been prompted by a splendid article in the IFS’s Fiscal Studies, written by Paul Johnson, which encouraged a glimpse of what has been happening to tax policy in the UK, from the perspective of consistency and coherence. This is a chance to take some stock.
So far as income tax is concerned, we know that the Government’s focus has been on raising the personal allowance, at a cost of some £12 billion currently. There has been less focus on reducing the marginal rates of tax, specifically the basic rate. Policy under the coalition has complicated the starting point in a number of ways. The starting point for national insurance contributions has diverged from the point at which income tax has become payable; the contributions threshold has been maintained in real terms. I am not sure that we have ever heard a good reason and justification for that from the Government, particularly because they claim to be helping hard-working families—who of course pay national insurance contributions. Marginal income tax rates have been increased because of the transferrable allowance for married couples. That is because it is withdrawn once higher-rate tax becomes payable, so an extra £1 of income at the threshold can result in a £210 tax bill. Marginal tax rates are also affected by the taxing away of child benefit at income levels above £50,000. This can reach more than 70% for larger families. Marginal rates rise again, once income reaches £100,000, to 62%, then fall away. Can the Minister explain the thinking behind this rate structure and what coherence is attached to it?
We see again short-termism and the sticking-plaster approach in the treatment of the annual investment allowance for business. It was increased to £100,000 in 2010, cut to £25,000 in 2012, increased to £250,000 in 2013 and raised again to £500,000 in 2014. Can the Minister explain how this helps business to plan for the long term? However, we should acknowledge that changes have at last been made to the structure of what has been described as the UK’s worst-designed tax, stamp duty land tax. However, it is clear that our current tax system is far from coherent and consistent in all its aspects. I would not lay this charge just at the door of this Government, but we need to find a way to build a coherent tax system on a long-term basis.
My second point concerns the tax avoidance measures referred to by others. The thrust of these should be supported. Of course, much of the avoidance and evasion can be effectively challenged only by international efforts—by a global response. There is much being done by the OECD and the G20, particularly around base erosion and profit shifting, exchange of tax information and anti-hybrids. However, these wheels grind slowly. The measures listed in the Statement for domestic action demonstrate the scale and ingenuity of those who seek to avoid their obligations.
All this heralds another bumper finance Bill to add to the more than 2,500 pages the coalition Government have brought forward so far. It is inevitable that sophisticated avoidance is met by detailed, sophisticated anti-avoidance legislation, but it raises the question of how the parliamentary process can readily cope with all this, let alone have processes for post-legislative scrutiny. The headline measure is the diverted profits tax. This principle should obviously be supported, but it raises questions about how it is to be successfully implemented. Is it intended that it will be introduced as part of the BEPS—the base erosion procedures—with the OECD initiative or otherwise? Can the Minister say what discussions have taken place with the OECD on the proposal?
My final point is a reflection on the overall impact of this Government’s tax and benefits policy, which my noble friend Lady Donaghy touched on. The Minister will doubtless be aware of last month’s report, authored by the LSE and the Institute for Social and Economic Research at the University of Essex. This work examined the distributional impacts of changes to benefits, tax credits, pensions and direct taxes from an indexed May 2010 base. It is suggested that that analysis is not displaced by yesterday’s Statement. Its conclusion is that, overall, the net effect of these changes, so far as the public finances are concerned, is neutral. However, the distributional effect has certainly not been neutral. Overall, the poorest 20th of the population lost nearly 3% of their incomes and the next five-20ths nearly 2%. Apart from the top 20th, the income groups in the top half of the distribution were net gainers, as were the top 1%. This is largely because benefit reductions were greater for the bottom half than their gains from lower income tax. Remarkably, without having any net effect on the public finances, the effect of the reforms has been an income transfer from the poorer half of households to most of the richer half. How on earth does the Minister justify this? Why should the poor bear a disproportionate share? Is this truly a legacy of which the Government are proud?
My Lords, in his absence, may I add my congratulations to my noble friend Lord Rose on his maiden speech and welcome him to the House? I would like to put on record my congratulations to the Chancellor on what I am going to call an Autumn Budget, both in an economic and political sense. Others have said much about the surprising success of the UK economy over the last five years, particularly in comparison with continental Europe. I will focus in particular on the entrepreneurial explosion that is going on—the greatest I have known in my business lifetime and something that will be extremely good news for the future.
As well as that, the Chancellor, supported by the OBR, has set down his long-term plans for the economy, which are, amazingly, to achieve a budgetary surplus of £23 billion by 2018 and to bring public spending down to 35.2% of GDP by 2019-20. That is a commitment to a competitive, low-tax economy, which is the only way in which we are going to generate the tax revenues to finance the constantly increasing costs of the National Health Service.
I will point to one or two interesting statistics that came out of the Autumn Statement. The first are simply the revised figures, showing 8% growth of the UK economy since 2010. I am not sure whether the noble Lord, Lord Skidelsky, was up to date with the revised figures. Secondly, although the deficit remains too high—indeed, as the noble Lord, Lord Desai, pointed out, we have had a strong element of Keynesian support of the economy—the annual deficit is now down to 5% of GDP, a halving of its extent since 2009. Thirdly, we have all heard that business investment is far too low, yet I note that rather than being growth of 4% it is actually growing at 27%, which must be one of the highest growth rates on record.
The decline in youth unemployment is extremely good news. The whole issue of what is happening to wages is also quite interesting. The Statement points out that, for those in employment, increase in pay is currently running at 4% per annum, even though the average is far lower, largely because of all the new jobs for the young. I was interested to note some recent comments by former Chancellor Darling, to the effect that he was saddened that, while tax credits had been introduced with the intention to boost living standards, they had served largely to keep down wages: why would employers pay when the Government would top it up? That has had a material impact on wage growth and on poor productivity figures.
A key political measure has been reform of the extremely unfortunate stamp duty “slab” system, which the Labour Government brought in. Some 98% of the population will benefit from that. Moreover, the rather harsh 12% stamp duty charge on properties worth more than £1.5 million will serve to kill, one way or another, the wholly impractical mansion tax proposals.
I will highlight one small measure for which I have campaigned for a number of years, which is that the surviving spouse can now inherit her husband’s or his wife’s ISAs intact, with their tax benefits. It always struck me as unfair that, while that occurred for pension saving for retirement, a lot of self-employed people use ISA savings for retirement, so that the widow was quite often, to my mind, robbed of the tax incentives that ISAs offer. I am grateful to the Chancellor for having finally implemented that.
To comment on some of the measures to raise taxes and address things that needed addressing, I would just say that the 12% stamp duty at £1.5 million is on the high side and anti-aspirational, particularly for people living in London. Secondly, on the additional £4 billion of tax on the banks by disregarding 50% of past losses, I am pleased to note that the Government excluded new banks from that for their first five years. However, I think that there is some risk. If you want the banking system to lend more, it needs more capital, with capital requirements going up. If it is constantly being fined due to extra amounts being taxed, there is only one thing that can happen, which is that bank balance sheets contract and lending reduces. I think that that needs to be borne in mind.
While the 25% special tax on multinationals transferring profits is certainly justifiable, when put together with the big increase in non-doms taxation, we need to be careful not to kill the goose that lays the golden egg. This country has benefited hugely from talented entrepreneurs—I refer to the likes of my noble friend Lord Rose—coming to the UK and living and establishing their businesses here. If we get the reputation of being tax-unattractive, that can be nothing other than damaging. However, overall this is an excellent Statement and it demonstrates that this Government have done remarkably well with our economy in very difficult times.
My Lords, I draw attention to the contrast between the prospects for our economy, particularly on the deficit, so starkly set out in the report of the Office for Budget Responsibility, and the preposterous gloss put on it by many speakers on the Conservative Benches, who ought to know better and who ought at least to be able to read a balance sheet and understand gross national product figures. I include in that the former Chancellor, the noble Lord, Lord Lawson, whose figures were totally wrong when he referred to ours being the most successful economy in Europe. There are two points here which we have to nail as lies—if that is not an unparliamentary word; if it is, I will withdraw it. What has been said is not true. I will quote from a chart the figures that show what has happened to some economies since the peak of 2007 to 2009, followed by the trough and then a comeback.
First, on the level of economic activity, Germany is still the best part of 20% more productive than we are—over 10% per head. Secondly, Germany has never had a big trough. I shall quote some figures, which are in billions of euros, so they are all consistent. The figure for Germany’s gross domestic product for 2007 was €2,428 billion. It is now €2,737 billion—an increase of 16%. Our GDP stood at €2,086 billion in 2007, and the latest available figure, published by Eurostat, is €1,899 billion for 2013. We understand from recent Treasury announcements that we have just got back to the previous peak. Even France did not have the great trough that we had and its economy is at least at our level of prosperity.
The propaganda coming from the other side of the House is relentless. This is a highly political debate and the more I listen to it, the more I believe that what is coming from the Conservative Party is purely political propaganda. We know that the maxim in the minds of those in the Conservative Party at the moment is that you can fool some of the people for some of time and indeed that you can fool all of the people all of the time—at least until May 2015. However, I do not think that that will happen because, as we have heard, people have their own experiences of productivity, wages, living standards and cuts. My noble friend Lord McKenzie touched on this. The cuts have been not two, three, four or five times but the best part of 10 times more onerous for the bottom quarter than for the top.
I should like to ask the Minister—he has time to get advice on the Eurostat and other figures—whether he agrees that my figures are correct and that the figures from Conservative Central Office being trotted out by the previous speaker and many other speakers are preposterous and wrong.
I want to make one point on our productivity performance, which my noble friend Lord Adonis made one of his major themes. I very much welcome the recognition, finally, in this country that we have to benchmark and learn from other economies in Europe. Mr John Cridland, the director-general of the CBI, in a speech the other day said that we ought to study the Mittelstand—the medium-sized enterprises—in Germany. I hope that there will be an opportunity for the TUC and the CBI to discuss these matters together. I hope that people do not think that that would be a retrograde step; I think that it is a rather good thing to do in all successful economies. So far as the companies in this country are concerned, those economies, as well as the multinationals, need to get together to look at what happens to skills and productivity. World market share is always on the agenda for the European works councils. That is what they are for: to see whether X, Y or Z is needed to increase world market share. However, we do not have that for our companies.
I hope that at some point we can be a little more objective about the prospects for our economy and not just, as too many people on the opposite side have done, regurgitate statistics that relate to a fantasy world. On that, I think that the chickens are coming home to roost with a vengeance.
My Lords, in his first Budget in 2010, the Chancellor said that the Government would,
“have debt falling and a balanced structural”,
“by the end of this Parliament”.—[Official Report, Commons, 22/6/10; col. 168.]
Despite the Chancellor’s tough talk about austerity and cutting public expenditure, the reality is that public expenditure as a percentage of GDP has continued to increase. I thank the noble Viscount, Lord Younger, for leading this debate.
Yesterday, it was announced that the Government will spend £746 billion in 2015-16, rising to £765 billion in 2018-19, compared with £692 billion in 2010. Government spending is increasing and, as a percentage of GDP, our national debt is rising. According to the OBR, it will now peak at 81% of GDP in 2015-16. This means that the Chancellor will completely miss his target to ensure that net debt is falling relative to GDP by 2015-16.
We have a perception of austerity that has simply not been matched by reality. Yesterday, the Chancellor acknowledged that we are at least another four years away from that target. To build on what the noble Lord, Lord Skidelsky, said, if we are borrowing £300 billion more than the Chancellor said he would in 2010, why should anyone believe him this time around? The OBR has predicted that public expenditure is going to have to fall to 35.2% of GDP by 2019-20—the lowest level since the 1930s. Let us remember that the 1930s were pre-welfare state days. Can the Minister confirm that that is really achievable?
In order to achieve those cuts, it is predicted by the OBR that the defence budget, which is already negligently too low, will have to be cut by 60%. Can the Minister confirm that that might have to happen, although it is hoped that it never will? However, I was delighted to hear that the Government will be giving money to veterans, including £2 million for the Gurkhas. I was privileged to have been brought up with the Gurkhas. My late father, Lieutenant-General Bilimoria, was commissioned to the 2nd Battalion, Fifth Gurkha Rifles (Frontier Force), and was president of the Gurkha Brigade when he was commander-in-chief of the Central Indian Army. I was privileged to have been brought up with two Victoria Cross holders from birth—they were living legends. Therefore, I thank the Government for doing that.
However, it is the low level of interest rates for a prolonged period, at the level of 5% that led to the financial crisis from which we suffered. Yet today we are being propped up by interest rates that are 10 times lower—at 0.5%. Government borrowing has been increasing year on year and expenditure on debt interest has contributed to it. It is more than £1.27 trillion and is costing us £1 billion a week—more than the entire defence budget.
Does the Minister agree that interest rates might have to rise? The Governor of the Bank of England made a ridiculous statement that he would start increasing interest rates when unemployment fell below 7%. Unemployment is at 6% now and interest rates have not gone up, but they will go up at some stage, and if they do the debt interest levels will go up. The SNP made the mistake in its budgets with the oil price and its budgets are shot to tatters at the moment. Will the Minister give his views on future interest rates?
Wearing my hat as chancellor of the University of Birmingham I have seen that our higher education sector is one of the jewels in our crown. I am delighted that the Government are about to announce loans for postgraduate studies. On the other hand, we highly underinvest in higher education as a proportion of GDP compared with the OECD, the EU and America. On R&D and innovation, the patent box is all very well—it is stored—but if we invested the same proportion of GDP as countries such as America, the OECD and the EU, we would help our productivity hugely. Our current account deficit has reached 5.2% of GDP, which is worse than Italy and France. Our fiscal deficit of 5% is almost double that of the United States, let alone Germany which has just 0.2%.
As the noble Lord, Lord Adonis, said, skills are so essential. I am proud to be an ambassador for Studio Schools. Last month I opened the Vision Studio School in Mansfield. That is the sort of initiative that I am glad the Government are backing. Tax breaks to apprentices are excellent but, on the other hand, the word “entrepreneurship” was completely missing from the SME Bill. Entrepreneurship should be the cornerstone of our future growth. I launched the 10th anniversary of the Cambridge University Centre for Entrepreneurial Learning this week. That is what we should be backing. The Sirius campaign, backed by UKTI, bringing young entrepreneurs to Britain to develop their businesses, is a great initiative that the Government should be doing.
The Government are doing a lot, but are they doing enough on the big things? We have a tax system that is so complicated that the tax code is now 17,000 pages long. The Office of Tax Simplification is an oxymoron. Our corporation tax rate is low but our income tax rate is too high. Capital gains tax is too high. The Indian restaurant industry which we supply and the Bangladesh Caterers Association UK are constantly complaining about VAT and asking for it to be reduced. Our hospitality and tourism industries say that VAT is far too high. We do not have a competitive tax system.
The noble Lord, Lord Rose, in his excellent speech, spoke about confidence. We need confidence, productivity, and a better educated and more entrepreneurial workforce who think globally. Government expenditure should be at a believable rate: 35% is unachievable; 40% would be a realistic rate. We could then balance our books and have an educated, productive, confident and enterprise-based economy so that, even as 1% of the world’s population—that is all we are—we can continue to punch above our weight.
My Lords, I shall confine my remarks to the part of our country that matters most to me—Northern Ireland. The responsibility for setting corporation tax rates there could now be devolved to its power-sharing Executive and Assembly as a result of an extremely important announcement in the Autumn Statement. The announcement has been long awaited. Widespread consultations were initiated more than three and a half years ago when the Treasury published a paper to pave the way for a detailed examination of, in its words,
“the extent to which a phased reduction in the rate of corporation tax could support a rebalancing of the economy”.
The rebalancing of the economy is, of course, one of the principal objectives of this Government’s policy. Nowhere is a significant rebalancing needed more than in the Province, which has for so long been overwhelmingly and dangerously dependent on the public sector. The Treasury’s work on the issue of corporation tax devolution was completed some time ago. I pressed for an announcement as soon as possible. I am glad that it has at last been made.
Many of the Province’s politicians and economic experts believe that Northern Ireland needs rates of corporation tax significantly lower than the rest of our country, welcome though the Chancellor’s steady reductions in the tax over years have been. That is because Ulster faces severe competition for the inward investment that it needs so badly from its neighbour across its border, the Republic of Ireland, which has a 12.5% rate of corporation tax. Substantial inward investment and the new private sector jobs that it could create are vital if the rebalancing of the Northern Ireland economy is to be achieved. The Government estimate that low rates of corporation tax in the Province could lead to the creation of some 50,000 new jobs in the years ahead.
The devolution of corporation tax does not command universal assent in Ulster, but the majority of the Province’s political parties and large numbers of its business leaders favour this immensely important proposal. The Northern Ireland Chamber of Commerce said yesterday that,
“our politicians must grasp this opportunity”.
With the opportunity comes a severe challenge. The immediate consequence of special low rates of corporation tax would be the reduction in the revenue generated by them, which would lead in turn to the reduction in the block grant which the Northern Ireland Executive receive. So, as my noble friend Lord Empey, chairman of the Ulster Unionist Party, who cannot be in his place today, has often reminded me, careful consideration would need to be given to the manner in which low rates of corporation tax were phased in if they were devolved. A gradual introduction over several years would seem to be the right course.
The Government will be aware that yesterday’s announcement in respect of Northern Ireland will stir keen interest in Scotland and Wales. The Smith commission ruled out the devolution of corporation tax to the Scottish Parliament. Nicola Sturgeon, however, is unlikely to let the matter rest there. In Wales the Silk commission recommended that the tax should be devolved to the Welsh Assembly if Northern Ireland was given it. The Government will need to consider these repercussions, remembering always their overriding duty to preserve the unity of our country. Unfortunately, and through no fault of the Government, the corporation tax announcement does not come at a propitious moment in the political fortunes of the Province. Its power-sharing Executive are in turmoil. One consequence of that turmoil has been a £100 million loan from the Treasury to cover the current deficit. The Chancellor was right to say that the Executive must demonstrate that they are,
“able to manage the financial implications”,—[Official Report, Commons, 3/12/14; col. 314.]
of corporation tax devolution. That is a fair and proper condition to stipulate.
Cross-party talks are now taking place under the chairmanship of my right honourable friend the Secretary of State for Northern Ireland. I hope that the financial and other issues that are now seriously jeopardising the work of the Northern Ireland Executive will be diminished to the point where the Chancellor’s welcome announcement can be the subject of serious cross-party discussion in the Province. Those who seek to impede Northern Ireland’s search for economic progress will not be readily forgiven.
My Lords, I begin by apologising to the noble Viscount that my Select Committee duties kept me from being in the Chamber at the beginning of this debate. My thanks to the Whips for letting me in.
The problem with this economic debate is that it is defined almost entirely in terms of the deficit. Indeed, we have become obsessed with the figures for the deficit in the same way as we were obsessed in the 1970s with the trade gap, which nowadays is largely ignored. I recognise that the deficit is important both in absolute terms and in terms of the way in which we finance it. But focusing on it takes away from focusing on the two sides that create the gap—income and expenditure. I want to focus largely on one reason why both public income and expenditure are affected by the very serious reduction in real wages. I follow the noble Lord, Lord Skidelsky, and my noble friend Lord Desai in focusing on real wages.
