Following the King’s Speech on 17 July, the House of Lords has five or six days of debate on the new government’s proposals – each day looking at different elements. As I lead for the Lords Spiritual on foreign affairs, I would like to have spoken on Thursday or, today, on constitutional matters. However, I cold only be here yesterday and today, but back in Leeds this evening. The rule with listed debates is that you can only speak if you are in the chamber for the opening and closing of the debate. I can’t stay until the end today, so had to speak on the economy yesterday instead. Last night we finished at 11pm.
I prepared a speech (and was number 5 out of 80 speakers), but, having listened to the opening speeches, decided to scrap it and approach it differently. This was probably a mistake. So, in case it interests anyone, I post below the speech I actually gave in the chamber, followed by the speech I prepared.
The speech I gave (Hansard)
My Lords, I am not an economist, but I care deeply about the economy. I shall limit myself to a couple of observations, and I am sure that I can save a few minutes in the length of the debate.
First, I welcome the Minister and thank him for his illuminating and articulate speech. I admire the new Government’s ambitions, but I worry a bit that there is too much. Holding all this together in a coherent development framework will be challenging beyond words, but I wish the Government well in doing it.
I want to plead for honesty from the Government and a good communication strategy to explain to the rest of us in the country who are not economists how all this is going to be rolled out. When it fails—elements will fail for a host of reasons, not usually intentional—the Government must trust the electorate and tell us the truth. When timelines do not work and get delayed, trust us and tell us the truth so that we know what is going on. We need to be treated like adults. I understand the need to adhere to the fiscal rules, but the Government choose what those rules are, so if they have implications for the rest of us, that needs to be explained clearly in language that can be understood by people like me.
What I am glad about in the gracious Speech is that we seem to have a programme that takes long-termism seriously. I hope that can be stayed with during this very ambitious programme, where the immediate will sometimes compromise the longer term. We need long-term thinking. I speak as someone who lives in the north of England and who has to use transport north and south but also east and west. The problems that we have with rail were mentioned earlier. The amount of money that has been invested in London and the south is light years above what has been invested in the north so far. I wonder whether the northern powerhouse is turning into a northern small battery, but that is to be seen.
There are a number of issues in relation to employment that really impact us in the north. Universities—I am familiar with a number in west Yorkshire—are now struggling and making people redundant, because we do not have students coming in from abroad. I know that raises questions about the models for investing in students, but we can talk about creating employment at the same time as we are losing employment in significant areas. One of the factors involved in that is access to good communications, especially rail and road. I came to this House 10 years ago, and I remember saying at the time that only way effectively you can get from east to west and from west to east is along one road, the M62. There is nothing else. What happens to the north-east when the A66 is snowed under, I suspect even in the summer? The rail links are appalling, whatever investment has gone in. I now have to get my PA to book trains north-south to get down here, knowing that if my train is cancelled I can get the one before or the one after and still get here for what I need to be here for. That is terrible in a country like this.
What about the issues we have with water? The failed experiment of the past 40 years, where pockets of individuals have benefited from much of our privatised utilities, needs to be addressed. I read the other day—I cannot remember the numbers—that the CEO and the CFO of Yorkshire Water have received more than £500,000 in bonuses. I work in a business that does not quite understand bonuses, because I do not get a salary, I get a stipend, but I always thought that a bonus was there to reward going beyond what you are employed to do. So why are people getting bonuses for abject failure where the money goes into the pockets of shareholders at the expense of consumers? This is a moral issue as well as an economic issue. I hope that the Government will address this as they go forward.
So I come back to where I began and say that I admire the ambition, but we have to be careful that we do not lose it as we go.
The speech I prepared and ditched
My Lords, whatever our political persuasion, it is clear that we all have an interest in this government’s economic development plans succeeding – especially given the nature of accumulated challenges it has inherited this month. So, I want to use my brief time to put several questions to the new government as it embarks on its ambitious programme of renewal and reconstruction.
The intention to create economic stability in an increasingly volatile political world is welcome. “Every decision will be consistent with its fiscal rules.” This discipline is necessary, but this is a mantra that begs a few questions.
Fiscal rules do not drop down from heaven, but are set by the government of the day. Therefore, it is in the power of the government to change them – or, at least, set out a clear rationale as to why these particular rules have been chosen. Given the extremely challenging nature of the economic and financial choices to be made and the priorities to be set during the next five years, it would be helpful if those of us who are not economists can have such a rationale – with costs, consequences and timelines – explained. The government needs to be honest and realistic and not promise what cannot be delivered. The electorate needs truth and honesty from its government, even when the news is challenging.
The government needs to be clear – and not only in word or slogan – who the economy is for. Is the economy an end in itself or a means to an end – the flourishing of individuals and communities in a complex and diverse society? Do people serve the economy, or does the economy serve people? If I had time, I would illustrate from statements made by the last government that summed up ‘the point of it all’ in purely economic terms.
So, I welcome the proposals in the Gracious Speech to establish a National Wealth Fund, an Economic Strategy Council, a Planning and Infrastructure Bill, and English Devolution. Why? Because they open up the possibility of longer-term thinking that combines principles of subsidiarity with regional collaboration (where competition is inefficient, inappropriate and incompetent to achieve intended goals). The optimising of regional collaboration can only be a good thing, given that people across this country will get a better deal if they are involved in decisions that are shaped to serve their local and regional longer-term best interests.
But, if the assumption is right – that everyone has an interest in a stable, flourishing economy that doesn’t just serve the interests of a few in the shorter-term – then this government must take action to reverse the disastrous experiment of the last forty years which has seen once-public services fill the pockets of private individuals who seem always to benefit from the economic upsides whilst leaving the taxpayer to bale out the downsides. Think the water industry. Think the railways – which you can’t avoid if you try to use them.
This is not an ideological point. How can it be remotely defensible that the CEO and CFO of Yorkshire Water have received bonuses of hundreds of thousands of pounds despite the catastrophe of water pollution, the degradation of services and the imposition of increasing bills for consumers when dividends never seem to suffer? (Not being in a business where the concept of a financial bonus exists, I completely fail to comprehend why a bonus is appropriate in cases of failure. If a bonus means anything, surely it is a merited reward for going beyond the basic requirements of the job for which you are paid – not a reward you get anyway, regardless of performance?) This is a scandal and a running sore in a society that values justice and equity.
Finally, and connected, the government has rightly set out to address the challenges of transport infrastructure. Nationally, rail transport might be sub-optimal at present; but, in the North of England it is disastrous. Getting from South to North, depending on train reliability, can work OK. Getting from East to West is dire. Given that the one longer-term infrastructure plan – HS2 – has been reduced to filling potholes in roads, what is the thinking around building transport infrastructure in the North that will enable the North to build its economy for the future? Will the North get investment commensurate with that which we have seen in London and the South in recent years? Are we stuck with only the M62 or a dreadful rail link? What happened to the Northern Powerhouse – or is it now really a Northern Battery?
I haven’t time to get onto our universities, employment and the stripping out of our Northern towns. The vicious circle of siloed planning needs to be broken if the economy is properly to serve all people. Which, after all, is the point of it all.
