Queen’s Speech — House of Lords, 2015-06-04
Topic: Macroeconomics
Sheila Masters (Conservative, Centre-right): I extend the warmest of welcomes to my noble friend Lord O’Neill of Gatley, and to his role at the Treasury, and I congratulate him on his maiden speech. We are very lucky to have his expertise on our Benches. I also welcome back to her enlarged ministerial role my noble friend Lady Neville-Rolfe It was good to hear the maiden speech of the noble Lord, Lord King of Lothbury, which brought back happy memories of my years on the Court of the Bank of England. His huge expertise will be of great value to your Lordships’ House The last five years have been marked by the outstanding economic leadership of my right honourable friend the Chancellor. I particularly welcome the commitment in the gracious Speech to continue with the long-term economic plan, and to bring the finances under control and reduce the deficit. We have made a lot of progress in the last five years but there is much still to do, and I am glad that we now have the opportunity to complete that task There is a temptation for any new Government to launch large legislative programmes, and I would like to offer the Government a few words of advice. Please do not feel it is necessary to legislate. The electorate did not vote for lots of legislation. Businesses are certainly not gagging for more legislation. Businesses in particular want to be left alone to get on with their role of job creation and wealth creation. The Government should be especially wary of gesture legislation. Here I agree with the remarks of the noble Baroness, Lady Kramer, and the noble Lord, Lord Turnbull, in respect of legislating not to put taxes up—legislating not to do something you are not going to do anyway. That is actually an abuse of legislative time Noble Lords who have heard me speak before will not be surprised to learn that there is one Bill about which I am hugely enthusiastic, and that, of course, is the European Union Referendum Bill. Today, I will say only that it is important that we have an informed debate about the economic benefits or otherwise of our membership of the European Union and the opportunities and risks involved in withdrawal. It is far from a self-evident truth that there is a net economic benefit to our remaining in membership; indeed, many studies show quite the reverse. I sincerely look forward to that debate I know that the Government’s deregulatory heart is in the right place—we have had two rather large Bills already this year that had deregulation at their heart, and we are now promised even more in the enterprise Bill. If it really is necessary to legislate again, so be it; but the more important thing is to achieve real reductions in regulation. In that light, I certainly welcome the Government’s announcement that they will cut another £10 billion of red tape over the Parliament. Will my noble friend the Minister say how much of that £10 billion is expected to deliver for small and medium-sized enterprises? Not all regulatory savings are equal; those which benefit SMEs can be more equal than others In the limited time available today, I will refer to two bits of legislation in the gracious Speech that trouble me, and one thing the absence of which I regret. I will start with my regret. Yet again, the Government have missed an opportunity to signal the merger of income tax and national insurance—an idea that has much support, not least from the Office of Tax Simplification. Taxpayers find the different rates and thresholds baffling, and businesses bear the brunt of complex and burdensome administration. A brave Government would set a course towards a merger The gracious Speech has confirmed that the Government remain set upon legislation for High Speed 2. Earlier this year, a report from your Lordships’ Economic Affairs Committee concluded that the Government have yet to make a case for continuing with this project. For a cost of a minimum of £50 billion, we might shave 20 minutes off the travelling time between London and Birmingham. HS2 does not even connect to the northern powerhouse. The Government would be very wise to look again at this project with a cold and analytical eye That is the first thing I find difficult in our legislative programme. The second—and, the Whips will be pleased to know, only other—thing I have difficulty with is the commitment to increase the amount of free childcare to 30 hours a week for working parents of three and four year-olds. I am quite sure this policy is popular with those who are eligible: any policy that has other taxpayers picking up the tab for something you would otherwise pay for is bound to be popular. But this is evidence-free policy-making, and the Minister who defended the policy on Radio 4 earlier this week merely asserted that it was the "right thing to do", and offered no rationale I could support the policy if it increased maternal employment, but the evidence base shows at best a weak employment effect. I could support the policy if it was about improving the life chances of children, but that would require eligibility to be based on the disadvantaged status of children, not the working status of their parents. This policy will work only if the Government accept that the private sector providers who are crucial to delivering it are currently inadequately funded. Put simply, free childcare will require a lot more money. The report of your Lordships’ Select Committee on Affordable Childcare, on which I served, sets all this out. I am genuinely surprised that the Treasury has endorsed a statist policy that has so many obvious question marks over the value for money it could deliver I conclude by welcoming the policies that are directed at restoring prosperity to our country. We have been saved from mansion taxes, from the 50p rate of tax, from the persecution of non-doms and from policies that viewed businesses as predators, rather than creators of wealth. Now, let us get on and prosper—and with as little interference as possible.