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Address in Reply to Her Majesty's Most Gracious Speech

My Lords, I was going to make the point that I failed to hear what the noble Baroness's bet was to be, and I thought that that reflected her prudence as an accountant. I should be very interested to hear what the nature of the bet would be in the future. In answer to a question about a further Finance Bill, we shall be introducing such a Bill in the House of Commons shortly. I very much welcomed the comments of the noble Lord, Lord Newby, on economic immigration. He was right to say how important it is for economic growth. However, I am not so certain that I agree with his comments about RDAs and freedom and flexibility. In this country we have to learn that in situations of devolution or delegation of responsibilities, those need to be managed within a national framework. One needs to set some parameters from the centre; otherwise, every area will go off and have its own schemes and so on, whether it is in the field of business support or in the skills and learning arena. From the point of view of businesses which now operate on a national level, that can be extremely difficult and will simply return us to the situation that we had five years ago with hundreds of different schemes. So we need to manage this issue with delegated responsibilities within a national framework. I am not certain that the right reverend Prelate the Bishop of Worcester was fair to say that the Minister had not dealt with matters of importance for many poor people. He went on to talk about consumer debt, and the Minister had just talked about the introduction of the Consumer Credit Bill, which has, as one of its primary purposes, protecting vulnerable borrowers. It should also be said that economic stability is extremely relevant for the most disadvantaged people. It has enabled the introduction of significant expenditure programmes which are focused on the most disadvantaged. I say to my noble friend Lady Thornton that consultation is fundamental to our deregulation agenda. We shall continue to support social enterprise, as we did in the previous Parliament. The Government published a White Paper on the companies Bill on 12 March, and time remains for all parties to respond to the consultation. I say to the noble Baroness, Lady O'Cathain, that I do not think it is right to ask the Queen to go into complex economic forecasts in her gracious Speech. Inevitably there will be a few—I hope, succinct—phrases about the economic policies of government rather than a description of the public finances. I should point out that the Minister anticipated many of the issues that we shall need to watch. To me, that does not suggest complacency. Again, I remind the noble Baroness that the Consumer Credit Bill is being introduced to help to deal with the whole problem of debt. Consumer growth is slowing but the economy is in the process of rebalancing, with business investment and exports beginning to contribute more to growth. Also, retail sales contribute only a third of consumer spending. We totally agree with the right reverend Prelate the Bishop of Liverpool that we should strive continuously to encourage more entrepreneurs to set up in disadvantaged regions. However, it is wrong to suggest that industries are concerned only with producing products and services with less labour. The use of fewer resources and materials is also often now a key consideration for business and a considerable amount of research is now being dedicated to this issue. I thought that the speech of the noble Lord, Lord Marlesford, was excellent. It showed the true independence of the House of Lords. His suggestions for raising further revenue also showed great independence, and I shall watch with interest whether the Conservative Party takes them up as official policy. The noble Viscount, Lord Trenchard, repeated a point made by the noble Baroness, Lady O'Cathain—that is, that roughly a quarter of the 51 quarters of continuous growth took place under the previous government. I make the point that it is not too difficult to get growth growing; the difficult task is to keep it going. That point was demonstrated again and again by the Conservative government when they were in power. It is easy to get the growth going; to keep it going for 52 quarters is a substantial achievement. I do not want to get into complex tax discussions at this hour of the evening. I simply point out that the so-called stealth tax on the pension funds was in fact a reduction in advance corporation tax. The Conservative Party had also reduced that tax, and general opinion was that it was a very bad way to run one's tax system. It was also compensated for by lower corporate tax. I am very clear about this matter because, having been a finance director for many years, I am well aware of how advance corporation tax works. That is what it was about. The measure obviously has an effect on pension funds but one must also take into account that businesses come out of it better because of the lower corporation tax, with the result that they could put more into their pension funds. It is wrong to say that the problems of the pension industry are due solely to that issue and to ignore what we all know took place over that period—that is, pension holidays were taken by pension funds. Having been involved in business myself during that period, I look back with horror at the fact that businesses, including my own, took pension holidays. One could argue the case for those, but account had not been taken of the fact that there would be periods going the other way, and the benefits in the pension funds should have been kept there to be used subsequently. That issue should not be forgotten. The noble Baroness, Lady Miller of Chilthorne