Autumn Statement: Economy — House of Lords, 2016-11-29
Topic: Macroeconomics
Julian Charles Roland Hunt (Labour, Centre-left): My Lords, the Autumn Statement focused on policies to improve people’s prosperity. I declare my interests, which include giving a little help to business and government We should welcome the Government’s maintaining a national living wage. It is another pillar of a modern state that the Conservatives and their business supporters first resisted long ago. It is now very welcome that they endorse this policy as being part of a modern Government. The other pillar that is integral to the welfare state of most European countries is modern, environmentally secure housing for all. However, the Government’s welcome plan to increase housing does not include any significant return to social housing for the majority who cannot afford the huge costs of owner-occupation. I welcome the noble Lord, Lord Horam, on the Benches opposite making that point on the Minister’s behalf We can all welcome the Government’s objective to improve prosperity. However, as other speakers on this side of House have emphasised, we fear the downbeat assessments of the damaging threat of Brexit and the prospect of the continuing low productivity of UK business, which will not be helped by the dislocation between UK and EU business and technology that I fear will result from Brexit. I will return to that. Low productivity means that too many people have low-skill jobs that do not use their education and training. It also demotivates people from pursuing higher training, as the noble Baroness, Lady Vere, explained Reduced unemployment should remain a vital objective, as the noble Earl, Lord Listowel, commented. The UK needs to encourage overseas high-productivity companies such as Veolia and Suez, which provide basic services, to come here. Some companies provide laboratories and design centres, such as Nissan at Cranfield. The Government should help increase productivity by linking their policies with public bodies’ investments, but Whitehall—I had experience of Whitehall when I worked at the Met Office—always finds linking such policies a challenge, as the noble Lord, Lord Hennessy, said. Perhaps the new ministry—the BEIS—will succeed The Chancellor advocates that UK companies need to grow and have high productivity. But how will these companies remain in the UK? The Chancellor did not have the answer but he pointed to the problem. This will surely depend on collaboration between the Government and the financial sector to keep these companies in the UK with sufficient finance. We have seen many high-tech companies grow and then leave the UK—some of my own friends in Cambridge did that. Socially and economically important types of UK companies need to grow and make good use of advanced engineering technology. For example, UK businesses need to provide materials and technology to improve the thermal efficiency of buildings. This needs to be a UK effort and success story in place of the huge imports from the continent that we have at present. The thermal efficiency and resilience against flooding of UK buildings are much inferior to those of other European countries. The Government’s green plan for improving housing was not a success Investment in road and rail is another aspect of the Government’s plan for investment, which is very welcome, and this construction is equally important for the UK’s economic future. Some of the UK’s transportation is of course world leading: for example, we should not forget that the tunnel in London is definitely a world leader. But I am always amazed that our business community does not follow our French neighbours in establishing toll roads—which, as we see in France, are generally superior to our saturated motorways and built so much faster across their whole country. UK A roads are also being built too slowly, and their parking lay-bys are very unhygienic places I will end on a more positive note, about how the Government and City are progressing the growth of UK-European technological and commercial collaboration. The success of non-carbon nuclear and wind by French, Danish and Japanese companies working in the UK contributes greatly to Britain’s contribution to reduce climate change. Airbus is a partially UK-owned business, centred on advanced collaboration in manufacturing and aerospace. My noble friend Lord Jones is expert in that, since of course the wings are built in the Welsh-English border territory. However, will the Government ensure that the UK’s share will be maintained? It is now less than 20%, and the UK is no longer involved in the strategic steering of Airbus. Perhaps we should be confident that this collaboration will be supported by the Prime Minister. Unlike Mr Cameron, who flew to Beijing in a Boeing, Mrs May recently flew to India in an Airbus 330. Even the Daily Mail thought that was a good thing—although it did not mention that the aeroplane was built in France: that would have been too much. This is an encouraging sign for European and global collaboration, and perhaps it is the right sort of industrial strategy.