Low real wages both reflect and cause one of our underlying problems: low productivity. Indeed, as others have said, low productivity is one of the main constraints on our recovery. There are many reasons for real wages having declined in recent years, some directly and some indirectly to do with the Government. They relate to the public sector wage freeze, the absence of collective bargaining in large parts of the private sector, the increase in part-time work for many people who would prefer to work much longer hours, down to those on zero-hours contracts, and so forth, and the increase in what is termed self-employment, which often is not by choice either. Indeed, the real incomes of the self-employed have fallen faster than for anybody else since the financial crisis, although the numbers of self-employed have increased.
The effects of low income have been felt on both sides of the equation. They have clearly lowered the actual receipt of taxes to below what the Chancellor expected and they have increased the level of expenditure through tax credits and housing benefit, which has been aggravated by the complete failure to deal with the underlying housing crisis. Housing costs are going up at the same time as real incomes are going down. Also, we should not ignore the fact that low real wages have toxified other aspects of the body politic. We have intergenerational conflict. As someone said, the young are most hard hit by the decline in wages. We also see it in sensitive debates around immigration, the EU and the whole future of welfare.
The Chancellor and the OBR seem to expect real wages to recover, but there is no obvious reason why they should—particularly if we reduce the role of the state to that in the 1930s. If we are going back to that, we should remember quite what the 1930s brought us in terms of both economics and politics. We need instead to introduce structural and legal changes that raise the level of incomes of the poorest in our workforce. If we do that, we will begin to increase income to the Exchequer on the one hand and to reduce expenditure on benefits on the other. We will also help to remove some of the dangerous tendencies in our society and in the body politic.
Let me be fair; there are aspects of the Statement to which I can give a qualified welcome. I agree with most of the infrastructure commitments—but, like my noble friend Lord Hunt, I regret that they also reflect those areas which the Government cut five years ago. Nevertheless, they are back, although I regret the absence of any commitment to a housebuilding programme. I welcome the more progressive moves in relation to the structure of stamp duty, although while it may help on the one hand, on the other it may aggravate the housing market in the short term. But the overall message I want to send is that unless we as a society and as a Government or alternative Government address the issue of declining real pay, we will end up remaining in this situation for many years to come.
My Lords, I congratulate my noble friend Lord Rose of Monewden—I hope I have pronounced that correctly—on his maiden speech. We will all be interested to hear from him on business matters. I understand that he also has experience of turning round failing hospitals. As a former health Minister I shall be very interested to hear about that as well.
As this is the last Autumn Statement before the general election, it obviously has more than a whiff of politics about it. As an economist and as a politician, I have sometimes felt torn in two by the conflicting priorities that these occasionally impose—but not on this occasion. For the first time, the Chancellor of the Exchequer has seriously hit the holy grail of economic policy, which is economic growth with low inflation. He has done that partly through his own efforts, which have been somewhat more Keynesian, as the noble Lord, Lord Desai, implied, than he might perhaps have thought earlier on. He has also done it because of the enduring legacy of the Thatcher and Major years.
My noble friend Lord Lawson of Blaby referred to those years, but did not mention that he himself played a central part in the microeconomic management from which we still benefit. Ed Conway, the “Sky News” economics editor, wrote in the Times the other day:
“Europe is still awaiting its Thatcher moment”.
That is because of the regulations and problems of the labour market which are still prevalent, particularly in southern Europe. Even Germany has problems because it is still waiting for its Keynesian moment. It does not understand that there has to be some expansion from time to time in order to get the economy going. Believe you me, if you are in the eurozone and you have not had a Thatcher moment and you still have not had a Keynesian moment, you are in real trouble. That is the difficulty they face—and it will impinge on us in due course.
I welcome particularly the centrepiece of the Statement about infrastructure development. As a former transport Minister, I welcome the points about roads and railway development, although, as the noble Lord, Lord Adonis, rightly pointed out, under both Governments, far too often these have been stop-start projects. We should not forget one thing, which is that we have done particularly well on broadband. When this Government came to power, the UK was one of the worst countries in western Europe for broadband development; now we are the leader. That is a very good example of how government policy should be conducted.
Also in the context of infrastructure development, as a Lancastrian I particularly welcome the emphasis on the north of England. The HS3 project has everything going for it and makes total sense. I hope that my noble friend Lord Deighton is listening carefully: I hope that the Government will proceed with HS3 whatever happens to HS2. HS3 should take priority because it is good value for money and makes sense.
I think that we should proceed with fracking in a sensible way, while obviously taking the environmental concerns into consideration. Jim Ratcliffe, a fellow Lancastrian and the founder of Ineos in Scotland, took the right approach when he said that we should increase greatly the amount going to local communities as a benefit from fracking. He proposed that 6% of the revenue sales should go to local people, 4% to the owners of the land and 2% to the communities. That compares dramatically with the figure of 1% which the Government are proposing at present. If we are going to get going on fracking, we have to do something dramatic. Cheap energy is the new cheap labour. Now that China’s wage levels are coming up to ours, cheap energy is absolutely crucial and also has geopolitical implications in terms of the new Cold War with President Putin in Russia. This is something of vital importance which I hope the Government will focus on.
Finally, I will say something about low pay, which has rightly been mentioned by a number of noble Lords opposite. It has been reported that at the moment there are some 300,000 people in this country who have a job but are not getting even £6.50 an hour for it. That is a scandal. When Frances O’Grady, the general secretary of the TUC, recently came to speak to Conservative Peers, I asked her what should be done about this issue. She said that the first thing we have to do is enforce the minimum wage provisions. That is not being done as extensively as it should be in this country. I hope that the Government will listen to what Frances O’Grady said because she is a very sensible woman.
My Lords, I congratulate the noble Lord, Lord Rose, on his excellent maiden speech, and in particular I congratulate him on his work at Marks & Spencer and his Plan A campaign, based on the very important principle that there can be no Plan B when we have a single planet.
Listening to the Chancellor’s speech yesterday, one could be mistaken for thinking that all is well and he has not in fact missed his targets or had to make a U-turn on the main elements of his economic plan. We are told that the UK’s economy is growing and that the plan, if it is not quite working as expected today, will definitely do so tomorrow. Whether people feel that this is indeed the case will be a big factor in deciding the next election. My concern relating to the Statement is the extent to which the Government’s management of the economy is sustainable.
If our measure of success is based on shaky foundations, the indiscriminate slashing of public spending and tinkering with tax cuts, the plan will not work. If we tell ourselves that all is well, but in reality our measurements of growth do not reflect external realities, it will not work and cannot work. If, as it appears, we are relying on growth based on another bubble in the housing market, on household, debt-based consumption at the expense of savings, on imports rather than domestic manufacturing, on receipts from oil and gas extraction rather than from clean energy and increased efficiency, on using fines from corporate malpractice to fund essential services and on relying on increases in population to spur growth but not investing in the infrastructure that that increased population must rely on, the plan can never work.
The noble Lord, Lord Skidelsky, in his characteristically concise and powerful speech, used the word “delusional” to describe the Statement, and I have to say that I agree with him. This is a document about a fantasy world and it is out of touch with the modern challenges of today. The Chancellor seems to inhabit a world where he believes that we can continue to rely on the past to prop up our economy and to have an almost delusional faith in future, as yet unproven, fanciful sources of growth—anything rather than face today’s reality. Blinded by a poorly defined “small government” ideology, the Government appear unable to grasp that state investment can be a spur to growth, boosting income and helping to pay down debt faster. Instead of delivering real growth in investment, the Chancellor appears to be relying on the old trick of changing the goalposts to hide the weak fundamentals—reclassifying business investment to include R&D and reclassifying public investment to include single-use military expenditure. These may have helped the figures look better than they really are but do not signify a big change or indeed a sustainable future.
The reason real investment is not happening is because the Government are relying on a strategy of enticing the private sector to invest, where the state could do so at lower cost and with a higher degree of certainty of delivery. We see this in the Chancellor’s inadequate and implausible flood defences plan. We see it too in energy. Over half of the projects in the Infrastructure UK pipeline relate to energy but the Government’s approach to securing this investment is confused and confusing. We can be grateful at least that the Chancellor has been persuaded to drop his damaging anti-renewable energy rhetoric and false boasts about not going further or faster than Europe in tackling climate change, but the lack of a logical plan is still frighteningly clear.
Not so long ago the Government were trumpeting their successes in reigniting investment in the UK nuclear industry. Obviously this involved the destabilising of the rest of the energy market but that seemed not to matter at the time. It has been suggested that Hinckley Point C is going to be the single most expensive infrastructure project ever built in the UK, yet it warrants not a mention. Could this be because the Chancellor is learning that leaving things entirely in the hands of the private sector—even a foreign state-run company masquerading as the private sector—is not a reliable strategy? You have to overpay and overincentivise, and you have no guarantee of delivery.
On renewables, the Chancellor has at least discovered two technologies he seems happy to mention: offshore wind and now the promise of tidal lagoons. The problem is that these are currently the most expensive possible options. Onshore wind, the cheapest source of clean power—which still has much room to grow if handled sensitively—is ignored. So are solar power and renewable heat—two technologies that enable individuals and businesses to join the energy generation market. Clearly, the widening of the number of players in the energy market is still not high on the list of the Chancellor’s concerns.
The Chancellor prefers to rely on the old industries, desperately hoping that even as oil prices decline we can somehow rely on the North Sea to keep providing us with income. If there is a plan to address the falling receipts that are inevitable, it is based on a fantasy—shale gas and the much hyped creation of the sovereign wealth fund for the north on the back of the receipts. This is not credible. It is likely that revenues will not be generated for at least 10 years and any wealth fund will need to wait another decade to be able to spend any interest on the money that has accrued—if it has indeed accrued. Why the sudden interest in the north? Perhaps close family members have pointed out that the desolation there makes it ripe for oil and gas exploration.
Finally, I will say a word about stamp duty, which of course has caught the headlines and been a very popular measure. The changes announced are clearly sensible and long overdue. However, an important opportunity to boost investment in the efficiency of our housing stock by reducing fuel bills and linking this to stamp duty has been missed. This is not surprising as the Chancellor shows no understanding of the benefits of increasing efficiency to boost our economy. The Statement was, in one sense, a triumph of fantasy over reality. Thankfully, the public live in the real world and, I am sure, will vote out this Government.
My Lords, I congratulate the noble Viscount, Lord Younger, on securing this very important debate and the noble Lord, Lord Rose, on his excellent maiden speech.
I want to concentrate on the UK’s chronic skills shortage, particularly in construction, which is hampering productivity and holding back the economic recovery, according to business leaders. The situation is best summed up by Richard Steer, chairman of Gleeds Worldwide, the leading construction management company, responsible for a wide range of projects, from nuclear power stations to luxury apartments. His view on the Autumn Statement is that,
“the pre-announced news on infrastructure and housing spending is good, as is spreading investment nationwide rather than just focusing on London and Southeast. The headline grabber is the major revision in stamp duty. It will hopefully re-stimulate the housing market which appears to have frozen. This combined with the recent announcement of direct government intervention in house building … shows a commitment to trying to meet the growing national housing shortfall. But the shortage of skilled labour in our sector is still a major challenge for us all and whilst we see some help in this area in this statement it is not enough in my view”.
Kevin Green, chief executive of the Recruitment and Employment Confederation, paints an alarming picture. He says:
“Last year we had nine areas of skills shortages, now we have 43 areas. Every single type of engineering is in short supply, from mechanical to software, civil to electrical. In IT, coders, programmers, developers are all in short supply; there’s a shortage of doctors and nurses in the National Health Service; and we need about 20,000 more teachers in the UK”.
He adds that,
“the situation’s been getting worse month-on-month”.
Rob Wall, the CBI’s head of employment and education, concurs, as does Alan Muse, global director of the built environment at the Royal Institution of Chartered Surveyors. According to one recent report by accountants KPMG and the London Chamber of Commerce and Industry, about 20% more construction managers, surveyors, electricians and other trades will be needed to meet demand over the next four years than were needed from 2010 to 2013. According to Richard Steer:
“About 400,000 people left the industry since 2008”.
He says that another 400,000 will retire over the next five years and that the industry is suffering from a severe shortage of almost all skilled people. He points out:
“Brickies are flocking to the South East leaving shortages in the regions … It takes about three or four years to become a good brickie”.
He adds that during the recession:
“Brick factories closed down so house builders have suffered a huge shortage of raw materials”.
Chris Bence of the leading building supply merchants in Gloucestershire put it starkly when he told me:
“You can set what target you like for building houses, but you can’t build them because there are not enough bricks”.
These shortfalls mean that the price of construction is going up at a time when we are trying to create more social and affordable housing.
The Government have certainly been investing in apprenticeships. Business is keen to expand the apprenticeships programme, as long as it is more involved in designing the schemes and courses. The Autumn Statement partly responds to this by abolishing national insurance contributions for employers of apprentices under 25 earning up to the higher tax level. But most organisations say that more could be done to remove the stigma attached to vocational subjects in schools, colleges and universities. Rob Wall of the CBI says:
“Vocational routes are seen as second class and that isn’t acceptable”.
Germany, South Korea and Switzerland have much more successful vocational routes to employment because they regard university degrees and apprenticeships as having equal value and worth.
Some noble Lords will have already heard my story of the young lady who told her parents and teachers that she was not going to university. They were horrified and tried bribery and blackmail to try to make her change her mind. But she was determined, because she wanted to become an electrician. She started an apprenticeship. Now, four years later, she is earning more than her elder brother, who did go to university. She has no student debt, no drink habit and can get up in the morning. Most importantly, she is happy and her parents are no longer horrified. The Construction Industry Training Board reckons that 180,000 more construction workers like that young lady will be needed over the next five years. Without those skilled people, the Government will not meet their ambitious targets for housing and infrastructure.
Finally, on a different subject, with the increased investment in the NHS, I urge the Government to encourage Gloucestershire health chiefs to reverse their decision on accident and emergency services at Cheltenham General Hospital. It is frankly ridiculous that the service is being downgraded simply because of the failure to recruit enough emergency doctors and nurses. I have received excellent A&E treatment in Cheltenham on more occasions than I care to remember, and would not be here now without its early intervention. A town the size of Cheltenham needs and deserves a full A&E service.
My Lords, this has been an excellent debate and I congratulate the noble Viscount, Lord Younger, on introducing it and on concentrating in his contribution on skills and productivity, which are very important for the future of our economy. I fear that it is an issue we have neglected for too long and for which we have failed to produce the necessary solutions. I have taken great pleasure in a great deal of this debate having revolved around these issues. Clearly, as my noble friend Lord Whitty emphasised, unskilled labour operating on low wages and paying negligible tax impacts on all aspects of the economy. Part of the problem is that, while the Government can congratulate themselves on increasing employment, they actually find that that employment is not resulting in the resources necessary for the Government to meet some of their obvious targets.
I also congratulate the noble Lord, Lord Rose, on his maiden speech. We shall all benefit from his vast business experience in our economics debates. I can assure him that, on other occasions, the House will be more generous in the time it allocates to Back-Benchers. Yesterday, it was two minutes for Back-Benchers; five minutes today was an improvement, but it does not do justice to those who want to express themselves on such an important issue. I hope we can prevail on those responsible for business in the House to allow extended time on major debates such as this one in the future.
My noble friend Lord Adonis spoke very strongly about the skills agenda. A great deal of our economic problems revolve around our underskilled workforce. However, he went on, as we would have anticipated from his record in the past, to consider the issue of infrastructure. I am sure that the ears of the noble Lord, Lord Deighton, pricked and his eyes lit up when my noble friend got on to the area on which he would want to express strong views to the House. We pressed the Minister yesterday, but not with entire success: perhaps we did not ask the question with the same degree of precision as my noble friend Lord Adonis did. He emphasised that the Government had postponed anything to do with airport capacity until after the election, so that was a five-year delay on major infrastructure with regard to aviation. We were given a roads programme, but it is very difficult to identify when anything will start or be completed. My noble friend Lord Hollick said yesterday that he could identify only £100 million devoted to infrastructure over the next four years, so that did not look as though it will produce a great deal. I hope, therefore, that the Minister will be as convincing as possible about the emphasis that the Government are putting on infrastructure, where they will get the resources from, just how much money is involved and the timetable for it. There is not much point in talking about the Northern Hub and introducing better trains for the north and HS3 if we do not have a timetable, or—from what we can see—any resources being devoted to them in the near future. I hope, therefore, that the Minister will reassure the House on that.
Of course, the Government are trying to suggest that there is a success story implicit in the Autumn Statement; that the progress they have made in getting the deficit down, conveniently forgetting—as the noble Lord, Lord Skidelsky, emphasised—that the promise was that the deficit would be wiped out by 2015. However, it is quite clear not only that we will have a severe deficit for a time to come and that it has had a recent increase, but also that the price is going to be paid in public expenditure cuts. We know where they are going to fall: on certain key projects relating to the necessary aspect of public expenditure; on government departments, where it is even suggested that some could even be closed down; and, most frightening of all, cuts in welfare. We know how addicted Conservative Chancellors, in particular, are to an onslaught on welfare, but there are an awful lot of people in this country who, through absolutely no fault of their own, are dependent on some support in order to live a remotely civilised life. They will bear a dreadful brunt of that Budget. The Government suggested that 80% of the cuts were already through, but bodies that should know say that the cuts are only half way there at present, and we have a very grim immediate future ahead. There have been anxieties, and the right reverend Prelate the Bishop of Portsmouth emphasised that there would be certain people bearing the brunt of the Government’s failure who ill deserve to be hit in this way.
I heard what my noble friend Lord Desai said about productivity. There is sufficient gloom around regarding the difficulties with the economy without an informed, expert analysis of just how difficult it is to increase productivity and how we were doomed to have a poor future record on that. I do not agree; I think it is a question of where there is a will, there is a way. Where this is a concentration of resources in action, we can see significant improvements and we certainly need to do so. Of course, as the noble Lord, Lord Skidelsky, identified, because we are so poorly placed with regard to the workforce, the Government’s record in the past four years has been woeful in their declared objective of removing the deficit. This was also emphasised by the noble Lord, Lord Bilimoria. How on earth can the Government expect to be believed on their future promises when their absolutely cardinal promises made in the past have led to failure?
There are two promises that have been emphasised at the highest possible level. The Prime Minister said that the deficit would be removed by 2015 and that immigration would be down in the tens of thousands, when its current figure is 200,000. Contrary to what the noble Lord, Lord Palumbo, suggested when he said that politicians never pay the price for failure, the Prime Minister said, “If we fail, then we can be voted out”. That is a consolation devoutly to be wished on this side of the House.
In relation to that, I was grateful for the contribution made by my noble friend Lady Donaghy on the important fact that the one thing that never seems to pass government lips at any time is any recognition that the rampant increase in inequality in our society over the last two decades or so has had any impact on the welfare of our society. Serious academic treatises have established that the good society, and the greater contingent society, is when differentials are narrowed. What are we seeing here under this Administration? They are being widened continually by deliberate actions of the Government.
I, too, suffer from the constraints of time, but I am grateful to all who have contributed to this debate. The reason for my failure to refer to every single contribution is obvious: just one half-minute for each person would take me beyond my time. I hope that the House will appreciate those constraints.
My Lords, I congratulate my noble friend Lord Rose on his muscular magic and sparkle. He meets my noble friend Lord Palumbo’s definition of someone who can get something done as a template for the perfect politician. I was actually hired with that objective, and it is not always that easy, but we are all trying our best.
