Queen’s Speech — House of Lords, 2015-06-04
Topic: Macroeconomics
Richard Newby (Liberal Democrats, Centre to centre-left): My Lords, it is a great pleasure to be able to speak in today’s debate before I re-enter the Stygian world of the Whips’ office. I welcome the noble Lord, Lord O’Neill, and congratulate him on his maiden speech. I wish him well. I also look forward to the maiden speech of the noble Lord, Lord King of Lothbury. I will say something about the economy and then something, given that it has attracted considerable interest, about the attitude on these Benches towards the passage of business in your Lordships’ House Although the economic position inherited by this Government is incomparably stronger than that inherited by the coalition in 2010, a combination of deep-seated problems and external risks means that we are definitely not out of the woods. As far as the macroeconomic position is concerned, great progress has been made in reducing the deficit, and clearly more needs to be done, but I urge the Government not to bring about an accelerated elimination of the deficit on the back of very significant welfare cuts for the working poor and modest earners. That is neither economically necessary nor socially justifiable It is said that the only reason the Conservatives included the provision of £12 billion of welfare cuts in their programme was that they knew that, in any second coalition, the Liberal Democrats would not let them get away with it. They are now embarrassed and confused because they have not the faintest idea how they will make the cuts. I will make the Minister an offer. If the Government would still like the Liberal Democrats to scupper these proposals, I am sure that, with colleagues from across the House, we are still prepared to oblige. Perhaps the Minister will tip me the wink when the welfare reform legislation comes forward, and I will see what I can do In terms of the deep-seated economic problems facing the country, the last Government began to tackle some of them with some success, but much needs to be done. I will briefly mention three issues, all of them falling within the Minister’s priority of productivity. The first relates to innovation. Although the UK is a world-leading innovator in the service sector, we consistently spend less than our major competitors in this area in manufacturing. We are in fact 19th in the OECD for total expenditure and 24th for government R&D spending. We should be looking to increase the Government’s own investment in R&D to bring us much further up the OECD table. In particular, it is extremely important that we invest further in the extremely successful Technology Strategy Board, the Catapults and the sector research bodies, and that we commit to doing so over the long term Secondly, the housing shortage is now becoming a crisis. On current policies, the problem will get worse during the course of this Parliament rather than better. It is a particularly acute problem in London and in the social housing sector. I was therefore depressed to see that the Conservative manifesto devoted just three sentences, one of them descriptive, to affordable housing. Many changes will be needed in this area if we are going to really deal with this problem. I mention only one, which lies at the door of the Treasury and is an institutional mindset which is deeply damaging. The Treasury currently does not regard housing as part of our national infrastructure—as I discovered when I asked for a brief on infrastructure from Treasury officials last year. This must change, and the Minister is ideally placed to change it. I hope he will Thirdly, there is the northern powerhouse. The Chancellor, in his guise as the thieving magpie of Liberal Democrat policies, has very sensibly identified the need to give greater government impetus to the development of the north by latching on to Nick Clegg’s advocacy of greater powers for the northern cities. This is greatly to be welcomed. However, not only must the northern cities and indeed other cities be given greater powers, as is planned, but if the infrastructure of the north, particularly the transport infrastructure, is to match that of London, greater powers on their own are not enough. More resources are going to be needed if we are going to transform trans-Pennine rail links, for example, than simply giving northern cities greater powers Much has been said already in these debates about the Salisbury/Addison convention and how the opposition parties should behave in this Parliament. Let me make it clear that, for my part, I would not support any suggestion from any of my colleagues that we should seek to frustrate the Government by filibustering or by mounting a full-frontal attack on every aspect of the Government’s legislation. But what we shall do is to challenge aspects of legislation with which we disagree. In doing so, we will be guided by the traditions of the House. As a young and impressionable Treasury spokesman in your Lordships’ House, I learnt about these traditions during the period of the last Labour Government Several episodes stand out in my mind. I remember with affection the vote called on the then Financial Services and Markets Bill by the noble Lord, Lord Saatchi, at 10.45 pm on 9 May 2000. I also remember the noble Baroness, Lady Noakes, catching me almost literally napping when she called a vote at 11.35 pm in Committee on the then Banking Bill on 26 January 2009. I also remember the memorable day when the noble Lord, Lord Davies of Oldham, rang me in my office having suffered a big defeat on the first day in Committee the previous day, on an amendment to the statistics Bill, to sue for peace. In that case, the Government had brought forward a Bill which seemed calculated to give Ministers more control over official statistics when they were pledged to reduce it. A cross-party group led by the noble Lord, Lord Moser, sought fundamentally to redraft the Bill. As a result of this early defeat in Committee, the Bill was largely redrafted. I think that everybody, perhaps even the noble Lord, Lord Davies, agreed that this was the Lords doing its work My experience in government was that, when the Government lost the argument, they tended to lose the vote. There have been a number of the Government’s flagship proposals which we have already debated in these Queen’s Speech debates where the Government have already lost the arguments. They can expect a busy time in the Division Lobbies in the months ahead.