[The full debate is available at the Parliament website]
My Lords, it is a great privilege to open this debate on Her Majesty’s gracious speech. And I wish to thank my noble friend Lord Henley, who will be winding up. He is no stranger to being a Minister and I am grateful today for his experience…
My Lords, our discussion will cover Business and Economic Affairs, Environment, Energy, Agriculture and Transport.
These issues are essential to securing Britain’s economic recovery and global success in the future and the gracious speech supports Government’s ambitious agenda to:
- Decisively tackle Britain’s deficit;
- Address the fundamental causes of the financial crisis;
- Build a sustainable private sector recovery. That is balanced across all regions and industries and promotes resource efficiency and the protection of our environment; and
- Finally, to secure the right mix of public and private sector investment to modernise Britain’s infrastructure.
Decisive Action & Reform
My Lords, the Government’s most immediate task must be to reduce Britain’s record deficit. According to the IMF and European Commission, this year it is set to be the largest in the G7 and the European Union.
The Government is borrowing £1 of every £4 it spends. That’s a drag on our people’s ambitions and efforts to foster growth.
The Government must take action now. With the support of the Bank of England and based on analysis from the Treasury, we have identified and committed to cut over £6 billion of wasteful spending across the public sector.
Focused on protecting the vulnerable and maintaining the quality of our front-line services, these measures will increase efficiency and value for money, and enable Government to reinvest part of these savings in Britain’s long-term growth.
My Lords, wider reform is also needed to boost credibility and trust in the UK’s fiscal framework and financial regulatory system.
With its statutory responsibilities enshrined in the Budget Responsibility Bill, the new Office for Budget Responsibility will make an independent assessment of Britain’s public finances and economy - putting us at the forefront of international best practice.
Government’s budget forecasts over the last decade have underestimated borrowing compared to independent forecasts. On average, in that same period, their forecasts for economic growth have also been out by £13 billion.
An independent Office for Budget Responsibility will ensure that policy is developed based on a more accurate picture of Britain’s public finances and prospects. Its first findings will inform the emergency budget on Tuesday 22nd June and future fiscal events.
My Lords, out of the millions of words written about this financial crisis its causes are clear - reckless lending, excessive borrowing and poor financial regulation.
Breeding confusion over the roles and responsibilities of its authorities, the current Tripartite system [Bank of England, Financial Services Authority and Treasury] failed to do its job. We need to learn from these mistakes.
The Government believes the Bank of England, with its clear remit for monetary policy, is best placed to strengthen the link between financial stability and macroeconomic policy and, as a result, monitor and manage risks and imbalances in our economy. The Financial Reform Bill will give the Bank of England the control to do just that.
The Government is also developing measures to establish a more stable and effective banking system and ensure profitable businesses, especially SMEs, can get access to the credit they require to succeed.
Britain Open for Business
My Lords, ultimately, it is these businesses that will generate the growth and innovation we need. But to do that effectively, Government must promote, not stifle their enterprise.
Our Government is committed to developing a new model for the British economy. One that’s balanced across all regions and sectors; supports sustainable growth and enterprise; works with rather than against the natural environment and enables us to seize market share in leading global industries such as low-carbon.
That demands we set out a clear vision of how Britain needs to earn its living in the future and deliver the open, competitive business environment, skilled, flexible workforce and cutting-edge infrastructure needed to make it happen.
To do that, the Government is working to free small and medium sized businesses from unnecessary regulation; cutting through the burden of red tape that holds them back; and making it easier for entrepreneurs to start a new business.
We’re reforming our tax system so it’s simpler, fairer and more competitive. As part of this work, the National Insurance Contribution Bill will bring forward necessary changes to safeguard jobs and support the economy.
We also want to increase the potential for SMEs to sell their high-tech products and services around the world and to win public sector contracts.
And we will make it easier for small businesses to do business with government, by making opportunities easier to find and by simplifying and streamlining the procurement process.
My Lords, we will also work with our universities and colleges to strengthen their links with industry and ensure our people have the skills they need for the jobs these companies create.
In addition, we will remove barriers to flexible working - helping businesses to recruit and retain talent and enabling individuals to balance work demands, with their family responsibilities.
In the coming months, we will consult fully with business and families to identify the best way to introduce this change.
Finally my Lords, every modern business needs access to cost-effective and reliable energy, transport and communication networks to thrive.
Energy & Environment
In each of these areas, new technologies and the demand for sustainable solutions presents us with significant challenges and opportunities.
In energy and environment, we need to tackle climate change; use our natural resources more effectively; secure low-carbon energy supplies; and cut our carbon emissions.