Yesterday’s Autumn Statement provides a lot of information about the UK economy and gives us the opportunity to do what we have done today, which is to evaluate the effectiveness of what the Government are doing and to discuss some of the knottier problems we face.
I think that the good news—the “success story”, as my noble friend Lord Lawson described it—is well understood. At 3% this year, we have strong growth—the fastest in the G7; it is well balanced across manufacturing, construction and services. As my noble friend Lord Younger said—my noble friend Lord Lawson commented on it, too—it is the envy of other European countries, although I appreciate that the noble Lord, Lord Lea of Crondall, does not agree with that. We have record numbers in employment based on significant job creation by the private sector—2 million since 2010; my noble friend Lady Bottomley described it as a 1,000 a jobs a day. Inflation has sunk below the target of 2%; energy and food prices have fallen, helped by a strong pound; and of course interest rates have stayed low.
That is the picture. We have heard today views on the key subjects of the deficit and living standards, and a range of questions around what I would lump into the “productivity” category. I shall try, coherently where I can, to go through those in order and respond—again, where I can—to noble Lords’ observations and questions as I go along, but we are somewhat constrained by time.
First, on the deficit, I am not going to enter into a Keynesian ideological argument, but I will buy front-seat tickets when my noble friend Lord Lawson and the noble Lord, Lord Skidelsky, duke that one out. The deficit has been halved, and we are on track to eliminate it in 2018-19. Progress is slower than we planned in 2010, but it is because the recession was deeper than we had understood and the recovery, as the noble Lord, Lord Skidelsky, was kind enough to point out, was stalled by the eurozone crisis and high commodity prices. The OBR has pointed out that it was not stalled by fiscal consolidation.
I do not believe that, given those circumstances, many people—possibly with the exception of my noble friend Lord Stevens—think that we should have gone faster. Since this year’s Budget, the deficit has not come down quite as quickly as expected, which is because of weaker tax revenues, both income tax and corporation tax. As the noble Lord, Lord Desai, said, life is never easy. The forecasts are dependent on highly changeable assumptions. Even the history is hard to work out, and we have seen some statistical changes which make it even more opaque, although I would point out in response to an observation made by the noble Baroness, Lady Worthington, it is not down to the Chancellor to change the accounting rules; we simply follow the external requirements.
However, the OBR expects borrowing to be a little higher than forecast in the next two years and then a little lower in the following two years, so still ending up with a small surplus in 2018-19. The noble Baroness, Lady Donaghy, was sceptical about our ability to achieve that. The OBR estimates the likelihood of the Government meeting their fiscal mandate at about 80%. The forecast shortfall in tax revenues, which is what is slowing us down, reaches about £23 billion in 2017-18. One reason that we are still on target is that two-thirds of this shortfall, £16 billion, is covered by lower debt interest costs, which result from both lower interest rates and inflation because of the indexed component. The noble Lord, Lord Bilimoria, rightly pointed out that we are therefore exposed to those interest rates. I am not going to use my crystal ball, but I think that we all understand that that is a significant risk. The primary reason that we should be so focused on bringing debt down overall is our inability to absorb shocks with the level of interest that we have to support.
There has been considerable debate around the spending reductions required. We had a discussion about how appropriate ring-fencing was—my noble friends Lord Lawson and Lord Wrigglesworth raised that—but in this Parliament we have managed to accomplish £67 billion of spending cuts even with that constraint. Our position is that we can continue to cut spending in the next Parliament at the same rate that we successfully achieved in this one. My noble friend Lord Palumbo talked about grasping the financial reality; my noble friend Lord Stevens said that yes, it can be done. I must admit that I am optimistic about our ability to reduce public spending through efficiency and reform. Part of the problem in making change in the public sector is that there one does not have the discipline of the market that drives and forces change effectively in the private sector, because you cannot survive without change. Frankly, while I do not enjoy the financial austerity that we find ourselves in, forcing people who run the public sector to determine how to do it much more efficiently is an extremely healthy discipline.
We will continue with our programme of efficiency reforms. We have done about £15 billion-worth so far in this Government; there is a plan to do the same again. It means the same things that private sector companies do, with discipline on pay and head count—which has already been practised—and the use of technology, which we are right at the beginning of in the public sector. It means rationalising all the space that we have got and centralising and deploying effectively our buying power. The opportunity is enormous and the challenge is how to grasp it.
We will continue to bear down on tax avoidance, for which my right honourable friend the Chancellor set a £5 billion target yesterday, and we will continue to seek efficiencies in the welfare budget, given that it represents a significant portion of overall spending, by freezing working-age benefits for two years and reviewing the level of the benefit cap.
On living standards, it has taken longer than we would like for earnings to recover; we all accept that. It is not surprising, given the scale of the crisis that we have been through, but the Government have sought to support people during these difficult times. There has been a lot of discussion about who is disproportionately bearing the brunt of this—the noble Lord, Lord McKenzie, among others, brought this up. All the objective distribution analysis that is produced by the Treasury demonstrates that during the course of this Government the weight of the burden has been much more evenly distributed than what was experienced under the previous Government. That is what the statistical analysis tells you. We can have this debate, but the objective analysis does not support the rhetoric that we hear from the other side.
What have the Government done to see us through this period of challenge to living standards? They have had a very active monetary policy to keep interest rates and mortgage rates low. They have raised personal allowances, which was welcomed by my noble friend Lord Wrigglesworth—that has taken 3.5 million people out of tax altogether and reduced tax for 24 million people. The noble Lord, Lord McKenzie, pointed out that that is expensive; it cost £12 billion. The right reverend Prelate the Bishop of Portsmouth was extremely clear about the pressures that people are under. We have done things to contain the cost of living pressures, by acting on council tax, energy bills, fuel duty and rail fares and by raising the national minimum wage—we had some discussion about that and in particular its enforcement, which was mentioned by my noble friend Lord Horam and the noble Baroness, Lady Donaghy. We are putting money into enforcement and it will make a significant difference. And, of course, we have now had a highly progressive stamp duty reform, which many noble Lords welcomed.
Earnings are now strengthening. The OBR forecasts this to continue. For those in full-time work for more than a year, as my noble friend Lord Younger noted, earnings grew 4% over the past year. Real household disposable income, which is probably the best measure of living standards, is forecast to increase by 1.6% in 2014—I should clarify for the benefit of the noble Lord, Lord Skidelsky, that that is 1.6% per capita. We should note that there is a compositional effect in the labour market: because so many more people are finding work, particularly young people, it weighs down on average earnings.
Productivity has been the focus of many comments today—it was absolutely the focus of the noble Lord, Lord Adonis. A number of noble Lords asked where it was in the Chancellor’s Autumn Statement. Growth and structural reform have been and continue to be a key plank of what this Government have been doing. Many of the measures which were announced yesterday were reinforcements of the general strategy that has been in place for some time. Productivity, together with low inflation and a strong jobs market, is at the heart of our ability to give people long-term improvements in living standards. That ambition was so well articulated by the right reverend Prelate the Bishop of Portsmouth, together with his support for church roof funding.
The UK’s low productivity has been a long-term problem. We had a fascinating analysis from the noble Lord, Lord Desai, of why it might be persistent. I am by nature an optimist, and we will find ways to deal with this. Many noble Lords have addressed it. My noble friend Lord Lawson gave the best example of when we have addressed it effectively: our supply side reforms back in the 1980s. My noble friend Lord Horam referred to them as well. They had the enduring impact of the labour market flexibility which has put us in such a better position than our competitors on the continent.
My noble friend Lord Higgins asked how much of our productive capacity was destroyed during the recent financial crisis and how easy it will be to rebuild it, which is what we are going through now. Looking at some of the different aspects of the productivity challenge, on tax, having low taxes, certainty in taxes and making sure that they are paid is a key part of this economic plan. My noble friend Lord Flight reminded us that momentum in business investment, contrary to what some noble Lords said, is developing strongly; it is up 27% in this Parliament, so business investment is recovering. That says something about the current environment, and the confidence that we have talked about.
My noble friend Lord Younger talked about the patent box and how supportive it is of research and development. My noble friend Lord Leigh made the point that large multinationals must pay their fair share and referred to the leadership that my right honourable friend the Prime Minister has shown globally in dealing with the issue. That is why we have introduced the diverted profits tax. Several noble Lords talked about that. The noble Lord, Lord McKenzie, wondered how it tied into the BEPS work. It is tied in, but we are first movers because, again, we are showing leadership. The noble Baroness, Lady Donaghy, asked me how high risk the revenues were. The OBR ranks the risk against each of them: it is medium to high, so not right at the top. The perfect answer to this is that it will divert revenues back into standard corporation tax, because those structures will not be put in place any more.
My noble friend Lord Lawson referred to the reforming zeal of my right honourable friend the Chancellor in both the pension changes and stamp duty. All that I can pass on to the House is that I see my right honourable friend the Chancellor up close virtually every day. I have worked with some of the best people in the private sector and believe you me, he passes my noble friend Lord Palumbo’s capability test.
The rates review has been welcomed by several noble Lords, including my noble friend Lord Rose. On the accelerated investment allowance, the reason that it has been a little stop-start is because it was intended to boost investment now. In that case, there is a justification for changing it. My noble friend Lord Lexden talked about Northern Ireland and competition from the Republic of Ireland. We will be introducing legislation to devolve corporation tax, subject to cross-party talks with the Northern Ireland Executive showing public spending sustainability. We have some significant measures coming through, as per the suggestion of the noble Lord, Lord Bilimoria.
We have had a great discussion on infrastructure, housing and regional growth. I could not agree more with the consensus around the House that we need to stop stop-go. Every day in the Treasury we do things to try to change that by putting in place long-term funding and long-term plans addressing the fundamentals. That is why we put the Davies commission in place: to sort out the south-east England runway capacity question. Our focus is absolutely on making things happen. I thank my noble friend Lady Bottomley for her kind words on that. On the HS3 project plan, we will see an interim report on transport for the north from the DfT in March 2015, so that will be the next step, replying to David Higgins’s work.
The noble Baroness, Lady Worthington, talked a lot about the merits of state versus private sector investment. The reality is that the right way to do this is a combination to maximise the amount of investment that we can get in. The skill is in structuring it right so that we get the appropriate outcomes. That is what we are working on. There is a big focus on access to finance for SMEs by extending FLS, which my noble friend Lord Leigh talked about. He also welcomed the introduction of another £400 million for the enterprise capital funds programme at the British Business Bank. My noble friends Lord Lawson and Lord Stevens and the noble Baroness, Lady Donaghy, wanted us to continue our work on cleaning up the banks. We obviously agree.
Exports are critical. My noble friend Lord Younger asked about the extra £45 million; £20 million of that will go to help first-time exporters, the other £25 million will go to help people in the emerging markets. There was lots of focus on skills, including by the noble Lord, Lord Adonis, and my noble friend Lord Jones. We could not agree more. Even on the infrastructure question, we have now moved beyond the pressures to deliver because the rate of delivery is such that the industry is concerned about skills. There was lots of welcome for the postgraduate scheme, including from my noble friends Lord Wrigglesworth and Lady Bottomley.
I am running out of time, so I shall not go on about our long-term commitments on science and innovation which the noble Lord, Lord Hunt, talked about. We obviously welcome the entrepreneurial explosion discussed by my noble friend Lord Flight.
Finally, I thank my noble friend Lord Younger of Leckie for introducing what has been a fascinating although highly truncated debate.
My Lords, any debate on the economy and the Autumn Statement—perhaps it should be called a Budget—is necessarily wide-ranging. This debate has brought out some excellent and markedly different perspectives on yesterday’s news. I particularly enjoyed listening to the interesting arguments behind the speech of my noble friend Lord Palumbo and the speech on budgetary cuts by the noble Lord, Lord Skidelsky—although I was not entirely in agreement with either. We were much lifted by the maiden speech from my noble friend Lord Rose. Some key high-level messages came out from his long experience in business: first, stay close to your customers; secondly, keep your fingers on the pulse; and, thirdly, be prepared for change in a changing world. That is very wise, and I have no doubt that he will be a great asset to the House.
In the final moments, I will just draw together some of the key common themes that arose during this two and a half hours. First, skills shortages are a genuine obstacle to growth. That was raised by the noble Lords, Lord Adonis and Lord Bilimoria, and my noble friend Lord Jones. It is interesting that my noble friend Lord Palumbo said that we needed skills for getting things done. I presume that he was alluding to better management skills, which are important.
I am glad that my noble friend Lord Deighton raised the issue of productivity. The noble Lord, Lord Desai, made a very interesting point about productivity. It may well be that we get wage growth up, but the danger is that it is not matched by productivity growth, or indeed GDP per head.
Finally, some important points were made about confidence. That is often talked about, and the level of business confidence is very important. That was raised by my noble friend Lord Rose and the noble Lord, Lord Bilimoria.
I conclude by saying that I, too, congratulate my noble friend Lord Deighton on his important work in pushing through these important infrastructure projects, and I again thank all Peers for their contributions to this debate today.
Motion to Take Note
My Lords, during the 1980s there was ready acknowledgement that sport and politics were uncomfortable bedfellows: that sport was a recreational activity, principally for amateurs to be enjoyed in leisure time, and that government responsibility was limited to a total departmental budget of less than £50 million. In the 1990s, that perception changed. Sponsorship, television rights and the world wide web fuelled a burgeoning market which, by 2004, generated an economic impact of €407 billion and employed 15 million people in Europe. Yet politicians left the world of sport principally untouched by legislation.
Since then, the world of sport took flight from the sovereignty of Parliaments. FIFA, the IOC and international federations designed their own lex sportiva. They built frameworks to control doping in sport through WADA, while their own governance of sport became accountable to the Court of Arbitration for Sport. Sport had become so powerful a universal language that the international federations found themselves able to determine legislative changes in countries keen to benefit from the sporting gold dust of hosting the Olympic Games or the World Cup, securing legislation and providing open- ended multibillion dollar guarantees to which Governments would often bend the knee.
At the same time some politicians, many of whom are participating in this debate, have taken a more visionary approach—not least the noble Baroness, Lady Brady, who could not be more welcome in your Lordships’ House. They saw the value of sport in the promotion of a healthy and active lifestyle to combat obesity, the value of competitive sport in schools and the opportunity that sport created to divert the socially disenfranchised off the escalator to crime.
In summary, nothing short of a tapestry of government and political objectives became woven into the world of sport, while sport and recreation has now become an important contributor to virtually every department of state. As my noble friend Lord Holmes said at the governance of sport seminar organised on Monday by Slaughter and May, there is no separate world of sport. Not surprisingly, the moment has arrived when the worlds of sport and politics need to find an alignment to create a mutually acceptable legal framework to protect the sportsmen and the fans who increasingly call for improvement in governance, both nationally and internationally.
It was for that reason and at this time that I wrote the Governance of Sport Bill, a Bill intended to stimulate debate on a range of issues central to the development of sport in the United Kingdom. As time available before the 2015 general election means that the Bill will not make progress through all its parliamentary stages, I hope that today’s debate will attract the attention of those responsible for the task of drafting manifestos and developing sports policies for the future.
The autonomy of sport is important but it must be earned; it is not a right. Governments, either directly through Treasury support and financial guarantees for major events or indirectly through lottery funding, have significantly increased investment in the sector. We need to address the consequences of this generational change. We also have a duty to capture the imagination and inspiration of a nation looking to Government to deliver a sports legacy from the London 2012 Olympic and Paralympic Games—a legacy that is still capable of transforming the sporting landscape of the United Kingdom in terms of facilities and opportunities, especially for children, both able-bodied and disabled, in all our schools. In this context, the Bill endorses the all-party consensus of the work of the House of Lords Select Committee on Olympic and Paralympic Legacy, which sought far-reaching reforms to secure the sport and urban regeneration legacies required in the future.
I also sought to draft a Bill which would bring professional management, accountability and transparency to the organisations that run British sport. The need for good governance in professional sport is no less and no more than the requirements for FTSE companies. It is essential if we are to protect the interests of athletes in the future. Only by demonstrating good governance in sport can Government and British sports administrators use their influence internationally to good effect. Only through the introduction of best governance to international federations will the problems that have already beset the IOC, FIFA and Formula 1 in this century be consigned to history.
In that context, I believe that we need to promote the interests of supporters and spectators. Supporters should have seats on the boards of their football clubs, thus ending years of disfranchisement. We should strengthen the opportunities for disabled access to sporting venues, in line with the guidelines of the International Paralympic Committee. We need athletes charters, ensuring that the voices of our sports men and women are heard and that the many concerns they express are acted upon by governing bodies of sport that are truly fit for purpose. We should look to Government to become more directly accountable to Parliament for the formulation and delivery of sports policy, principally but not exclusively through the Department of Health and the Department for Education, the Home Office and the DCMS. We should also look to Government as an enabler and to the Minister responsible to have the influence to co-ordinate policy from the centre.
Specifically, I believe in the increased accountability and transparency of governing bodies of sport which are partly, wholly, directly or indirectly in receipt of public or lottery funding. We should introduce legislation to implement wider application of the Equality Act, while acting against the continuing unacceptable and outdated discrimination against women in certain clubs, despite the welcome steps taken recently by the R&A at St Andrews. I am of course of the view that we should place the interests of sports men and women at the heart of all aspects of sports policy by including a proposed new single entity overseeing government and lottery funding in sport. It should: have the mandate to empower governing bodies of sport but not to micromanage their activities; require better protection for athletes at risk of concussion and injury; and address the disillusionment of an increasing number of athletes, who feel that the fight against doping has lost direction and momentum. Those who knowingly cheat fellow athletes out of selection and career opportunities by taking performance-enhancing drugs should face criminal charges, as they do in Austria, France and Italy; it is now proposed in Germany and parts of Australia.
There needs to be recognition that the World Anti-Doping Agency should move away from the unacceptable premise that athletes are guilty before being proved innocent to a globally fair, effective and just system which respects athletes’ rights and ensures that their voices are heard. WADA needs to be an effective global body in the fight against doping in sport, but it cannot be until its rules are universally applied, until monitoring is the same in every country and until the regulations set out in the new code which comes into force in January, particularly on intent, emerge from what I predict will be years of legal wrangling and lengthy hearings.
I recommend that Government should be directly and effectively accountable to Parliament for decisions regarding the future of British sports. For example, there was the withdrawal of substantial lottery support from a wide range of Olympic and Paralympic sports in 2014, including basketball, synchronised swimming, water polo, weightlifting, football for the visually impaired, wheelchair fencing and goalball. I support those who argue that there should be a presumption in favour of equal prize money, requiring event organisers to explain publicly their reasons for not giving equal prize money to men and women.
I hope that future Governments will require an annual report to be laid before Parliament by the Secretary of State for Health, setting out policy objectives to deliver a proactive health agenda through the promotion of sport and physical activity programmes to tackle obesity and enhance healthy lifestyles, and suggesting measures to be introduced to increase participation—male and female, able-bodied and disabled—in active leisure pursuits.