Domer, raised the question of the regulation of supermarkets. Over my seven years as a Minister, I have learnt that I am not in a position to give an objective view on the regulation of supermarkets, and I shall ask the relevant DTI Minister to write to the noble Baroness in response to those points. I very much enjoyed the speech of the noble Lord, Lord Selsdon, on space and many other issues. I totally agree with him that this is an enormous area of science, as demonstrated by the Cassini-Huygens mission and by the Galileo project, which is enormously important from a commercial point of view. I am afraid that the DTI civil servants are still searching for our briefing on Copernicus, so I did not feel that it was right to ask them to provide a quotation about gravitational waves, but no doubt on another occasion we can take up that issue. The noble Lord, Lord Vallance, raised the issue of Europe, which is a large subject. It is fair to say that the European Commission and the member states are beginning to focus on deregulation. Interestingly, at a recent Council meeting, Commissioner Verheugen of the enterprise side, said that he wanted to be judged on his performance on deregulation. Whether he can deliver on that is another matter, but I believe that the Commission is becoming focused on this issue and that the UK has played a leading role in putting that at the top of the European agenda. I agree with the noble Lord, Lord Harrison, that there are huge opportunities in Europe, in areas such as energy, liberalisation and the services directive. To the noble Lord, Lord Inglewood, I say that I do not believe it is correct to say that the north has lacked attention in economic terms from this Government. I believe that the regional development agencies in the north-east and the north-west, and particularly their science and industry councils, are carrying out an extremely good job in trying to raise economic performance, not by moving jobs in, but by creating the right and best conditions within the regions. It is a mystery to me why the Conservative Party, with its focus on regional policy, continues to talk about getting rid of the regional development agencies, because that is a mechanism to create growth and change within a regional economy. I am unable to give an answer on single farm payment systems at the moment. I shall write to noble Lords on that. During our presidency we shall be pushing the Lisbon agenda very hard. I join the noble Lord, Lord Sawyer, in congratulating the management and the unions on their transformation of the Royal Mail. In case there is any doubt, I make it absolutely clear that privatisation of the Royal Mail is not on the Government's agenda. There are no plans to dispose of the Government's shareholding in the Royal Mail. However, we cannot control what the newspapers say in a speculative manner on such issues. I agree with my noble friend Lord Tomlinson that I was not greatly enthused by the proposal to call the DTI the Department of Productivity, Energy and Industry. Besides the obvious abbreviation of that name, the fact that industry and productivity are portrayed as two different concepts appears to be stating the problem rather than the solution. However, I am glad to say that the first action of our new Secretary of State was to get rid of the name. It was even suggested to me that Downing Street had set this up to make him look good on his first day at the department. The noble Lord, Lord Razzall, said that we have had a very benign environment for the economy. I do not believe that that is totally fair. While in government we have had the Asian crisis, when Korea nearly went bankrupt; we have had the Russian crisis; we then had the IT crisis, followed by problems at the Stock Exchange; and then the US downturn spread across Europe and Japan with world trade growth stalling for the first time for decades at zero. So it has not been a totally benign environment, although some matters have gone our way. The marked comments of the noble Lord, Lord Razzall, about the DTI simply illustrated how little the Liberal Democrats know about the actual work of the DTI. We have clearly set out our objectives in our five-year plan and we can be measured against them. It was revealing that he admitted that essentially the Liberal Democrats' plan was not to get rid of the activities of the DTI—one cannot do that as most of them are matters that have to be carried out, whether in relation to the Patent Office or company law or employment tribunals—but it was simply concerned with moving things to other parts of government. Of course, there is nothing wrong with that, but then to claim major savings is to misunderstand the situation. The noble Baroness, Lady Miller of Hendon, mentioned the figure of £40 billion as the cost of regulation. Of course, that is not the cost of regulation, but it is the cost of doing what regulation requires, like the national minimum wage or longer holidays. The administration part of that is very small. If one wants to say, "We shall save that £40 billion", then one must say what one will put in reverse. Will one go back on the national minimum wage or on the issue of length of holidays? My noble friend Lord Haskel made a number of points. We have only just introduced the Sciencewise programme, but I am encouraged by the response we have received to that. I agree with much of what my noble friend Lord Bhattacharyya said about the importance of technical change and the need to link engineering and technology with science. As someone who has an MBA, I entirely agree that having an MBA is no substitute for understanding the customers and technology of the business in which one works. On the company law reform Bill, I say to my noble friend Lord Wedderburn that we have published a paper.