In the long-term, economic growth depends on the raw materials provided by our environment and it’s crucial that we gain a better understanding of their value and how we can best manage them in the decades to come.
The Government will therefore introduce a Natural Environment Paper, the first since 1990, setting out a new, more integrated strategy to the management of our natural environment, including action to protect wildlife and increase biodiversity.
The Prime Minister has said he wants this Government to be the greenest ever - both in terms of action at home and internationally. If we succeed, the potential prize for Britain’s people and businesses is thousands of new green jobs and a lucrative share of the growing market for environmentally sustainable technologies, goods and services.
To ensure the finance is available to help us make the most of that opportunity, the Government is creating a Green Investment Bank and will develop new green financial products and a range of wider measures.
The Energy Security and Green Economy Bill is a key part of that programme, providing the right legislative framework to deliver a successful low-carbon future for Britain.
To do so, it will help increase energy efficiency in our country by enabling a ‘pay as you save’ approach. Our Green Deal will enable householders to benefit from efficiency measures and repay the cost of this work over time through energy bill savings, rather than having to spend large sums of money up-front.
As well as reducing carbon emissions and household energy costs, this Green Deal will support a “Green Recovery”. It will drive the creation of more green jobs, alongside clear quality standards and help green industries and expertise in this country grow.
Subject to detail and any necessary legislation, further measures may include:
- Energy market reform to secure our energy supplies and shift to low carbon sources. This is in addition to our work with Ofgem to develop a security guarantee for our energy supplies.
- The introduction of an Emissions Performance Standard to regulate the emissions from coal-fired power stations.
- A requirement for energy companies to provide more information on energy bills, empowering customers to make the right, green energy choices for them - including information on the cheapest tariff available and useful comparisons of energy usage.
- And, finally, a framework for the development of a smart grid to revolutionise the management of supply and demand for electricity in Britain’s low carbon future.
My Lords, some have queried why there was nothing in the Gracious Address on nuclear power. Quite simply, there is no need for a new Bill in order to bring forward new nuclear.
This Government is committed to allowing the construction of new nuclear power stations provided they receive no public subsidy.
And through the Office for Nuclear Development, we will continue to drive forward the actions needed to remove unnecessary obstacles to the deployment of nuclear power. This includes the completion of the draft Nuclear National Policy Statement to be tabled in Parliament.
My Lords, also central to our low carbon future is the creation of a modern, sustainable transport system for Britain.
We have already made clear that we do not support the construction of a third runway at Heathrow, or any plans for new runways at Stansted and Gatwick. We want to make Heathrow better not bigger and boost the performance of our airports for the people that use them.
Improving the framework for airport economic regulation is vital to this. And we will reform existing arrangements for setting price caps at airports to establish a more flexible framework focused around passengers.
In addition, we are committed to establishing a high speed rail network. Our vision is for a truly national network linking our major cities and including links to Heathrow and potentially other airports. In this way, high speed rail could provide an attractive alternative for journeys which might otherwise be served by short-haul aviation.
In due course, we propose to seek powers to deliver the first phase of that network through a hybrid Bill later in this Parliament.
But substantial work is needed ahead of this, and we will continue to develop our proposals. This includes carrying out a full and open public consultation with those who may be affected by any high speed line.
Digital & Communications
My Lords, every day new technologies are revolutionising how businesses connect with their customers and people communicate.
Unsurprisingly, this has had a radical impact on the business of the Royal Mail. The Postal Services Bill will seek to tackle the fundamental and longstanding problems facing this organisation in a modern communications environment.
It will aim to enable the Royal Mail to benefit from private sector disciplines and capital, including possible opportunities for employee ownership, ensure the continued provision of a universal postal service and will safeguard the future of the Post Office Network.
Also, as other countries roll out next generation high-speed broadband, the Government will be looking at ways to enable a strong, market led approach to its deployment in this country. Ensuring that people and communities in rural, as well as urban areas can benefit from this technology and businesses across the country can compete.
My Lords - just as any family or successful business knows they are taking a big risk on their future with too much debt - Britain cannot build its recovery without urgent action to reduce the deficit, increase market confidence and restore balanced, sustainable growth to our economy.
The gracious speech sets out and supports our Government’s measures to make that happen and sends a strong message that Britain is open for business.
We will have the talent, the technology and the tolerance to take our country forward. We will remove the over-restrictive ties that presently bind us; protect the vulnerable; and revel in the freedom that our unwritten constitution has given us - which has allowed this exciting journey to new politics that our people have faith in us to begin.
I look forward to our debate on these important issues.