I also hope that future Governments will require an annual report to be laid before Parliament by the Secretary of State for Education, documenting the state of physical education and sport in schools in England and Wales, while setting out policies and financial support to improve facilities and opportunities for all young people. It should include the consideration of: a longer school day; the need for improved teacher training provision in sport and recreation; and strengthening the role of Ofsted by requiring its inspections to cover the quantity and quality of physical education, physical activity and sport provided during and outside school hours. It is also incumbent on Parliament to introduce a wide range of measures to improve safety for cyclists, as well as delivering measurable targets for boosting cycling across the country, ensuring cycling networks for commuters and auditing road projects in order that they become cycle-proofed.
The report in February 2010 from the Sports Betting Integrity Panel, known as the Parry report, was a seminal document. We should bring UK legislation in line with the leading countries of the world in the fight against match fixing, bribery and corruption, regarded by the former IOC president Jacques Rogge as the greatest threat to the integrity of sport in the run-up to the London Olympic and Paralympic Games. We should, with cross-party support, continue to challenge the £1 billion fraud industry by ticket touts by always placing the interests of the consumers, the sports fans, first.
I hope that we will further protect playing fields from being lost to development, and that sports facilities under threat are secured to meet the sport and recreational needs of both current and future generations. In my view, this should lead to a presumption in favour of the maintenance of the status quo, in the absence of compelling evidence to support the loss of sports facilities. We should go further in helping the governing bodies of sport. We should give them the ability to generate income through the extension of intellectual property protection at major sporting events. These are some of the building blocks for a true sports legacy from the Olympic and Paralympic Games. They build on the experience of London 2012. We should consider regulating advertising and trading within the vicinity of major sporting events, enhancing the protection of logos of the governing bodies of sport and thereby increasing income generation for the benefit of the athletes that they represent.
I hope that the next Government consider a wide range of additional measures, including the merger of UK Sport and Sport England into a new entity—called, let us say, Sport 2022, a proactive, forward-looking body, as its name suggests, providing light-touch regulation to governing bodies of sport but assisting them with the implementation of sports policies presented by the Government to Parliament for approval over the next two Olympic cycles, including recognition in the Bill for the application of British Cycling’s “aggregation of marginal gains theory” across all sports; an obligation to set out the progress made on urban regeneration, inside and outside the Queen Elizabeth Olympic Park; and the importance of a lasting and far-reaching sports legacy throughout the United Kingdom.
The overwhelming majority of these measures can be implemented through voluntary agreements, which is preferable to legislation. There is an urgency for action and a commitment to design and implement a comprehensive sports policy. The DCMS must lead and be without reproach in its own governance if it hopes to win the respect and support of the sports agencies, Sport England and UK Sport, which in turn need to lead by example if they expect to see improvements in the governance of the governing bodies of sport. At each and every level, open, transparent and foolproof policies should be implemented to ensure that no conflicts of interest exist and that the toughest of action is taken if they do. Sports administrators should not be making personal fortunes out of the business of sport. Inevitable conflicts of interest arise, and if it would be unacceptable governance in a FTSE 350 company, it must be unacceptable around the boardrooms of sports governing bodies and international federations.
Governments and sponsors should engage openly and consistently with international federations of sport, particularly, at this moment in time, with FIFA. Only with a co-ordinated international approach will such an approach be successful. A co-ordinated international approach to governance is critical if we are to defend the interests of sports men and women both here and abroad. I beg to move.
My Lords, it is a real pleasure to follow the noble Lord, Lord Moynihan. His introduction of the words “lex sportiva” is a major insight into some of our current problems and, at the risk of embarrassing him, I express my complete support for everything that he has said. I also welcome the noble Baroness, Lady Brady. I think that Karren will probably find, after she made her maiden speech, that this is a much more tolerant environment than any that she has met in football.
Football is not the only sport with a poor governance standard. The DCMS report was scathing and it was right to be. The IOC and Salt Lake City spring to mind, with doping in many sports. Often it has taken the world-class sponsors, which no longer accept that their brands should be associated with criminality, to intervene and sometimes force change.
All sports are expected to have good governance and regulatory underpinning; it underpins fairness, competition and real transparency. This has always been essential. Fair betting, competitive integrity, child protection and ensuring competition between athletes rather than the chemistry labs that sometimes stand behind them have always been in the regulation of sport. When it fails, we are angry because sport provides us with the context for many of our values. We can because we care about those strong values—that is the basis—yet so often we fail.
I had the honour of being the first independent chairman of the Football Association in almost 150 years, a post flowing from the report by the noble Lord, Lord Burns, on the decades of governance failure in that organisation. I have discussed this with David Bernstein, who was the second independent chairman and, in my judgment, a quite exceptional one. These are my words, of course, but I believe that he and I are on the same page, based on the experience that, unusually, we have come to share.
The FA’s council is huge and unwieldy. It is nothing like our country or even like football. It is elderly, male and almost entirely white. Its labyrinthine committees mostly impede change if they humanly can. Its board is unrepresentative and dominated by vested interests. The Premier League is of course a great commercial success in many ways, but board decisions in the FA are largely the decisions of the Premier League. The conflict of interest there lies in the overwhelming economic power and the positions that it occupies in the board structure. The necessary strategic oversight to build a better England team or help the 5.5 million local players is not there, and it is designed not to be.
The board is not independent or transparent because, from the start, it was designed to be none of those things. None of whatever we regard as important—the rights of fans, levels of debt or fit and proper persons, so woefully neglected at Portsmouth and Leeds—is addressed by the Football Association. Noble Lords may be thinking, “Surely the Burns report dealt with just this”, and quite right, it did. However, almost none of the report has been actioned. I was repeatedly told that there was no appetite to action it. Goodness knows how hard David Bernstein laboured to do it, but he also found it difficult to achieve change.
Could the FA change? In theory. Will it? No, certainly not. Will it resist? Certainly it will, and we should insist. A sports law should be setting out the basic governance and transparency standards rather on the model of a FTSE 350 company, which I wholly support, including a majority on its board of independent directors. If the FA will not change, I suspect that it will be necessary to appoint a commissioner to do the regulatory job right across the whole of the sport, as many sports in the United States have found to be such a decent model. The alternative, I am afraid, is a sporting embolism —a blockage in an otherwise healthy system, caused by clots.
Having mentioned clots, I turn to FIFA. Candidly speaking, you could not make it up: systematic corruption over decades, overseen by a group who have been there through those decades; World Cups awarded by a committee, nearly half of whom have been compelled to go and some of whom jumped just before that point; whistleblowers and investigative journalists disregarded; and no embarrassment quite enough to prompt any action. A senior United States lawyer is appointed to investigate but not to see the people who have already been exposed as corrupt, nor to review the huge Sunday Times documentation. Mr Garcia writes a long report that is not to be published. A German lawyer employed by FIFA writes a summary. Mr Garcia denounces it four hours later as inaccurate and defective. Still, no one wants to publish the actual documents. Candidly, I was surprised to be criticised for not helping Mr Garcia, although I was restricted to a sub judice restriction because I was being sued by a member of the FIFA executive for suggesting that there might be corruption in that organisation.
It would all beggar belief—but there is not quite enough disbelief, in a way. The England 2018 bid team apparently also has a secret dossier with potential evidence of widespread corruption. When asked by Mr Justice Dingemans, and I think by the Select Committee, it said that it had no further information. I must tell your Lordships that I would have loved to have seen it. It would have gone immediately to John Whittingdale and his committee, who would have been the people to judge whether it was appropriate to move further—not those who did not want it to be seen.
Again, I believe my thinking here is very close to David Bernstein’s. I will just say about FIFA that it needs root and branch reform. Its culture will not be changed by tweaking the processes—culture is always stronger than processes. Mr Blatter and the old school must go. His intention to run again is bad for sport.
I beg the noble Lord’s pardon. I have one or two concluding sentences.
The Swiss Government and the major sponsors should be involved, and the bids for the World Cup in 2018 and 2022 should be rerun. If England has anything to say about vote swapping which is not to its credit, let us come clean as well, and not advocate to others what we are not prepared to do for ourselves.
My Lords, the noble Lord, Lord Triesman, can have 30 seconds of my speech for that.
When I knew that we would be debating sport and governance in sport, I first had to have a little think about what exactly we mean about governance. Is it the structure of governance, the governance of sport itself or an approach? Fortunately, I was let off that hook a little by my noble friend Lord Moynihan, who expanded on that point. I felt that sport is far too important to be left in those little tight groups we have heard about already—the “blazerdom” of the old. Indeed, Will Carling may have had a very great career in rugby, but when he lobbed that grenade about “57 old farts”, he probably did more to change rugby union than anything he did on the pitch. That body now has to look out.
We are in a post-lottery funding age—post public money going in. We have a greater opportunity to demand to know what is going on, and it is checked, than we have ever had in the past. We have a culture of the amateur running things. They recruit their funding from their membership, with a little sponsorship from outside. That culture is effectively now a previous stage of evolution. We have gone on to something new and different. We must make sure that everyone knows what is going on if we expect everyone to give support. Even if you do not directly take public money, as my noble friend Lord Moynihan said, if sport is seen to have a direct link to health and to be an important part of the education system, you are still a part of that system, so government should be prepared to intervene when necessary. We can argue for ever about when that necessary point comes, but everybody agrees that it is there somewhere.
What do we expect to get out of this? We expect a sport that people can enjoy, either as spectators or, more importantly, as participants, so the mass of the population have access to it in a way that is not totally confined to—let us say—pressing a button on a remote control and watching an image on a screen. We are inclined, in this new professional era, to put too much emphasis on that process of watching as opposed to the process of participating. I hope that we can have a degree of focus on allowing people to participate and feel that what they are doing is being rewarded and valued; and, when it comes to governance, making sure that that process is enabled to happen is the first thing we should ask any governing body—or any person who runs and controls sport—to do. What is the duty and interaction between those who are on the front line in this—those who provide the basis? Professional sport needs you to take part to find its talent.
All that interaction has to be looked at, but we must never forget those people I have heard described by professional sportsmen as the “weekend warriors”. My comment on that was, “Great. These are the people who allow you to function, so I’d change your language”. If those people are allowed to get out there, take part and give you the basis for what you do, you must support them. I remember that I promised to give the House back a few seconds. If we are to do that, we have to make sure that everything we do affects beneficially those at the bottom, on the ground. If we do not support those at the bottom, ultimately, regardless of whatever we do in a committee room, or however much we pay and hone those at the top, we will fail.
My Lords, I am delighted that the noble Lord, Lord Moynihan, has secured this debate.
When I hear the word “governance” I think of openness, transparency, diversity and equality, but also monitoring, evaluation, ticking boxes and lots of paperwork. Sadly, as the noble Lord, Lord Triesman, so eloquently explained, most of the time the international federations receive media attention because of an absolute lack of good governance. The worst offenders are blasé, arrogant and wrongly believe that great performances on the field of play allow them to behave completely unacceptably behind the scenes.
Back in 1996, I sat on the English Lottery Awards Panel, which had the privilege of allocating £20 million per month to capital projects and which challenged outdated rules of membership. When the National Lottery Act changed, I moved to UK Sport. At the time many national governing bodies were well meaning, but funding forced them to modernise. Unfortunately, a few still need to move forward. We need to find ways—whether through changing their lottery funding or through other methods—to encourage them to behave better. National governing bodies have many responsibilities; protection from concussion is one, but also they influence how physical literacy is taught in schools. Education and sport must work much more closely together. While there are examples of good practice, teacher training at primary level needs to be revolutionised.
A recent report showed that in 30% of sports men are paid more than women, and I cannot even begin to describe the unparliamentary language used to describe me when I suggested that there should be greater equality. In business it is accepted that a diverse board is more successful. Why, then, do six national governing bodies still have no women on their boards? Only 49% have met the 25% target. Can Her Majesty’s Government say what work is being done in this area? Perhaps it is time for a Title IX equivalent.
National governing bodies also have a responsibility to develop disability sport at all levels; it is not an add-on. Disabled children must have access to physical activity in schools—they cannot be sent to the library. I was recently told about the case of a young wheelchair user who wanted to play badminton but was rejected by the club because she was told that her wheels would mark the floor. Wheels do not mark the floor any more than trainers—that is simply discrimination.
I would also like to see those who host major events take disability access as seriously as LOCOG did in 2012. I am delighted that the noble Lord, Lord Holmes, is in his place and commend his work. At the Games, I was actually able to sit with my family and had a line of sight, which, if you are a wheelchair user, is not as common as you would expect. I also commend the work of Level Playing Field, which does excellent work in this area to highlight the lack of accessibility within Premiership football clubs.
I have worked with some really exciting and innovative organisations but have also had the experience of sitting on the ill fated UCI Independent Commission to look at the case of Lance Armstrong. Here was an international federation that made the pretence of wanting good governance. I was going to say that it invested rather a lot of money, but in fact it spent it on doing nothing. The commission did not receive a single document from the UCI. Cycling, and all sports, deserve a federation that not only says the right thing but does not ignore its responsibilities. Perhaps the best thing to come out of the commission was that it led to a change in leadership—which was not what we set out to do.
What we cannot forget is that most people in sport are volunteers. They had the biggest influence on my own athletics career, but we expect a lot from them; we expect them to revalidate their coaching awards and to do child protection, first aid and health and safety. Join In recently produced some research in which it assessed that an estimated 45% of volunteers within the 150,000 sports clubs in England are engaged in governance roles, such as committee members. Sport would not survive without these people. The research report, Hidden Diamonds, found that each sports volunteer generates more than £16,000 of social value every year, which equates to a staggering £53 billion of social value when it is scaled up. Governance volunteers are among the most active and giving, and 70% of them give their time at least once a week. These people should be praised, encouraged and thanked. It would be wonderful if those involved in sport at the highest level behaved like some of the people working at the grass roots because, without them, sport as we know it would not exist. I look forward to future debates on this subject.
My Lords, it is a great honour to speak for the first time in your Lordships’ House. I want to begin by thanking your Lordships for the wonderfully warm welcome I have received from all sides of the House. The assistance and, above all, patience shown to me by noble Lords from across the Chamber and by the clerks of the House and all the staff whom I have encountered since I took my seat here have been truly wonderful—so, thank you.
My career in sport started in 1993 when, at the age of 23, I became the managing director of Birmingham City Football Club. There I was, desperate to look at least 25, turning up with my big shoulder pads and my big hair. During those early days, I was banned from boardrooms, ridiculed as a publicity stunt and displayed in the media as everything from a ball-breaker to a bimbo—all because I was a woman, and a young woman at that. However, when, at the end of my first year, my football club made a profit for the first time in its modern history, people began to raise an eyebrow. When I sold the club in 2009, it was profitable, playing in the Premier League with an award-winning stadium, a community programme and sell-out crowds and, notably, 75% of the senior management team were women. A lot more than an eyebrow was raised—a whole hairline! It has been a wonderful journey of knocking down stereotypes and encouraging women and young people into my industry, and I have been fortunate enough to meet and work with many people whose lives have been transformed by sport.
Sport is an industry worth more than £20 billion. Our Premier League, considered the greatest league in the world and in which my team, West Ham United—I declare my interest—is fifth, is one of the UK’s best exports, with a global audience of 4.6 billion. It is clear that sport helps to ensure that our country maintains its status on the global stage, but it is at a much more local level that I have seen sport at its most effective. Its ability to break down barriers and provide opportunity, particularly to young people and those who need it most, is its true power, as is seeing it being utilised to promote equality and diversity. That is why I have chosen to make my maiden speech on the governance of sport, which I hope will act as a catalyst for debate both inside and outside Parliament.
The Governance of Sport Bill, which my noble friend Lord Moynihan presented to the House, provides the background to our debate today. It seeks to capture the inspiration of a nation looking to government to deliver a sports legacy from the London 2012 Olympic and Paralympic Games—a lasting legacy capable of transforming the sporting landscape of the United Kingdom in terms of facilities and opportunities, especially for children, able-bodied and disabled, in all our schools.
One need only look back to London 2012 to witness how sport can bring people, and in this case our entire nation, together. At West Ham, we were delighted when Mayor Boris Johnson made the historic decision, which he described as,
“a truly momentous milestone for London’s Olympic Stadium, ensuring its credible and sustainable future”,
to award us as the anchor tenant who will occupy the stadium from 2016. The Olympic stadium and, indeed, Queen Elizabeth Olympic Park as a whole, presents a real opportunity to rejuvenate and regenerate the east of London. It will be a hub for commerce, culture, education and sport, but it also provides the unique opportunity to reconnect communities. Football may be a sport, but it is also a language that seeks to unite people. We have always known that we have a crucial role, which West Ham United will play in acting as the focal point for this powerful community convergence. As my noble friend Lord Coe himself said of our proposals:
“It lives with the commitment we made in Singapore”.
Our move to Stratford will create more than 700 jobs, provide over a million visitors to the park each year and be an opportunity to help tens of thousands of disadvantaged youngsters through our community outreach. I assure noble Lords that work is already well under way to begin to deliver a lasting Olympic legacy for London. West Ham’s own Community Sports Trust has offered 1.5 million opportunities and developed an extensive model of health, education and sports development programmes. Social mobility is the key driver for the trust. This year alone, 10,000 youngsters in Newham and 8,000 in Tower Hamlets engaged with our Kickz scheme, which has had a tangible impact on reducing anti-social behaviour. Our Inspire centre provided out-of-school study support to 6,000 underachieving children in Newham, and these numbers will grow exponentially now that our move is confirmed. My personal passion, our employability, training and mentoring scheme, has engaged with more than 15,000 youngsters via our programmes this season, but our delivery in this area is now set to double as a result of the move. Our partnership with Leadership Through Sport reaches young people whom employers may otherwise struggle to find. Every single trainee has an east London postcode and, for us, it is wholly unacceptable that local youngsters grow up within earshot of a flourishing Canary Wharf and yet, too often, are effectively worlds apart. Schemes such as these will, little by little, change that through sport.
Encouraging engagement with sport can result in wonderful things; it changes people’s lives for the better. Sport has enabled me to change and develop two great clubs in this country, to pioneer charities that support causes close to my heart, to champion equality and enjoy the camaraderie that fighting for a common goal can often achieve. I am honoured to be in this House, and I hope that from within Parliament I can continue to encourage and promote the aims of sport, the benefits of good governance and the realisation of the dreams and aspirations of young people; and thus work on an all-party basis in this House for the betterment of life through sport and recreation throughout the United Kingdom.
My Lords, it is a pleasure and a privilege to follow such an eloquent speaker. It is the first time in my sporting history that, as a Wolves fan, I have been able to speak not through gritted teeth when Wolves were playing Birmingham City, saying, “Well, you caught us on a good day but well played”. That certainly was well played. Karren—if I may be so familiar in these surroundings—was referred to as the “first woman in football”. Within this House we have somebody who not only understands 4-4-2 but probably also understands the complexity of HS2, as well—and even knows the offside law.
The noble Baroness omitted to say that, at the tender age of 23, having taken over as CEO of Birmingham City when it was in receivership, when she actually sold the club—or collectively the club was sold 16 years later, and it was publicly documented—it was sold for £81.5 million, which is not too bad on the CV. She has been Small Business Ambassador for the United Kingdom Government, author, columnist and, most importantly, an aide to the noble Lord, Lord Sugar. I remind the noble Baroness that according to Chamber etiquette you are not allowed to cross the Floor and point to the noble Lord and say, “You’re fired!”.
