Queen’s Speech — House of Lords, 2022-05-16
Topic: Macroeconomics
Questions: 2050—I am just 100 years out. Even if we get to that, a lot of countries in the world will not. Two things follow from that. The first is that climate change will not be significantly improved. We in this country produce 1% of the world’s emissions, so if we have all the struggles and make the vast expenditures but other countries do not, we will not have achieved anything so far as climate change is concerned Secondly, if we have spent an enormous amount of money improving our electricity and getting it all done, our electricity will almost certainly be more expensive than it is in other countries. There is a danger we have to watch, as the heavy industrial users of electricity will build their factories in other countries, not in those that have spent all that money on this. We have the time to deal with this, but we have to be very careful that that is not the end result of what we do.
Christopher Fox (Liberal Democrats, Centre to centre-left): My Lords, it is a great pleasure to speak in the debate on Her Majesty’s gracious Speech. I congratulate the right reverend Prelate the Bishop of St Edmundsbury and Ipswich on his very thought-provoking maiden speech. This has been, by definition, a very wide-ranging debate, and there have been over 50 contributions, many of which have been absolutely excellent—not least from my noble friends on the Benches behind me. I will not attempt to summate those 50 speeches in my 10 minutes, but I am sure that the Minister—the noble Lord, Lord Callanan—will respond in his normal enthusiastic and helpful way to all the points raised by your Lordships today The net-zero points raised by my noble friends Lady Parminter and Lord Redesdale were really important but I will focus my comments on economics and business, as befits my portfolio. One issue dominating a number of speeches today, which was not in the Queen’s Speech, is the role of the Bank of England. Almost everyone who spoke on this subject agreed on the facts of what has been going on; what varied was the tone. Here I think we have to be a bit careful; the noble Lord, Lord Griffiths, encapsulated that in his speech. It is important that this country has an independent Bank of England with the confidence to exercise that independence properly. We have to be careful not to undermine—or set in train a process that undermines—that overall process. We in your Lordships’ House have a duty of care around this issue The noble Lords, Lord Bourne and Lord Bridges, were searching for vision in their speeches. I had the same issue when analysing the Queen’s Speech so I went back to the nearest thing I could find—or at least the nearest thing purporting to be a vision—which is the Build Back Better brochure. This is 100 colour pages, the purpose of which, as far as I could tell at the time, was to replace a semi-coherent industrial strategy with a series of initiatives and press releases. However, if you read the foreword from the Chancellor, you see that it is the Government’s plan for growth, so I thought it might be worth trying to test that against where we are now Fifteen months have transpired; how is the process going? Well, "better" is not a word that I would use to describe the situation. As we have heard from many speakers, not least my noble friend Lady Kramer, the Bank of England said this month that inflation would probably peak at over 10% this year and potentially send GDP growth into reverse. In other words, the UK is likely to be heading for either recession or stagflation, a word that many of your Lordships have used today. Yet, with inflation raging, the Government have chosen to raise the taxes that everybody pays. Thanks to this Conservative tax hike, households are paying an extra £1.6 million in tax every hour of the day—I repeat, £1.6 million per hour David Smith, economics editor of the Sunday Times, summed things up very well in his column: "As things stand, we seem to be building back worse, with the worst inflation problem for 30 years and a badly functioning labour market with a reduced workforce and labour shortages. We have poor short and medium-term growth prospects—with the economy struggling to keep its head above water—and a lot more government debt. In prospect is the highest tax burden since the country was emerging from the Second World War under the Attlee government in the late 1940s." That encapsulates the situation in which we find ourselves today, yet the Queen’s Speech addresses none of these issues. In fact, it almost seems to ignore the horrible economic prospectus set out so clearly. This not only threatens the lives and welfare of most people in this country but bids fair to send many firms to the wall at the same time Quite rightly, business organisations have voiced their concerns about the Government’s economic stasis. Responding to details of the Queen’s Speech, the director-general of the British Chambers of Commerce, said that "unless the Government takes immediate action on the economy, they will come too late to help many firms." Of course, at the heart of this are increased energy costs, and we should be clear that this was already an issue before the Ukraine war, but this brutal war will make a temporary issue much more long term; that cannot be ignored. As we have heard, it is clear that we have to escape absolutely our dependency on volatile oil and gas prices and deliver net zero. Global economics and geopolitics are reinforcing the overwhelming environmental arguments The Government have published an energy security strategy. The fact that the issue is being discussed is welcome, and indeed some of the long-term strategies are on really important matters that we should look forward to. However, the strategy really focuses only on the long term—for example, it proposes nuclear that will not be available until at least after 2030—but it is the short term that is crippling the country. To get to a point where this strategy starts to kick in, we have first to negotiate the next three winters. That is crucial and a difficult challenge, but nothing so far indicates how we are going to do it. Make UK, the manufacturers’ organisation, is very clear on this issue: the projects that are mentioned in the strategy cannot be delivered quickly and, at a time of spiralling energy costs and myriad other financial burdens on business, industry desperately needs urgent action, but nothing seems to be forthcoming. So perhaps the Minister can tell your Lordships’ House how the energy security Bill will deal with the immediate issues that we face One of the key pillars in the Build Back Better brochure is innovation. I have looked through the Queen’s Speech but I find nothing that seems to drive the innovation agenda. Why is it being ignored? Of course, last Session, we had the Advanced Research and Invention Agency Act, which was presented very much as driving innovation and productivity. I seem to recall a triumphant Minister at the Dispatch Box announcing the appointment of Dr Peter Highnam as CEO. I do not remember him coming back and telling us that Dr Highnam quickly withdrew his candidacy. Perhaps the Minister could update the House today on why Dr Highnam withdrew, when a CEO will be appointed, when a chair will be appointed and when the location for the HQ will be announced. When will ARIA actually have a material impact on anything that is going on in this country We all worked hard to deliver the Economic Crime (Transparency and Enforcement) Act in super-quick time in the last Session. A lot of that speed was predicated on the necessity of a second Bill in this Session, so I welcome the inclusion of an economic crime and corporate transparency Bill in the gracious Speech. However, can the Minister confirm when we can expect to debate that Bill? Will he also update the House on progress with implementing the first Bill, which we passed in the last Session? There was a lot to do in implementing that Bill, and we would like some sense of where we are. It appears to have gone a bit quiet but the whole Companies House issue needs to be started now because of the huge culture change that we need to see in that organisation In conclusion, when it comes to the economy and business, the Queen’s Speech is remarkable for what is missing. It seems to limp into the future without addressing how we are going to negotiate the present. We need action to help people to meet their bills, and we have to find a way of doing so now. Many noble Lords have mentioned a windfall tax on energy, not just from the Benches on this side but right across your Lordships’ House. In general I am not a fan of measures such as windfall taxes, but the logic of the case for it here is clear and the need for it seems to me to be irresistible. I think even the Prime Minister is supporting it, and there is only one person stopping him from doing it With energy prices soaring, the oil majors have announced eye-watering increases in profits and have accelerated share buybacks. The Government cannot reduce the cost of energy on the world market but they could use cash from a windfall tax to help the most vulnerable people and businesses. They could pull hard-pressed families back from the brink. To do that, we need an emergency Budget, not only to reinstate the £20 uplift in universal credit but to reduce VAT as soon as possible. As many noble Lords have pointed out, dark clouds of poverty are looming over our economy, and every day of inaction from this Government will force more people to make the heartbreaking decision between heating and eating. I am afraid that this Queen’s Speech does absolutely nothing to address that issue.