She was honoured with a CBE for entrepreneurship and services to women in business in 2014 and listed as 10th in the Guardian’s 50 most influential women in sport. The depth and knowledge of her maiden speech is to be most admired and demonstrates her great experience in sport. We welcome her to this House. I am sure that she could have been called the noble Baroness, Lady Brady of the Boleyn Ground, West Ham, but we know that now West Ham are the main concessionaires for the Olympic Stadium, it is in extremely safe hands, and the legacy retained will be good.
Moving into extra time, I speak in favour of the Bill before this House, and declare my interest as a member of the England and Wales Cricket Board. I shall try to present a sort of case study in line with what the noble Baroness, Lady Brady, has done for football. As with all governing bodies, cricket’s responsibility is to promote and develop the game at all levels. In recent years the ECB has invested a huge amount of resources in modernising structures to ensure that we can effectively support and develop cricket at all levels. Cricket is for everyone, from the able bodied to those with disabilities. The chief role of our governance is to be inclusive and open, and to work to promote the interests of players, coaches, volunteers and spectators.
The Bill introduced by my noble friend Lord Moynihan is particularly pertinent at this time, and for that we thank him most genuinely. It is a true reflection of the type of legacy for sport that we seek from the 2012 Olympics. The interface between politics and sport can help to drive improvements in governance that will have a direct benefit on the health of sport, and of our nation. But there is a never-ending list of regulatory issues and challenges for sport. The Bill clearly defines what governing bodies can expect from the Government, and what standards the Government expect of national governing bodies to merit funding.
One must not understate the contribution sport makes to the British economy. The relationship between sport and business is intrinsic and, as has already been mentioned, the principles of good governance in business apply equally to the world of sport. The Chancellor reminded us yesterday that we still face tough economic times, but I would like to mention the fact that in 2010, for example, sport’s gross economic contribution to the nation was £20.3 billion. It currently employs 440,000 people and is ranked in the top 15 British industries.
The ECB now has two female independent board directors—not a bad percentage. The other is Jane Stichbury, a former chief constable, who provides strategic support to our anti-corruption unit. Good governance in women’s and girls’ cricket has led to a 507% increase in the number of cricket clubs with women’s and girls’ sections—an increase from 93 to 565. Sky Sports and BBC radio are to broadcast live all seven women’s Ashes matches next summer, and women’s cricket now has a stand-alone sponsor, Kia Motors—and there are no backhanders there that I have to declare, I have to declare. Professional contracts for centrally contracted players now make the England team one of the highest paid national teams in the world. When I played cricket —here we go, back to the dark ages—we had to pay for our air fares, our blazers and the rest of our kit. Once I was given a free pair of cricket shoes with three green stripes on the side, and was branded as a professional by our committee.
Good governance promotes diversity and inclusion, and the proud achievements of the ECB incorporate blind cricket, deaf cricket—no problems with the umpires there, I am sure—and cricket for those with learning disabilities. These teams have triumphed variously throughout the world. We have embarked on a programme of engagement and development across the south Asian communities to help drive participation in five major cities.
As has already been mentioned, match fixing poses the single biggest threat to the future of sport, and we must guard against that by means of my noble friend’s Bill. We must have confidence that the sport that we are watching is open and fair. Let us not forget the fans—the consumers. I am pleased to see that there is a deterrent in the Bill aimed at those who seek to use the web as a conduit for ticket touting. Those who rip off real fans by acquiring tickets with the sole objective of trading them on for huge profits have, ironically, no interest in protecting the future of the very sports they wish to exploit.
It is my hope that today’s debate will stimulate further discussion that will lead to better policy, and thus better governance, in sport, with full government recognition of sport as a catalyst to build the “three Hs”—a healthy, happy and honest nation.
My Lords, I, too, congratulate the noble Lord, Lord Moynihan, on initiating this important and timely debate, ahead of his Private Member’s Bill, the Governance of Sport Bill, which will spell out a comprehensive road map for an effective policy for the future. I also, of course, congratulate the noble Baroness, Lady Brady, on an excellent maiden speech. Many of us will welcome a Baroness coming here and speaking on behalf of sport, as so many of our colleagues present in this debate already do.
The noble Lord, Lord Moynihan, and I go back a long way. We have both done a bit of sparring on sporting issues. Indeed, we have also done some sparring in the ring as well: we both boxed for Oxford, although at different times and at different weights. More seriously, we have both engaged in sports debates, especially in the other place, when I shadowed him when he was Minister for Sport. It is fair to say that in the vast majority of cases we have been colleagues, taking up the fight on behalf of sport, on issues such as the ill advised boycott of the Moscow Olympics and the selling off of playing fields—even though that was by his Government—and many other issues.
On the subject of the Moscow Games, I am reminded of a time in the English-Speaking Union in 1980, when I moved a motion that we should not boycott the Games as Margaret Thatcher had recommended. In the course of my speech I noticed a young man dressed in a tracksuit coming into the debate and speaking on my side—and we won. Afterwards I discovered that that person had hastily travelled from Henley, where he had been a cox—and it was the noble Lord who has moved the Motion before us today. The noble Lord went on to the Moscow Olympics and won a silver medal, accompanied by someone who was then thought of as his accomplice in crime—the noble Lord, Lord Coe, who won his gold and silver medals at the same Games.
The noble Lord and I have crossed party lines from time to time. Even last week or the week before, under his leadership and that of the noble Baroness, Lady Heyhoe Flint, we made significant progress on the issue of ticket touting and protecting fans from the actions of unscrupulous ticket touts. The amendment to the Consumer Rights Bill was passed by this House, and hopefully the Government will recognise the will of the House and see that the amendment is enshrined in law.
I will touch briefly on betting and its integrity. Unfortunately, in the Labour Party’s sports policy that I wrote in 1997, we did not mention it at all. That goes to show how fast things move in sport. With the growth in betting worldwide, it could now be defined as the biggest threat to the integrity of sport. As a consequence, some of us have sought to secure a change in the Gambling Act 2005 and the Gambling (Licensing and Advertising) Act 2014.
At the moment we have a patchwork of laws and policies to deal with match fixing. They may just about do the job. The jury is out on that. But they could be clearer and more concise. We certainly need more consistency in the definition of the offences committed by those who cheat. The Gambling Act, which should be the flagship policy, has a maximum sentence of just two years for those who may be involved in highly sophisticated financial and sporting corruption. In my view that is just not enough.
Betting operators are the only commercial services that directly use the content produced by sport without making any payment for the use of that content. Historically, UK copyright law gave sport protection over the use of its content, such as fixtures and match data, by betting organisations. Indeed, for more than 40 years the pools companies paid football for the right to use fixtures data, which was a vital source of income for football across the country, particularly smaller football clubs. The noble Lord, Lord Faulkner, must take great credit for his major contribution when he was vice chairman of the Football Trust.
At a time when we have such pressure on public budgets, it seems that the priority for politicians is to empower some to earn a fair return from betting, as they used to, and to charge them with spending that money on the grass roots of sport. I declare an interest as the current president of the Football Foundation, which has a great interest in grass-roots sport.
I conclude by once again congratulating the noble Lord, Lord Moynihan, and those who have taken part in this debate. I hope that the Government recognise the content of this debate when they enact legislation in this area.
My Lords, I, too, congratulate the noble Lord, Lord Moynihan, on securing this important debate and the noble Baroness, Lady Brady, on her maiden speech. She may remember that my team, Cheltenham Town, visited West Ham in a cup match a couple of seasons back, unsuccessfully. We are hoping to be drawn against it in the FA Cup this year, as long as we squeeze past Dover Athletic on Sunday. The kick-off is 2 pm. The noble Lord, Lord Sugar, may remember that Cheltenham Town was drawn against Tottenham Hotspur a few years ago in the FA Cup, and I invited him to the replay, expecting him to say “Thank you very much”. Actually, what he said was, “You’re out”, which I imagine is the footballing equivalent of “You’re fired”.
Some years ago, I attended the annual general meeting of what was then the CCPR, the Central Council of Physical Recreation. The guest speaker was the former Welsh rugby maestro Cliff Morgan. He had some serious messages. First, he told us that 25% of 11 year-olds were suffering from the early signs of heart disease caused by poor diet and lack of exercise. He told us of the importance of getting young people into a fitness regime early, and he told us about a young boy from a small Welsh village who just loved running. Eventually, he represented Great Britain at the Olympic Games. He did not win a medal, but the village held a celebration for him when he returned from the Games. His eyes sparkled as he told his friends and neighbours, “I broke bread with the rest of the world”. It had changed his life. That young man had joined a local athletics club run by volunteers.
We have heard from the noble Baroness, Lady Grey-Thompson, about the importance of volunteers. Good governance in sport is essential not just at national or international level; it is vital for the 150,000 local sports clubs across the UK. These clubs are fantastic local assets, almost entirely volunteer-run. They fulfil vital community functions, helping people to stay fit and healthy and creating social networks for young and old. They have an enormous amount to offer in governance and beyond.
I asked Cheltenham Town Football Club what I ought to say in this debate. It gave me a very long moan. I shall read part of it.
“Overall sport does not have the right balance between financial interests and the need to create fair competition on the field. Money dominates everything and supporters do not receive a good enough deal in terms of the amount that it costs to watch sport and the fact that many of the participants are at a competitive disadvantage. You could argue that the fact that attendances remain high and TV and commercial rights remain strong is an endorsement of the status quo. But we are storing up problems for the future by pricing the next generation of supporters out of, for example, Premier League football and by creating an even greater focus upon a small number of teams. A lot of good work is done by the FA at grassroots level but in terms of the higher profile game, most of the power rests within the Premier League because they have the financial clout”.
The view of the chairman of Cheltenham Town is that:
“Governing bodies in all sports should adhere to a set of constitutional principles aimed at furthering the sport for future generations, ensuring widespread participation and fair competition wherever possible, instead of just trying to make as much money as they can. Unfortunately to achieve this would take a stronger regulatory arm than is currently available to an organisation such as the FA”.
I know several sports clubs run by volunteers in Cheltenham. For example, the Cheltenham Swimming and WaterPolo Club is where Great Britain’s Olympic diving medallist Leon Taylor started his love of water. I helped Leon obtain his elite funding and then stayed up to watch TV when he won his Olympic medal. When he got back, I asked him what his best memory of those Games was, expecting him to say the medal ceremony. He replied, “Driving the buggy in the Olympic Village for Steve Redgrave, Britain’s greatest Olympian”. I had to point out to him that there is another one, the noble Baroness, Lady Grey-Thompson.
I have always thought that the Government should provide more support for sports clubs to employ, perhaps part-time, former professionals to help get more young people into a sports regime. Then we may end up with fewer couch potatoes developing heart disease in their early years and save a vast amount of money for our beloved NHS.
My Lords, it is a pleasure to speak in this debate. In doing so, I declare my interests as set out in the register. I thank my noble friend Lord Moynihan not just for securing this debate but for the insightful, interesting and in-depth Bill he published, and for securing the seminar earlier this week at Slaughter and May which was a day of incredibly interesting debate right across the sporting landscape. I also welcome my noble friend Lady Brady. Having grown up in Kidderminster, I watched her rise at Birmingham City. Quite frankly, what she achieved in the boardroom in a sport such as football is nothing short of remarkable. It would thus seem petty of me to remind her of Kidderminster Harriers’ cup visit to St Andrew’s when they knocked Birmingham City out of the FA Cup that year, which provoked probably one of the greatest lines on “Sports Report”: “There’ll be some celebrating down the A456 this evening”.
There is no separate world of sport. We love it; we feel it in our hearts. In some ways, that can often deceive us into thinking it is different, separate and magical. It is all those things, but it is no separate world. There are disasters, such as Hillsborough and Valley Parade, disgraceful ticket touting, match fixing and doping. On the other side of the coin, there are Murray’s Wimbledon, Botham’s Ashes and the sensational summer of sport in 2012. This is in our DNA. It is hard-wired into our culture and is part of who we are. It is in our psyche and in our lexicon. It is right across the park.
We are at our best in sport when we put athletes at the heart of everything we do, focusing on the participants, the people at the centre of what sport and leisure are all about. We saw an extraordinary journey from Atlanta in 1996, where we won one Olympic gold medal, to London in 2012 where we won 29 gold medals. That was due to many things, not least lottery funding, but it was also due to a dramatic transformation in the governance of many of the national governing bodies and sports councils of our nations. To see that happen in such a short space of time shows what is possible and demonstrates the journey which we are on. UK Sport was at the heart of distributing that lottery money and driving governance through those lottery awards alongside increased equality and inclusion in sports. In recent times, particularly in sports such as boxing and basketball, we have seen that you can have fantastic athletes who are great performers in the rink and on the court, but if you do not have the right governance, the right people and the right structures and systems around the board table, that can start to damage and massively negatively impact sporting performance.
At the Equality and Human Rights Commission, I am leading a £2 million piece of work on sport inclusion. We are going across football, rugby and cricket to cover the most ground in the shortest space of time, and are looking to drive up participation for girls and women and people from black and minority-ethnic backgrounds and to increase access to sporting stadia across the country, about which I know the noble Lord, Lord Faulkner, will say more later.
We launched with Premiership rugby in September. What a fantastic summer. The women won the Rugby World Cup for England—yet the number of women and girls in this country registered to play contact rugby is 0.00057%. The programme will train 480 teachers and coaches in and out of school and work with 1,000 young girls in training camps to get them into rugby, feel the joy of being part of a team sport and appreciate what it is to develop in this sporting community which we all love. In 18 months, we aim to have 7,000 more girls and young women playing rugby.
Similarly, Jason Robinson got the England captaincy and yet 3% of black or minority-ethnic people play rugby on a regular basis. Again, we are looking to increase coaching and to get 1,500 BME people into rugby up and down the country, working with the 12 premiership rugby clubs. They are in the heart of some of our most diverse cities—look at Leicester Tigers, for example. That is where we can make a difference and that goes to the heart of what sport is—the clubs that grew up in the communities. Football clubs, Premiership rugby clubs and county cricket clubs are part of our community, yet all too often they are now massively divorced and separated from it and focus on things other than that community. That is where the link needs to be made to connect the clubs and sport back into the diverse community that is Britain.
In conclusion, we need world-class performance and a world-class talent pathway but, crucially, we need access to inclusive sport for all, all of which should be underpinned and driven by gold medal standard governance.
My Lords, we thank the noble Lord, Lord Moynihan, for initiating this debate and applaud the noble Baroness, Lady Brady, for her spirited and uplifting maiden speech. I wonder whether she has once again set a record by introducing post-watershed language into her maiden contribution. I will echo and reinforce much of what the noble Lord, Lord Triesman, said earlier.
In England, as elsewhere, the governance of football must balance many competing objectives: at the grass roots, we need the right coaching and facilities and, in some parts of the country, we need modern playing surfaces to replace much overused pitches, which are ankle deep in mud by Sunday lunchtime. For the football spectator, we have the best showcase for global football talent in the whole world; namely, the Premier League, where, on its day, the bottom team can outplay the top. But the very best players in the world now play elsewhere. My club has just lost Suárez, who has followed Bale and Ronaldo to Spain. Perhaps it is no surprise, therefore, that England’s top clubs now struggle against Europe’s best. On the other hand, global talent in the premiership—again, this is much recognised—squeezes out some of the top tier of English players and adds to the woes of our national team, which has not won a trophy, or even come close, for nearly 50 years. England’s performance in Brazil was an embarrassment. We were in a qualifying group of four which contained two countries—Uruguay and Costa Rica—with populations of 3 million and 5 million respectively. In three games, we lost twice, gaining our single point in a scoreless draw. Even more worrying, we have had no meaningful national inquest since.
Football matters. Our clubs have deep roots in their communities, with family loyalties stretching back many generations. My grandfather lived his childhood 200 yards from Anfield football ground. Two of my three grandsons support Liverpool, and I am still working on the third. So, while the clubs need to run as businesses, they must also recognise that, as the noble Lord, Lord Moynihan, said, they are vital social and cultural pillars of the community, and must give their fans a voice. Unlike the noble Lord, I do not think the answer is to appoint fan representatives to football boards. However, clubs should—as some already do—institute effective arrangements for communicating with, and listening to, democratically appointed representatives of their fans. The FA is itself a representative body. It needs a council—football’s parliament—which gives voice to all the many diverse interests in the game. It does not do that now. But the FA also needs a board which sits above, and is independent of, all interests, a board which can balance the many national, sporting and social objectives we have for England’s most popular game.
The very careful recommendations of the noble Lord, Lord Burns, for the reform of the FA in 2005 were effectively ignored in their entirety. Subsequently, the FA has demonstrated its inability to reform itself. Good people, such as the noble Lord, Lord Triesman, and Ian Watmore, have been lost in the trenches in the attempt. The current chairman has made sensible proposals for promoting England’s talent, which have effectively been blocked. It is time now, I think, for football to be subject to independent regulatory scrutiny and oversight, like other sectors—for example, communications or financial services. It is time now for long-threatened government action.
My Lords, first, I congratulate the noble Baroness, Lady Brady, on her very successful maiden speech. She is now bringing her magic touch from West Ham United, so this is a golden moment for her and I hope she enjoys it. We will certainly enjoy her presence in this House.
I am delighted that my noble friend Lord Moynihan has secured this debate because we spend too little time talking about sport. When one thinks of the amount of time that the average person outside this House spends talking about politics—two minutes per week—and the amount of time that they spend talking about sport one realises that there is a certain difference in the balance between what people are talking about outside and what we are talking about inside. I am therefore delighted that we have this long-overdue opportunity.
I must say that I have no experience whatever of sport administration. It means that I have nothing to declare and have no experience of what goes on behind the scenes. Indeed, I am not good at sports, either. My golf handicap of 28 says it all. However, I am a lifelong, mad English sports fan. I was brought up, if I may say so, on royal jelly. I was born in Preston and therefore supported Preston North End when the incomparable Tom Finney was playing for that club. One way up the road in Blackpool were Stanley Matthews and Stanley Mortensen, and the other way, in Bolton, was Nat Lofthouse, the “Lion of Vienna”. If you add in Wilf Mannion from Middlesbrough, that was, more or less, the England forward line in those days—a long time ago, I hasten to say.
Subsequently, my parents moved from Preston and I began supporting Manchester United, which is still one point ahead of West Ham United in the Premier League. Then came the greatest moment in our football history, the World Cup of 1966, when we won under the managership of the incomparable Alf Ramsey. I always love that wonderful story about a local reporter trying to get a different angle on Alf’s victory. He called at his house the following day and asked, “Did Mrs Ramsey go to the match?”. Alf said, “No, she watched it on television at home”. “How did she greet you when you came back?”. Alf Ramsey looked at the reporter as if he was an absolute idiot and said, “Well, she shook my hand and said, ‘Well done, Alf’”. Those were the days. Since then, sadly, there has been little success, and I have to say, along with the noble Lord, Lord Birt, and others, that I blame fundamentally the members of the FA for that. They are the bosses; this is a results business and the results have been diabolical. As the noble Lord has just said, in Brazil, they were embarrassing. I do not blame the players. I think we have had the golden generations: the Scholes generation, the Beckham generation and so on. That was not made enough of. The speech of the noble Lord, Lord Triesman, said it all in relation to the FA and FIFA. Nothing further can be said about that because his speech encapsulated what many of us feel about this situation.
Money is the root of the problem. Undoubtedly, money has helped our sports in all sorts of ways—cycling, sailing, Olympic sports and so on—and it has helped our sports grounds, football grounds and so on. Money has been beneficial all around the park but the truth is that it has all gone too far. As has been said by one or two noble Lords, it has reached a point where corruption and greed are rampant. The well-being of our players is in danger. Look at Qatar; a footballer could be killed if a competition is held in the heat of summer in that part of the world. Look at the Ashes being played back to back—again for financial reasons. It was disastrous from a cricketing point of view. Look at Brad Barritt’s face when he finished four rugby internationals on the trot. That is not the way to run things. It is being done fundamentally for financial reasons.
We need to rein back on all this and I therefore hope that the Government will listen to what my noble friend Lord Moynihan said. Administrators should try to get a grip on this situation. I do not know the answer—as I have said, I am just a fan—but something has to be done for the good of all sport, the good of this country and the good of international sport.
My Lords, I am delighted to congratulate the noble Lord, Lord Moynihan, on securing this debate, which is turning out to be a highlight of the parliamentary calendar. I particularly congratulate the noble Baroness, Lady Brady, on her maiden speech. I shall say more about West Ham in a moment, if she does not mind. I should declare an interest as a vice-president of the Football Conference, and share with the House the knowledge that I shall be spending Sunday in Scunthorpe with Worcester City in its FA Cup tie. It is not a club that often gets mentioned in your Lordships’ Chamber, and this is a good opportunity to do so, because the team is enjoying an exceptional season.
Following the powerful speeches of my noble friend Lord Triesman, in particular, and the noble Lords, Lord Birt and Lord Horam, I wonder if I may put one or two practical questions to the Minister about the governance of football in England and the Government’s attitude towards the FA. Is he satisfied with the progress that the FA has made in implementing the changes that the Minister for Sport demanded in his response to the Culture, Media and Sport Select Committee report in July 2011? The Sports Minister, Hugh Robertson, said then that the FA had until 29 February 2012—he called it an “absolute deadline”—to make the necessary changes to tackle debt levels,
“to overhaul its board and bring in a new licensing system for clubs”.
May I ask the Minister what has happened to the parliamentary Bill which, according to the Guardian in May last year,
“would seek to enable the transformation of the FA into a modern governing body”,
and which, according to the report, parliamentary counsel had been instructed to prepare?
There is not time to go into all of football’s woes. However, I will just mention the level of debt. While money is a problem, the level of debt is an even greater one, which is growing year by year as clubs spend desperately to attempt to avoid relegation or to win promotion. They increasingly spend on players and managers. The spiral of debt is quite clearly out of control, as Deloitte reminds us year after year in its report on football finances. Responsible financial policies were adopted some years ago by the Football Conference, which means that all debts—not just football debts—have to be paid to enable clubs’ continued membership of the competition. The conference office regularly receives reports from Her Majesty’s Revenue & Customs on how up to date clubs are with their PAYE and VAT payments. Those that are seen to have fallen behind then face a series of sanctions. I suggest that that is a model that the Football Association and the major leagues should follow.
In my last two minutes I will speak about an issue that a number of noble Lords have referred to: the way that disabled supporters are treated at far too many of our football stadiums. Here I declare an unpaid interest as vice-president of Level Playing Field. In April, the then Minister for Disabled People wrote to all professional clubs and said that the provision of disabled access was “woefully inadequate”, with only three clubs in the Premier League—as we have heard, the richest league in the world—complying with the accessible stadia guidelines for the number of spaces for supporters in wheelchairs. Perhaps the worst example is the richest club of all, Manchester United, which offers only 120 wheelchair-user places in a 76,000-seat stadium. There are none in the family stand and disabled fans are denied the opportunity to buy season tickets. The accessible stadia guidelines say that there should be at least 282 spaces. I will just comment on the excellent evidence that the noble Baroness, Lady Brady, gave to the Select Committee on the Olympic legacy. The whole committee was very impressed by her commitment that when West Ham takes over the Olympic stadium it will comply fully with all the accessible stadia guidelines. We look forward to that.
Very briefly, I have three practical solutions for the Minister that would deal with the problem. Two of these can follow quite easily, thanks to the Government’s very welcome decision to reprieve the Sports Grounds Safety Authority. It was facing abolition but it has now been guaranteed a long-term life. This is the body that, in conjunction with Level Playing Field, should, in my view, be encouraged to conduct an audit of disabled access at all professional football grounds. Level Playing Field has been asked by the rugby league trust to do the same sort of job. This will provide the sort of information that will demonstrate the scale of the work that needs to be done.
The second thing that the Sports Grounds Safety Authority should do is to be instructed by Ministers not to grant licences to professional football club stadia that do not meet the accessible stadia guidelines. This has to be enshrined in legislation or regulation. The voluntary approach has not worked and compulsion is necessary. Thirdly, I would invite the Minister to take seriously the suggestion by his noble friend Lord Holmes of Richmond that the Equality and Human Rights Commission should address these issues. If we were to have one high-profile prosecution of a rich and famous club for failing to meet its requirements under the Act on equality grounds, that would focus minds very much indeed.
My Lords, I am grateful to my noble friend Lord Moynihan for initiating the debate. I would also like to welcome my noble friend Lady Brady, whose contribution showed the wealth of expertise she will bring to this House.
Like my noble friend Lord Horam, I have not held a senior position in the sporting world or participated at an international level. I speak only as a Norwich City season ticket holder, a candidate for MCC membership and a general sporting enthusiast. Fantastic memories of the London Olympics and Paralympics still burn brightly for me, but equally vivid and, unfortunately, less happy recent memories include last winter’s Ashes whitewash and Norwich City’s relegation from the Premiership. Such are the ups and downs of being a sports fan.
As has already been said, the British public’s passion for sport is well known, but it would be a grave mistake for sport governing bodies—be they at international, national or club level—to take for granted their loyalty and commitment. In particular, there is much to do to continue to encourage the next generation of fans. Sport is increasingly competing for young people’s free time with other popular alternatives. Many of these are online and are often much cheaper than regularly going to cricket or football matches, for instance. The latest BBC Price of Football survey has shown just how much ticket prices have risen in the past 12 months alone.
There are also signs that young people are less likely to watch live sport regularly. Last year, the Premier League found that the average age of a supporter was 41 and that only a fifth of those attending matches were aged between 18 and 24. There is little that is more exciting than watching live sport, and there are real issues to be tackled to ensure that future generations of fans are not lost.
In order to be able to respond effectively to those and the many other challenges they face, sports need to be governed properly. They need structures that are accountable, responsive and transparent. They need a culture that welcomes the expertise of all those who have a stake in the sport, and a vision for the future that recognises that their viability relies on the involvement and support of future generations.
Yet too many international sports bodies are having their competence and leadership in these areas called into question. As the noble Lord, Lord Moynihan, said, these are big businesses and, like our biggest companies, they need to be accountable. Along with those who pay for the pleasure of watching sport and those who participate, sponsors have a role in pressing for change. The tremendous work of LOCOG and of the British Olympic Association and British Paralympic Association during that incredible summer of 2012 is a testament to what effective leadership and good governance can achieve.
The vast majority of sports men and women in this country do not compete at the highest level, but this does not make their commitment to their sport any less. They, in turn, rely on the dedication of volunteers who mark pitches, collect subs and sit on committees, as the noble Baroness, Lady Grey-Thompson, highlighted. Many of the amateur football, rugby, cricket, tennis and athletics clubs that are a central part of so many Britons’ lives are extremely well run. We are entitled to expect a similar level of competence and integrity from the institutions that run sport at the elite level.
In conclusion, the sporting world faces significant challenges. Those in charge must ensure that their governance structures are fit for purpose, that they maintain the highest standards of ethics and integrity, and that they are clearly accountable for their actions. This is not rocket science—in fact, it is written in all the codes of conduct and good governance guides—but it has to be put into practice. If sports bodies fail to do this, it will not be government regulation that they need to be concerned about; rather, it will be the loss of thousands and thousands of would-be fans.
My Lords, I thank the noble Lord, Lord Moynihan, for introducing this debate and I congratulate the noble Baroness, Lady Brady, on her maiden speech. I am sure that she has been somewhat dismayed at football’s woes, as the noble Lord, Lord Faulkner, described them, which have been gone into by the noble Lords, Lord Triesman and Lord Birt, and the noble Baroness, Lady Evans. It is a game that is now full of money, foreign players, and middle-aged spectators with an upper income.
I turn with relief to Britain’s premier sport—rowing. I declare an interest as co-chair of the All-Party Parliamentary Rowing Group. I remember rowing in an eight over the Atlanta Olympic course at Lake Lanier in Georgia in the summer of 1997. It was a beautiful day. I was reflecting on the fact that in the previous year Team GB had been 36th in the Olympic medals table, with medallists in just some 16 events. The only gold medals were for Matthew Pinsent and Steve Redgrave in the coxless pair. Otherwise in rowing, the men’s coxless four with the Searle brothers had won bronze. There was a sprinkling of silver and bronze medals in athletics, including for Denise Lewis in the women’s heptathlon and for the men’s 4x400 metres relay team. Ben Ainslie had a silver in sailing and Chris Boardman won bronze. The team’s performance was not great overall.
In the 2012 Olympics, Team GB was third in the medals table, with 29 gold medals. Indeed, 185 medals were achieved across 30 sports in the Olympics and Paralympics. UK Sport is now carrying out a strategic policy review. Should its current investment strategy focus on medal success or should it go beyond Olympic and Paralympic sports and be broadened to consider other UK-level sports or disciplines? I believe that the present approach should be maintained. Olympic medal success is a prime inspiration to young people that encourages them to participate in sport, and from that point on to lead healthy and active lives.
Let us look at British rowing: the GB rowing team sustained its position through the last two Olympic Games in Beijing and in London as a leading Olympic rowing nation. In London’s Olympic and Paralympic Games there were 33 rowing medallists. The men’s coxless won four golds. Six women won gold in three events: the coxless pair, the double sculls and the lightweight pair. It was inspirational. The creation and development of rowing talent’s identification programme, Start, has been so successful that five of the gold medallists have come through it. The result is that British rowing membership increased by 12.2% over six months between June and December 2012, and broke the 30,000 mark. Half of the new members were under 18 and nearly half of the new membership were women.
I believe that one reason for the success is the willingness of our Olympic rowing champions to be personally involved in encouraging clubs and individuals throughout the country. I was delighted to meet Katherine Grainger at the recent Invictus Games for injured servicemen. Her performance in winning gold in London, after a succession of silvers in Sydney, Athens and Beijing, is so memorable. She is a board member of International Inspiration, the charity chaired by the noble Lord, Lord Coe, which promotes access to sport, play and physical exercise for low and middle income families with children around the world. Indeed, I do not suppose anybody else in your Lordships’ House has had the privilege, as I have, of being coached by a gold-medal winner in Beijing and London; namely, Tom James of the coxless four. We may have been “old farts” but he was prepared to give us some time. Perhaps the fact that his father was rowing with us was another inspiration.
These are just two of many whose encouragement to the grassroots of rowing should be fully recognised. It is, indeed, at the grassroots that the Government have a role to play. They should be involved directly in encouraging participation. The noble Baroness, Lady Grey-Thompson, referred to the importance of volunteers. A real restriction to participation and growth is the availability of coaching and the perception that increased bureaucracy discourages volunteers from coming forward. When my son was 17, I started an under-18 rugby union team in my home club and coached it with some success. I do not think that I would do it now because of the bureaucracy involved. The Government could also address a much more supportive approach with volunteers in running sports bodies and giving encouragement to them. I think of the North Wales Crusaders in Wrexham, for example—a rugby league team which weekly provides players to local schools to encourage pupils to participate and learn ball-handling skills, which will enable and encourage them to participate in other sports. Those are the reasons why I wanted to bring to your Lordships’ attention British rowing as Britain’s premier sport.
My Lords, It is a sportsman’s pleasure to be involved in this debate. Because I am sitting next to him, and he will give me a good kicking if I do not, I congratulate the noble Lord, Lord Moynihan, on a very well constructed speech. We heard a brilliant speech from the noble Baroness, Lady Brady. I wish my maiden had been as good—indeed, my speech now may be nothing like as good but I shall try my best.
I say to the noble Baroness, Lady Heyhoe Flint, that if I were her I would go the ladies now and take a break because what I am about to say will not be to her pleasure. It is amazing how we can be on the same Benches but disagree with one another. Cricket is a sport that is close to my heart. I declare my interests as a co-owner of Wisden Cricketer, Cricket Archive and Test Match Extra. We also arrange the cricketing National Village Cup, which incidentally gets no sponsorship from the ECB. It is a magnificent occasion which has its final at Lord’s in September. Some 130 villages participated in it this year.
For those noble Lords who would like to make a guess, what do they think is the debt in county cricket at the moment? I asked someone on the way in to the debate, and he said, “£6 million”. That is so far from the truth; there is £246 million of debt in county cricket. Warwickshire County Cricket Club has been lent £25 million by its county council and it cannot afford even to pay the interest on it; nor can Yorkshire County Cricket Club, which borrowed £20 million from its chairman, who is tipped to be the next chairman of the ECB. Some 10 out of 18 counties cannot afford to pay the interest on their debts, and the figures are horrendous. We now have 11 grounds vying for Tests and one day internationals, two of which are always destined for Lord’s and one of which goes to the Oval. That leaves four Tests in the coming year and 10 or 11 one-day internationals for 11 grounds—which I gather now include Gloucester.
As we have heard from my noble friend, cricket is run by the ECB. It sucks in the television funds and has had an average annual income of £104 million for the past 10 years. Its costs have gone up from £12 million to £22 million. The board dangles the carrot of money in front of cricket. The observer would ask where that money goes. The observer would say that it goes to the Test team, which we applaud because it was underfunded, but has now probably reached the point of overfunding at £28 million a year. It has gone into women’s cricket and to a very successful women’s team under the leadership of my noble friend, which we applaud—I dare not. Money has also gone into grassroots cricket. A look at a school report of the ECB would show that we have lost 70,000 players in grassroots cricket over the past few years. We have won only three of the last 12 Tests, and by the time we return from South Africa, the England team will have played 15 Tests and 40 to 50 one-day matches, which is effectively 120 days of cricket in 360 days. This is utterly crazy and unsustainable, and we know it.
So, also, is that monstrous debt. It cannot be carried through cricket and its activities generally. Of course, cricket is now all about money, and that is why we have such an overload. Is this the ECB adopting an agenda for its own institution or is it an adopting agenda for the game of cricket? The answer, I am sure noble Lords would agree, is a resolute no. Are the wheels coming off cricket? The answer is predictably yes. Is the ECB acting as the custodian and trustee of our national game? I leave that for noble Lords to decide.
It is not just cricket. We have heard from other noble Lords that tennis and other sports are also in this position. Why is the consumer not protected by a body in the way we have Ofgem, Ofwat and so on? I would ask the Government to consider putting in place a form of consumer protection for sport. That does not mean that fans should be running counties, teams and so on, but it does mean that their priorities must be considered and taken into account by an official, independent body. I invite the Government to consider this.
My Lords, this has been a terrific debate to the best standards that we normally have in your Lordships’ House. All sorts of expertise and experience have been on display, and as a result I think that we will be able to draw together some thoughts that the Government might wish to respond to. All who have spoken appear to agree that there needs to be more focus on policy in this area. I also thank the noble Baroness, Lady Brady, for her maiden speech. She has been described as the “First Lady of Football”, but obviously she has many more strings to her bow, as she mentioned in her speech. She made the very good point that sport’s unique attribute is its ability to break down barriers and engage everyone in a common pursuit, but rather than leave it at that, she was able to exemplify it in her work at West Ham and Birmingham City before that. I think that we are all the better for hearing those figures because they are very inspirational.
We have had blasts from my noble friend Lord Triesman and others—most recently the noble Lord, Lord Marland—about the existing arrangements. There have been common themes throughout the debate which fit very closely to what I think were the intentions of the noble Lord, Lord Moynihan, in bringing forward this discussion. As he said, he is trying not only to publicise his Private Member’s Bill but to influence the manifesto process. There is certainly a great deal of information here that could be used by people who have that awful task to come.
In fact, I had a mental vision of where that Bill came from. I wondered whether, when the noble Lord, Lord Moynihan, was Minister for Sport, or perhaps in his later life, he used to wander around the world with a little black book writing down “Good ideas that I might put forward in a Bill sometime”. It is about not just sport—or even sport and education or sport and health—but other issues relating to more general comments about the state of the world today. It left in my mind a suggestion that in some more benign future era we might find time in your Lordships’ House for people who have the “Bill of Dreams” up their sleeve. They might be given the opportunity—perhaps in a resignation speech—to say, “These are the things I would have brought forward to legislate had I been able to do so”.
Enough of that—the issues that I think are at the heart of this debate are based around the question posed by the noble Lord, Lord Moynihan, about the autonomy of our sporting endeavours. Now that sport is so much a part of our national fabric, is there now a role for the Government, not just because of direct financing or the impact on policy, to act as a regulator or legislator of last resort behind the activities of sport? It is true that the Government directly fund sport. It is true that policies on sport and recreation feature strongly in government policies. There has been a huge change in the way that sport is now funded and operated. Commercialisation has taken over. The relationship between sport, policy and the law has to be considered. We need to think about serious and large-scale criminality both on and off the field and in online and face-to-face betting. We really need to think again about the way in which we fund grassroots sport and increase that funding. In the Autumn Statement the Chancellor has suggested a novel but very interesting step forward in this area in relation to thinking about trying to use the intellectual property that resides within sport to provide a stream of finance that might be put forward. I hope that the Minister will pick up on that, because it is a significant change of track compared to where we were in the Gambling Bill and one that I think has many lessons for the future.
As many noble Lords have said, we need to think about the years of disenfranchisement of the loyal supporters of our major clubs and about ways in which they can make their voices heard and their influences felt. As was said by the noble Lord in introducing this topic, we need an athletes’ charter which ensures that the voices of our sports men and women are heard and that the many concerns they have about how their sports are organised and run are not just heard but acted upon by the governing bodies of the sports. The sports governing bodies must be fit for purpose and transparent and they must have standards that are more equivalent to the FTSE 100 rather than some sort of amateur “blazer brigade”, as I think the noble Lord, Lord Addington, put it—we understand what he meant by that. Within all that, there are questions about equality that were touched on by a number of speakers which need to come forward.
With that range of issues in play, which I think reflects many of the comments made, I ask the Minister to think about some of the specific questions he was asked. I mention football first because it rather dominated our discussion, perhaps to the exclusion of some other issues and other voices we might have wished to hear. The speech of my noble friend Lord Triesman was very specific, and the point was picked up by my noble friend Lord Faulkner. There are commitments in play from the Government about how to deal with the FA/Premier League situation. There were promises made and draft legislation referred to—where are we on this?
On the wider question of reform, it would be possible within existing laws, I think, to make a series of commitments about reforming sports governance, not least because so many sports now receive the majority of their funding through the Government, either directly or through the lottery. Standards, transparency, professionalism, equality, access and inclusion are all issues that need to be picked up. The Government have those powers—what are they doing about them?
We are all saying, with a single voice across all parts of the House, that there are real problems about the international associations, their lack of accountability and their inability to pick up on standards that would be commonplace in any other activity. What are the Government doing in relation to FIFA, for example, or to the other questions that have been raised? What way could the Government find of bringing together those interests within Government that bear on sport? Education and health were mentioned, along with sport in a separate department. Sport is not in a strong position in these, because it is very often a minor player, but surely there must be something more than just an informal arrangement. Does the Minister have anything to say to give us some solace on that?
I was very struck by the number of people who picked up on the question of criminality in sport, to which I have already referred, but there seem to be four dimensions here, of which we are tackling only one. Doping is a major issue, where we are very much not in control of our own destiny, but we could do a lot more. There is no law on match-fixing: why is that? How can we possibly have a situation where it is impossible to bring any direct criminal charge on somebody who deliberately fixes a match, whatever sport we are talking about? That, of course, plays into betting. There are rules in betting about that, but those rules have such weak penalties that the last successful criminal activity in this area actually employed the Fraud Act—hardly a way of trying to root out people who are betting illegally on the outcome of particular overs in a cricket match.
Grassroots funding, as I mentioned, is a real problem. Yes, there are plenty of fans and they can be accessed, but they are not circulating as well as they could do. If we want to have proper access to sport at all levels and for all abilities—and have elite sport within this—we really need to unpick this. What are the Government doing to resolve that?
Finally, I want to make two points about equality. First, it seems extraordinary to me that we are still in a situation where not everybody in our community can access or have sight lines for a sport that they can pay for. Access for those who need special treatment still seems to be lacking. We should also reflect on the point that, sometimes, it is simply the language that we use. I am not picking up on any particular individual who has spoken here today but, sometimes, by concentrating on the football analogy and the football metaphor, we sometimes exclude more than we gain.
My Lords, I, too, congratulate my noble friend on securing this debate. His great interest in the well-being of sport, both at home and internationally, is demonstrated in his wide-reaching Bill. It is an exceptional catalyst to debate the sporting landscape and how we might enhance it. I am particularly conscious of the immense experience your Lordships bring to this debate. Unfortunately, it will not be possible to do justice to all the issues raised in my noble friend’s Bill and by your Lordships, given the time. I shall, of course, respond in writing to any outstanding points. I also congratulate my noble friend Lady Brady on her truly exceptional maiden speech. She brings to this House a range of experience, but today I particularly welcome her as a robust champion of sport.
This Government are committed to promoting good governance. The DCMS works closely with our public sector partners such as UK Sport and Sport England to ensure that the highest standards of governance are operated in the various national governing bodies for sport. The Government decided in 2012 to retain UK Sport and Sport England as two separate entities, but with a shared reform agenda, closer working and a move towards collocation, which happened successfully earlier this year. We do not claim that the system cannot be improved, and a joint triennial review of both bodies was announced on 21 November. Its conclusions will be reported next summer.
Sport England and UK Sport have robust systems in place to oversee the use of public money invested in the national governing bodies. UK Sport’s governance principles ensure that it will invest only in sports that demonstrate the required standards of leadership, governance, financial management and administration. Sport England’s whole sport plans are an example of obligations already placed on national governing bodies as a condition for public funding. National governing bodies must demonstrate strategic planning, conduct skills audits of their leadership and appoint at least 25% independent board members. They should also target a minimum of 25% women on their boards by 2017. Indeed, the noble Baroness, Lady Grey-Thompson, raised this important point; we are working on this with governing bodies. National governing bodies must produce for Sport England solid evidence that links this good governance to their sport; a governance, finance and control framework; reviews of performance against award agreements; participation targets; a payment-by-results process; and proactive action planning. Sport England’s Active People survey measures the number of adults taking part in sport across the UK.
Boards are undoubtedly becoming more diverse. Sports are becoming better governed and better able to understand their fans and the interests of their potential participants. But there is very much more to do.
Great Britain’s haul of 65 Olympic and 120 Paralympic medals at London 2012 is a proud achievement, with 30 sports winning Olympic medals and putting us third in the Olympic medal table. We were third also in the Paralympics in the most competitive era of Paralympian sport. But we must not rest on these laurels.
Increased participation remains a major principle of Exchequer funding. My noble friend Lord Addington made the case for participation and the enjoyment to be derived from it. The noble Baroness, Lady Grey-Thompson, raised the essential matter of volunteers and described what an example they are.
Basketball is an increasingly popular sport, with a 7% increase in men and women’s participation in the last year alone. My noble friend Lady Heyhoe Flint mentioned the increase in number of girls’ and women’s clubs in cricket and the enormous contribution that sport generally makes to the national economy. I am very mindful of what my noble friend Lord Marland said about the serious situation for county cricket clubs and I am sure that that will be on the agenda when the Minister for Sport meets the chairman of the ECB shortly. My noble friend Lord Thomas of Gresford promoted the interests of rowing so robustly, and the importance of how elite and grass roots are connected throughout the process. I want also to mention cycling. A report published today states that the Tour de France in the UK boosted the economy by £150 million, of which £102 million was in Yorkshire. I think that so many of these successes have been inspired by the exploits of our Olympic and Paralympic athletes. Netball participation is increasing; boxing participation is increasing.
The noble Baroness, Lady Grey-Thompson, asked how disabled people can be encouraged to be active. Sport England has made this a key part of its strategy, with £171 million being invested to increase activity, and 42 national governing bodies have specific targets for increasing the number of disabled people playing sports.
My noble friend Lord Moynihan rightly drew attention to the importance of cross-government working, as did the noble Lord, Lord Stevenson. It was also important that my noble friend Lord Jones of Cheltenham spoke about health and sport. The Department of Health is embracing the value that sport adds to a healthy lifestyle, as indicated by its Change4Life programme, and the DfE recognises that education and sport must go hand in hand and the key role that sport plays in the development of young children.
I am particularly mindful of what the noble Lord, Lord Pendry, and my noble friend Lord Moynihan said about playing fields. The Department for Culture, Media and Sport and the Department for Work and Pensions are jointly considering access to sports venues for disabled people. The Secretary of State for Culture, Media and Sport recently approved a £1.9 million programme to be undertaken by the Equality and Human Rights Commission to increase access. I am delighted that my noble friend Lord Holmes of Richmond is closely involved with this. A joint DCMS and Department for Work and Pensions survey will be launched this month to ask disabled sports fans about their experience visiting stadia, and the evidence from the survey will help to inform future priorities and analyse the performance of professional Football League clubs.
My noble friend Lord Holmes of Richmond spoke about inclusion. The Minister for Sport has pledged to raise inclusion and accessibility for spectators with disabilities with relevant organisations in the course of her regular meetings. The noble Lord, Lord Faulkner, spoke powerfully about accessibility, and I know that the Minister of Sport is looking forward to meeting the noble Lord tomorrow to discuss those matters.
The Sports Grounds Safety Authority is also working with the disability access charity, Level Playing Field, on a proposed revision of the accessible stadia guidance to ensure that it is relevant, up to date and shows best practice. The Sports Grounds Safety Authority maintains spectator safety at football matches. We have explored whether there is a legal basis for including disabled access into its regime, but unfortunately legal advice confirms that that is not part of its statutory remit.
It is probably best if I write to the noble Lord, Lord Faulkner, about some of the points he raised, but I assure him that all the points about equality and access are being considered very strongly. I know that we all agree that football clubs must address that much more rigorously than they have to date. I am very mindful of our exchanges in this House about many football clubs which ought to be doing better.
Football engenders great loyalties and rivalries, as the noble Lord, Lord Birt, and my noble friend Lord Horam rightly emphasised. Since 2010, this Government have sought to work closely with football authorities on a wide range of governance issues. As a result of that partnership, there has been a toughening of ownership tests, improved financial transparency and stronger rules to ensure that clubs are sustainably run.
The Minister for Sport regularly meets the football authorities and continues to press for improvements in governance. Although we welcome progress, I say to the noble Lord, Lord Faulkner, and your Lordships’ House that the Government expect more to be done.
It is immensely valuable that my noble friend Lady Brady brings great experience in the successful running of top-level football clubs, and I would very much welcome her insights in this area. The Culture, Media and Sport Select Committee has brought forward a wide range of recommendations for the sport, including that the Government should establish an expert group to look at barriers to supporter ownership. We have now established such an expert group to explore supporter ownership and engagement, in partnership with leading fan organisations and the football authorities. It is absolutely right that my noble friend Lady Evans of Bowes Park spoke about the fans—a point that the noble Lord, Lord Stevenson, also made. They should be better respected in all the arrangements of football clubs.
We must also not be complacent in confronting the challenges that sport faces. The noble Lord, Lord Pendry, highlighted match fixing and other corrupt practices. The noble Lord, Lord Stevenson, asked what the Government were doing internationally. Clearly sports and Governments are acting because they identify a need for change. Countries across Europe are addressing issues such as good governance in sport and match fixing. The UK supports the EU principles of good governance in sport. The Council of Europe, the advisory organisation promoting co-operation between European countries in areas of legal standards, has created a legally binding convention on the manipulation of sports competition.
The Olympic movement recognises the need for good governance. Following the 2002 Winter Olympics, the IOC addressed fundamental shortcomings, thereby becoming more transparent, open and independent.
Quite a bit has been said about FIFA. The UK has set a standard on what it expects in sporting governance, and international bodies should not be treated differently. The DCMS Secretary of State said exactly this in his recent letter to the FIFA president, Mr Blatter. The noble Lord, Lord Triesman, spoke about FIFA and I think that we would all agree that one of the best ways for FIFA to show its commitment to transparency and accountability would be to release the report compiled by Michael Garcia. That would be at least a first step in what FIFA should do if it is to have any credibility at all on this matter, or indeed more generally.
The UK’s outstanding sporting tradition, and the significance of our place in the world of sport, are borne out by the number of major events secured since the 2012 Games. Events next year range from the Rugby World Cup, the World Artistic Gymnastics Championships in Glasgow and the EuroHockey Championships to the Canoe Slalom World Championships. In 2016 there will be the Track Cycling World Championships and European Swimming Championships; in 2017, the World Championships in Athletics. There will be many more at the Olympic stadium and across London, and across the United Kingdom.
The importance of sport in our national life is undeniable. Be it in greater participation or by hosting major events across the country, we must seek high standards of governance at home and abroad. Improvements can and must be made. In hearing from your Lordships who have such experience, this debate has been of enormous assistance and I shall ensure that the Minister for Sport and many other colleagues across departments hear of it in full.
We all agree that there is very much more to do. The Government clearly have a key role to fulfil in all this but I believe that, today and beyond, there can be no doubt that we are all in my noble friend Lord Moynihan’s debt for providing this opportunity to debate the many challenges which face sport at home and abroad, given the enormous contributions that sport provides across the world for young people and for people of all ages and abilities. We must work together to ensure that we can find the best way of meeting the challenges and opportunities for the benefit of all.
House of Lords: Procedures and Practices
Question for Short Debate
My Lords, I am particularly grateful for the opportunity to raise this issue today. Many of my colleagues, on all sides, have come up to me and said that they are glad that this is being debated—mind you, most of them have said that they cannot be here because they have a long-standing commitment. That is why I am particularly grateful to those who have stayed on a Thursday, more grateful to those who are going to speak and even more grateful that from our Front Bench, we have the rare treat of our Chief Whip making what is effectively his maiden speech in this Parliament. I know that we are all looking forward to it.
This is a strange place. It is the second largest legislative assembly in the world, after the National People’s Congress of China. I am often asked how many Members there are in the House of Lords. It is very difficult to reply, not just because of the coalition-packing exercise under way at the moment but because of the Grim Reaper. That is a strange thing because we do not have a specified number. It is also the only debating legislative body that I know of without a chair, a moderator or a president to control proceedings. I am going to return to this, so if I am wrong then there is time for colleagues to correct me. This Chamber needs major reform, but that is for another day. I hope that the report of the Labour group, which was produced under the chairmanship of my noble friend Lady Taylor and Lord Grenfell, will form the essence of that discussion and those debates, and I hope that the suggestions will be taken forward.
Meanwhile, though, we can try to improve our proceedings and practices as far as we can, and I think we should. My top criterion is: how can we better exercise our role of scrutinising the Government? How can we make that scrutiny more effective? I shall look first at Questions. This week saw some classic cases of how bad it is with so-called self-regulation. First, on Tuesday, we saw the noble Lord, Lord Ashdown, shouting down the noble Lord, Lord Trefgarne—the first time that I have ever felt sympathy for the noble Lord, Lord Trefgarne. Later on, my noble friend Lady Liddell, a former Energy Minister, was unable to get in on a Question on fracking because of the men who were pushing in before her—that was clearly the case. The noble Lord, Lord Selkirk, when he was the last man standing on a UQ, was squeezed out because the clock hit 10 minutes and the Clerk got up straight away, like some automaton, to stop the questioning taking place. Yesterday my noble friend Lady Farrington was delayed in asking a question because of a confrontation with Tory Peers, although it was Labour’s turn, and when the clock hit 30 minutes it was with almost undisguised glee that the noble Baroness the Leader of the House, who is replying to this debate, got up and called time. There was plenty of time, but because of the rules of the House we had to stop.
An impartial observer would ask: “Why is it the government Leader, or indeed the Whip, who is seen as the person who should stop scrutiny of the Government by calling time, or indeed decide between competing claims for speaking?”. The unseemly clamour at Question Time, with effectively the captain of one side acting as the referee, would end if we did what was recommended by my noble friend Lord Grocott in his report, and by others on a number of occasions: give the Lord Speaker and the Deputy Chairmen acting on her behalf their proper role as a moderator of our affairs. I hope that the noble Baroness the Leader of the House will look at this point again and answer it.
Also on Question Time, why is the original tabler of the Question called by the Clerk? Surely that would be more appropriately done by the Lord Speaker. And what is the rationale for limiting the total number of Written Questions by Members and the total number of Oral Questions on the Order Paper? Why is there an upper limit? If we are here to scrutinise the Government, why should our ability to do so be so constrained? There is no logic to this, or at least I have never heard any. Perhaps the Leader will tell us in her reply.
Why do we have no specified opportunity to raise points of order or procedure? True, the opposition Leader, or indeed anyone with a brass neck, can get up before main business—but that opportunity should not be left to the leadership and loudmouths like me; it should be codified and specified so that anyone can raise these issues.
Then there is the issue of Urgent Questions and Statements. Why do we have so few allowed, compared with the other place? We do not seem to have many opportunities here. Why are there such tight limits of 10 and 20 minutes for questions from the Back Benches on these debates? Sometimes we have finished at 7 pm, yet we have been squeezed into 10 minutes on an Urgent Question. It is completely artificial. Surely there should be more flexibility in both kinds of debate, taking into account the importance of the matter and the number of Members seeking to ask questions. If it is something of national importance and a lot of people want to ask questions, while it is true that there is a little flexibility, surely there should be more.
On conventions, we can refer to that great thick tome, the Companion to the Standing Orders. I have noted that it is apparently okay for the Government to ignore important conventions such as a the normal rising time for the House; do noble Lords remember when the noble Lord, Lord Strathclyde, who is about to follow me, allowed the House to go on and on to get his business through? He was able, as his successor may be, to breach convention. On time between stages of Bills, a great fuss is made when minor conventions are breached by others.
Some of the conventions need looking at again. Reading is not always bad. When someone has to read it is quite outrageous and rude to have colleagues muttering, “Reading, reading”. Of course we should discourage reading—where possible, noble Lords should give their speeches without reading, referring only to notes. However, why are we so adamant about that? It should not be an issue for reprimand if titles are not referred to exactly correctly: “the noble and gallant”, “the noble and learned”, “the noble and brass-necked”—noble Lords can think of an appropriate title for me. Why do we get so uptight about that?
I agree that we should not move about the House when Motions are taken, but surely if the Lord Speaker or the Chairman of Committees had power, if would be better for her or him to deal with that rather than to have to rely on the noble Lord, Lord Geddes, or the noble Countess, Lady Mar, however good they are at that. I venture to suggest that we encourage rather than frown on interventions in speeches—I have not had any yet, but there you are—so that we can have debates rather than a series of speeches. This is a debating Chamber, not a Chamber of a series of speeches.
That brings me to the arrangement of business. Short notice may be okay for London-based Members. However, if business for a Monday is to be tabled on a Thursday or Friday, as the noble Lord, Lord Strathclyde, did on occasions, how can those of us who live in the rest of the United Kingdom find out about it, let alone get here on time? I only live in Edinburgh; think about those who come from Orkney, the Western Isles, and other places. In addition, of course, necessary and understandable discussions take place in the usual channels about the timetabling of business. However, a little more transparency would help the rest of us, would it not? The idea of a Back-Bench business committee could be looked at again.
On committees, I fail to understand why we have come to a decision on shortening the rotation of membership of committees. Every Member I have spoken to disagrees with that. Some secret power seems to be at work—it is the usual channels again. The result in one case is that a European Union sub-committee is losing all but one of its members, including the chairman. What good is that for scrutiny of the legislation that comes from Europe, of which this House is notably and rightly proud? We should look at that again. If Select Committees have rotation of members, why not domestic committees? Why are they given special protection? Again, some secret power must be at work there.
Finally, as we approach the Christmas Recess, I renew my plea to the Government—for it is they who decide—to consider realigning the sittings of both Houses, the Commons and the Lords. Increasingly, we meet on different dates, which causes havoc with Joint Committees, all-party groups and political groups, quite apart from all the joint services of Parliament. I hope that the Leader will look at this, and at the other points I have raised, so that we can at least try to bring the proceedings and practices of this House into the 20th century, if not the 21st.
My Lords, it is always entertaining to follow the noble Lord, Lord Foulkes of Cumnock, and today was no exception. For most of the 10 minutes I was waiting for him to get to the point. The Question on the Order Paper asks whether the Leader of the House, or the Government, have any plans to re-examine the procedures and practices governing the arrangement of business in the House of Lords. It is not really up to the Government to do so. Ultimately, it is up to the House to decide whether those things should be done.
I take up two quick issues with the noble Lord. He made much of complaining of the rules that we have, such as the 30 minutes that we have for Starred Questions, but these decisions are not made by the Government or by the Opposition but are made and agreed by the House itself. From time to time, those issues are debated and discussed in full in the Procedure Committee and again on the Floor of the House.
One of my admonitions was on interventions—and I am grateful to the noble Lord for allowing me this intervention. I have had inside information from the time when the noble Lord was Leader of the House. I have heard stories that recommendations were agreed before he arrived and that his arrival resulted in a complete change, not because of his strength of argument but maybe because of fear. That does not include just proceedings—he will know that that includes attendance allowances as well.
My Lords, the noble Lord is being unusually flattering of my reputation.
The noble Lord referred to aligning the sittings of this House with those of the House of Commons. Why does the noble Lord not go to his colleagues in the House of Commons and tell them that they should align their sittings with us? That would be a distinct improvement. But there is no need for us to sit at exactly the same time as the House of Commons. Sometimes the greatest possible national recognition of the House of Lords is when the House of Commons is not sitting—and you have only to look at some recent examples, such as when the noble and learned Lord, Lord Falconer, had his debate on assisted dying, to see that it was the House of Lords that ran the headlines. So that is a useful thing.
Of course, it is useful from time to time to have debates in this House on procedure. However, the noble Lord seems completely to misunderstand the role of the powerful and important Procedure Committee and how it works in practice. I am almost ashamed to admit it, but I was a member of the Procedure Committee from 1994 until 2013. For all those years I went along to every meeting. I probably sat longer in that committee than any person alive today. There was a movable feast of people who came and went, including Front-Benchers, Back-Benchers and Cross-Benchers alike. The point is that it is open to any Peer to write to the Chairman of Committees, the Leader of the House or the Clerk for issues to be raised in the Procedure Committee—and they are.
I am entirely in favour of progress and improving how we work. The fact that we do get change demonstrates how effective it is. When the Procedure Committee comes to a decision, it has to be endorsed by the House. There have been many occasions when amendments have been proposed and sometimes even agreed when decisions have had to be taken back by the Chairman of Committees. That is part of the general debate that we have. The noble Lord does not like some of the rules and regulations that we have, but he has every right to propose a change.
I am not in favour of having yet another committee. Already in this Parliament we have had a Leader’s Group, which made some substantial changes—and that has happened over the course of the past few years. The noble Lord said that we had plenty of time, yet it was the Labour Party, when it was in Government, that put the automatic cut-off at 10 o’clock at night. When I first joined this House, Back-Benchers were able to go on and on and on into the night and into the small hours.
I do not think that the noble Lord, Lord Strathclyde, can have it both ways. He has accurately explained the fact that, ultimately, the control of procedure is with the House as a whole. Now he is saying that it is the Labour Party, which has never had more than 30% of the votes here, that has been imposing draconian rules. Which is it?
That was cleverly done, but what I meant was that it was a proposal by the then Labour Government that carried the day. I go back to the point made by the noble Lord, Lord Foulkes. It was a decision of the House to limit the amount of time that we had available, and it is an experiment that worked well and it has now become permanent. Another was the introduction of Grand Committees. We have far more hours now to spend debating issues—and, unusually, compared with virtually any other legislative Assembly, every Member of this House has an absolute right to put any amendment down to any piece of legislation and must be replied to by a Member of the Government. That is an enormous strength, which is not shared by our colleagues next door.
What is the House of Lords for? We are here to revise, to scrutinise, to debate and to investigate. Actually, I think we do that job remarkably well. We should not put too much pressure on the role of the Government. Every aspect of the work that we do in this House is, ultimately, agreed through the usual channels. That is not always an easy relationship to manage, but in the end it is about the language of priorities between Government and Opposition.
As I have said before, I believe that it would be a great mistake to give new powers to a Speaker of the House of Lords. It would, first of all, be an admission that we were unable to rule ourselves—and you have only to look at the House of Commons to see what happens when you have a Speaker. If I may say so, with due respect to the noble Lord’s eminent career, it is very often former Members of the House of Commons who believe that this Chamber is a House of Commons 20 years older. It is not; it is an entirely different Chamber. Our procedures work extremely effectively and can be changed through the Procedure Committee.
My Lords, in opening my remarks I need to go back to the Parliament Act 1911, and the subsequent general acceptance by a hereditary House that the Commons were entitled to their business—an arrangement that held right up to the exclusion, 15 years ago, of most of the hereditaries. Of course I accept that during the period there were a disproportionate number of Labour Government defeats. Nevertheless, the arrangement was generally sustained.
But the hereditary House was archaic. It had to go. It has been replaced, over 15 years, by a House that is far more politicised and assertive. It is that which brings me to the issue of procedural reform. The introduction of a large group of former Labour and Conservative MPs, along with a substantial contingent of former Liberal Democrat parliamentary candidates, has profoundly changed the House and the way it works.
When I came here in 2001, even then I was conscious of a different culture, and I made a conscious effort to depoliticise my speeches. That, for me, was a big change after 22 years of fierce political debate in the Commons. I took a hard line on secondary legislation, refusing to vote on fatal Motions, and refused to insist more than once on Lords amendments. But this is now all being challenged. With its vast new intake of the more politically engaged, the House of Lords is changing.
That brings me to what might happen next year, after the general election, and the implications for procedure. Historically, polling has helped in the prediction of election results, but next year’s poll is impossible to predict. The political landscape is far more volatile. Both the main parties could see a reduction in votes yet an increase in seats. Both the Greens and UKIP could win a substantial number of votes yet, in the absence of proportional representation, no seats. What happens if the Liberal Democrats, outside their incumbency seats, find that their national vote completely collapses, and perhaps even turns out to be lower than the UKIP vote? What happens if, on a collapsed national vote, the Liberal Democrat group in the Commons is reduced to a rump? What happens if both the main parties lose seats to UKIP? The implications for the House of Lords and its proportionality are immense.
Let us take a step back to the last general election, and the coalition agreement. The programme for government stated:
“Lords appointments will be made with the objective of creating a second chamber that is reflective of the share of the vote secured by the political parties in the last general election”.
On the combined coalition Benches, that objective has been realised. But the May 2015 proportions are likely to be very different. The result may well be a disproportionate House, lacking all credibility. For example, after next May the 106 Liberal Democrats, who currently comprise nearly 20% of the working political appointees to the House, may have a much reduced mandate, while their numbers are increasing in the Dissolution Honours List.
How will we be able to justify a House of unelected Peers who may well in no way reflect either the proportions of votes cast in the country or even, on a lesser measure, the proportion of seats won in the House of Commons? How will we be able to justify their right to amend legislation and on occasion to drive legislation into the process of horse-trading during wash-up, which so often can lead to unreasonable compromise? Horse-trading over amendments with representatives of disproportionate political parties would be an affront to democracy, particularly under a minority Government.
If there are those who doubt that such conditions could arise, let me remind the House of the comments of the noble Lord, Lord McNally, who is in his place, speaking on behalf of his party in 2005:
“I do not believe that a convention drawn up 60 years ago on relations between a wholly hereditary Conservative-dominated House and a Labour Government who had 48 per cent of the vote should apply in the same way to the position in which we find ourselves today”.—[Official Report, 17/5/05; cols. 20-21.]
Speaking in the same debate, the noble Lord, Lord Thomas of Gresford, said:
“The Government should not rely on an outdated convention but should argue for their programme on its merits”.—[Official Report, 23/5/05; col. 274.]
We can see where the Liberal Democrats are coming from and how they see their role in the House.
We are on notice, let there be no doubt, that a disproportionate and more assertive House of Lords that could meet after the 2015 general election may lose all credibility if it proceeds to handle legislation under the present arrangements. I foresee a crisis in credibility and the management of business, and some of us may well have a lot to say pending the wider debate on Lords reform. I believe that a major review of our procedures, under the changed circumstances that I have outlined, is utterly inevitable.
And now for something completely different. I am very pleased to have the opportunity of this debate to fly a kite which I have flown at least three times before. It is my idea for debating statutory instruments. I thank the noble Lord, Lord Foulkes, for this chance. I have not flown the kite so far this year, so that is why it is going to have another outing.
My starting point is that affirmative statutory instruments, which are powers devolved by Parliament to Ministers, say that they are in draft, but that only means that they have not yet been through both Houses to be approved, so “draft” does not mean that they can be amended. One of the first things you learn about SIs is that they cannot be amended by either House, only agreed to or thrown out. We in this House are very loath to throw them out because our mindset is to try to seek consensus to make the law better, mostly where it resides in a Bill. However, sometimes an affirmative SI contains a good deal of meat which could not be foreseen in the parent Act, or circumstances have changed between the passing of an Act and the making of an instrument—years often pass—so, on occasion, a draft affirmative SI is laid before Parliament which is extremely controversial. Various Peers may table regret or even deplore Motions, with reasons, but that does not alter the fact that even if these Motions are passed, the SI is still passed with a mild slap on the wrist from the House.
How much better it would be to have a meaningful debate about the substance of the instrument in the Chamber, without the instrument itself being taken at that point. I envisage a carefully worded resolution to which amendments could be proposed and voted upon, but with their effect being advisory only. This would almost be another stage in the consultation process, which all Governments now take much more seriously than they did. The House would be the consultee, knowing that the arguments could be taken on board by the Government. The Government would know what the arguments against the instrument were. At that point, they might just decide to tough it out by taking the original instrument through the House, marshalling their arguments accordingly. Or they could withdraw the original instrument, even if it had been through the House of Commons, and retable another one to reflect points made in the earlier debate.
I know it will be said that I am being unrealistic and that no Government would agree to such a procedure willingly. However, if in the future more SIs are voted down, as quite a few Peers advocate, then any Government might feel that my halfway house approach is preferable. I do not think that this procedure would be used more than once or twice a Session, if that. The real question is how long Parliament will accept the “take it or leave it” procedure we have now.
My Lords, I am grateful to the noble Lord, Lord Foulkes, for giving us the opportunity to debate our procedures, but I really cannot agree with the noble Lord, Lord Strathclyde, that this is a matter we should look at only once every 10 years when we have a Leader’s Group. It is precisely because I so strongly believe in the value of the work of the House of Lords that I want it to be seen to be done as effectively as possible.
It would be wrong to deny that improvements have been made since the Leader’s Group chaired by the noble Lord, Lord Goodlad, on which I had the honour to serve. We now make better use of Grand Committee, and have extra Select Committees on specific subjects, more time for QSDs and more pre-legislative scrutiny. All this is very welcome. However, the system does not work in the way that the noble Lord, Lord Strathclyde, suggested. I want to take just one case history to illustrate that, as I have only limited time.
The Goodlad group recommended that this House should give Back-Benchers the opportunity to propose subjects for debate, as happens in the House of Commons. That was considered by the Procedure Committee, which agreed that it should be put to the House in a neutral way because, as the noble Lord said, it is for the House to decide. The relevant Motion was tabled. There was no Whip on the government side but Members on the Government Front Bench made it absolutely clear to their Back-Benchers that they were opposed to the Motion going through. They did that by ensuring that the debate took place on a day when the government parties were heavily whipped. Noble Lords who were not in the Chamber received a message on their mobile phones, saying that their Lordships might like to know that the Government Front Bench did not wish to see the Motion go through. It was not a Whip but it was something pretty close to it. That was how the Motion was defeated in this House. I am afraid it is the case that improvements which are in the power of the House to make are often defeated by the Government Front Bench, often in cahoots with the Opposition Front Bench.
I know that an effective House of Lords is often regarded by the Executive as a thorough nuisance. Parliament is regarded by the Executive as a thorough nuisance. However, having spent my career in the Executive, I know very well that it would not be kept up to the mark unless Parliament did its job of holding it to account and making itself awkward to the Executive from time to time. Your Lordships’ House should always ask how we can do that job more effectively—not by obstructing the Government getting their measures through but ensuring that they work to high standards. One of the weaknesses of Governments in this country is that there is too much legislation of too low a standard.
Both the House of Commons and the House of Lords should be taking a stand on that. The House of Commons is often not in a position to do so but the House of Lords is, and it is for that reason that many of us have argued that there should be a committee to look at the standards of preparation of legislation and advise the House when legislation coming before it has not been properly prepared. Then we might be saved from legislation such as the absurd Social Action, Responsibility and Heroism Bill—the SARAH Bill.
If there is one message that I would like to ask the Leader to take to her colleagues, it is that while they may regard the improvements in the effectiveness of Parliament, and in particular of your Lordships’ House, as a nuisance, they should take a longer-term view because we have a role in improving the Government’s performance; and those improvements are in their interests as well the country’s.
My Lords, a number of points have been raised on which I might very well like to comment on another occasion, but time forbids me to do so now. I listened to the noble Lord, Lord Butler, who was a most distinguished Cabinet Secretary, as he reminded your Lordships. I was a very junior Minister in the Government over which he so effectively presided, if that is the right word, and we spent our time thinking of ways of doing things that did not need parliamentary or ministerial approval.
The purpose of your Lordships’ House, as is often said, is to examine Bills in detail and debate important matters. It is also important that the House should not forget that it indeed has a duty to hold Ministers to account, as MPs do in the other place. We tend to do so more gently, perhaps more courteously, here than in the other place. Questions to Ministers are a crucial part of that process. We have four Oral Questions a day for four days a week, and three topical Questions, but no Questions on a Friday, which is regrettable. Often no slots are available and we often have the unseemly sight of noble Lords queuing outside the Minute Room waiting to table their Questions. They have to sit there for an hour or more sometimes to get just one slot. We are allowed only one Oral Question on the Order Paper at any time, which is understandable and necessary, given the restriction in the number of slots, but it certainly restricts the capacity of noble Lords to table Oral Questions.
I suggest that we think in terms of increasing the number of Oral Questions to perhaps five a day instead of four—and, as I say, perhaps to allow Oral Questions on Fridays. If we were to allow five a day, I would advocate no increase in the time we have to take Questions, namely 30 minutes. The reason for that, I have to say, is that ministerial answers are often rather long-winded and could be further reduced in length, particularly to meet the opportunity for Back-Benchers to ask more supplementaries. However, Back-Benchers should also be ready to keep their supplementary questions shorter and more terse than at present. We have on many occasions heard noble Lords reading out three or four questions supplementary to a single Oral Question; we lose track of them by the time the noble Lord sits down and, of course, Ministers are obliged to answer only one. That has removed the opportunity for at least one or two noble Lords to ask any supplementary question at all.
I turn now to topical Questions. Three are three a week, decided by ballot. On the whole, that system works rather well and I hope that it will be continued. However, topical Questions are heard as Oral Questions in the normal way and ought to be subject to the same restrictions on length.
I will also refer to Private Notice Questions. One way in which to increase the opportunities for Back-Benchers to ask questions would be to relax the rules that govern the allowance of PNQs. Very few are taken in this House, mostly because they have been refused by the Lord Speaker—correctly, no doubt, in accordance with the rules—but also because noble Lords are put off tabling them, assuming that they will be refused, as is usually the case. In years past, Private Notice Questions were considered and allowed or disallowed by the Leader of the House, not the Lord Speaker, and there was a right of appeal to the House if a Private Notice Question was refused. That is not now the case. There is no appeal following the refusal of a Private Notice Question. That is regrettable. I once put that very proposition to the Procedure Committee and it was rejected fairly smartly. However, I think the fact that Private Notice Questions are allowed or disallowed absolutely by the Lord Speaker and there is no right of appeal is not the right arrangement. I hope that that can be further considered.
I will refer to Questions for Short Debate. As a matter of fact, I think that they work rather well. There is a question over whether perhaps we should have only an hour instead of an hour and a half—in which case I had better sit down quickly. Be that as it may, I think that they work well, on the whole.
Finally, I will respond to the point made by my noble friend Lady Thomas about statutory instruments. I am probably one of the very few Members of your Lordships’ House who was here in 1965 when we turned down the statutory instrument imposing sanctions on Rhodesia for the first time. I remember my late noble friend Lord Jellicoe standing at the Dispatch Box, turning round and advising my noble friends to reject the Motion, as indeed we did. Whether that was wise or unwise is for others to judge. There is an argument for allowing noble Lords some means to amend statutory instruments. They can, of course, reject them and Ministers can come forward with a revised one, but that very rarely happens—I cannot remember it ever happening. However, I have some sympathy with the point made by my noble friend.
My Lords, it is desperately dispiriting that nearly all debate about reform of this House concentrates on the single issue of whether we should be elected. I am not in favour of election, but I am in favour of a radical change in the way the House works. I believe such a change is necessary if we are to earn our corn in the troubled political period ahead of us.
The pace of change in this House, though it never goes much above glacial, ebbs and flows over the years—it has over my 16 years, anyway. Perhaps it reached a peak just before the House debated the Goodlad report in 2011. Indeed, on hearing the noble Lord, Lord Strathclyde, I nearly bit back the reflection I am about to make. Looking at his period as Leader, it is as though we had a radical reformer, red in tooth and claw, at the helm of the Lords. Since then, nearly all change has come juddering to a halt. Even then, the agenda we were considering was relatively constrained.
I know that some noble Lords will disagree, but, for example, is it really sensible to examine a Bill by me making a speech at a Minister sitting there and the Minister making a speech back at me? Of course not: it should be in a reasonably small room, exchanging views in a conversational way and taking evidence if necessary. Even Commons Bill Committees now take evidence, but we still think that making 19th century-style speeches is the sole way to do it. We could be even more effective revisers of legislation if that changed.
I can think of a number of other issues on which wider reform is more necessary than anything that has yet been floated. Why does it not happen? It is because the forces of conservatism in this House are very strong. This is not mostly due to the Members, although there are a few who think that it has all been downhill since the 1911 Parliament Act.
Thank God we do not have them anymore.
The real resistance to change, let us face it, comes from the Whips—from the Government leadership—because they have a sole object, for all the gilded words in which they tend to clad it: to get the Government’s business through with as little trouble, scrutiny and change as they can get away with. That is their fundamental mindset. I do not criticise them for that—that is what they are paid for.
Those are the forces of conservatism. However, it seems to me that there is now a great countervailing force in the people who are coming into this House, particularly—we are all glad to see this—the growing number of women but also people from outside politics and those who have not been acculturated to the way in which we have traditionally done business. I know that there is an argument about whether the Lord Speaker should call questioners. Who has talked to incoming Members about Question Time—about the bear garden and about the bullying males thrusting ahead of polite women and preventing them getting in? I will not come in for Question Time; I have had 16 years of listening to it. Seeing what we tolerate brings the House into poor regard. Therefore, I believe that there is a constituency for change.
I just wanted to give another impression to the noble Lord, who is concerned about women being shouted down at Question Time. I carried out a statistical survey over four weeks and discovered that proportionally there were more interventions by women at Question Time than would be expected from their number in the House. In other words, they are not shouted down; they are managing quite nicely and the noble Lord ought not to worry.
I am delighted that there are some bullying women as well as some bullying men.
I come to my final comment, which reflects a point made by the noble Lord, Lord Strathclyde. It is true that the forces of conservatism that I have described have this House in a strong grip, but they need not be allowed to have that grip. Down in the Commons, people said, “We’ll never get a business committee here”, but they have. People said, “We’ll never get to elect Select Committee chiefs here”, but they have. Back-Benchers have fought for their roles and rights and they have won their roles and rights. If I am right that in this House there is now a new spirit—particularly among the new arrivals, although there are many distinguished older Members who share it—we simply have to stop knuckling under out of a false politeness towards the official leaders of the House and force change through.
My Lords, it is a pleasure to follow those comments and the others that reflect the need for modernisation in this place. As a conservative with a small “c”, I also had the feeling when I first came here 10 years ago that one should not really utter any suggestions or ideas about these things for the first 17 years because that would be very pushy and presumptuous, and people would, rightly, tut-tut. However, things move on and accelerate, and this place is changing. The sociology of the House of Lords has changed enormously. Taking a foreign example, I have always been impressed with the system in Denmark. It is a single-Chamber system where a perpetual minority Government are on their knees, constantly begging MPs in Copenhagen to support their latest legislative proposal. I do not detect that Denmark is worse run than Britain; in fact, it is probably the other way round. Denmark also has a high-taxation system, both indirect and direct, which produces efficient economic results.
Secondly, on arriving here I treasured the story of the old days when, about 50 years ago, the Chief Whip said to a hereditary Peer who had just joined the House, “It is a great honour for you. You’ve got to appear to be very enthusiastic and deeply honoured to be here. On the question of making your maiden speech, you shouldn’t be pushy but you should be enthusiastic about doing it, eventually”. The new Peer asked, “How long do you recommend”, and the Chief Whip replied, “Three and a half years”. Nowadays, it is three and a half weeks, which is considered to be quite a long time.