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Queen’s Speech

My Lords, once again I shall start by reminding your Lordships of my primary career years having been spent with Lloyds Bank and the Ford Motor Company, both of which I shall mention. Martin Johnson, in his great days as the England rugby captain, would say that you cannot do rugby without the ball. I should like to say particularly to the noble Lord, Lord Myners, that you cannot do economic recovery without the GDP. The debate today began with an exchange about the merits of growth, but growth comes in several different forms, and not only through the expensive creation of new business and a long, slow attritional rebuild. It also comes from reactivating those businesses that have worked successfully in the past and generated the fiscal streams on which we have depended but which are now in a state of limbo. It is still a matter of great concern as to how they are to be reactivated. Where are we on this today? My noble friend Lord Northbrook said how unachievable four percentage points of growth will be next year. I can suggest to the noble Lord, Lord Myners, where he might find that two of those percentage points are quite easily accessible. They are sitting in piles of files in the Blackfriars Bridge Road. I am mandated by Lloyds Bank to extend an invitation to the noble Lord to spend some time looking at those cases and talking about what is involved in getting them back into mainstream revenue generation for the fiscal economy. I think that he would find it extremely interesting to spend a morning down there, and the invitation comes without any obligation. He is not expected to negotiate better pensions for these people because that is not on their agenda. They are not highly paid, but individuals at the lower end of the management scale and not part of the bonus culture of the bank. At present, however, they are hugely demotivated and extremely depressed. They feel that they are getting all the odium of being bank employees at a time when banks are hated while they are bearing the entire burden of trying to put right the 2,400 cases that are festering away in the files in the Blackfriars Bridge Road. The noble Lord would find surprises among those files, some of them good and some bad. First, however, I should like to establish a clear understanding from the noble Lord. Has he restored the London rules? Lloyds Bank thinks he has. It says that the Bank of England is now fully set up and effectively operating London rules again. That would be very good news indeed, but can we please have it confirmed? If, as I suspect, it is an unofficial initiative by the Bank of England, while it is still to be welcomed, could it please now be put formally in place so that it can go forward to the benefit of all banks because it is doing a great deal of good? Thank goodness it has not been put with the Fallen Soundly Asleep agency, other known as the FSA, which is where I feared it was going to go in the first place. It should stay with the Bank of England because it knows what to do with it. Let me explain what is happening with the actions that have been taken in the belief that the London rules are back. First, we are beginning to see an orderly flow and continuity of bank facilities to supply the working capital necessary to reactivate businesses, and that is good. Let us take the example of the present position of the Ford Motor Company. Recently it announced a 10 per cent reduction in the Ford of Europe output of motor cars for this year, which is substantially dependent on Britain, and that it represents a shortfall of 1.5 million units. Imagine how much GDP could be generated by paying employees for their production and bringing them back into profitable sale. At present there is a shortage of vehicles in the marketplace, not a surplus. Why is there a shortage? It is because the five key component suppliers dependent on the aluminium world were not given the loans with which they would have been able to buy the £1,200 per ingot aluminium on which they depend. Now that the loans have begun to come through, Ford is able to get the engines that match the fact that the market is moving massively towards diesel. The supply is therefore beginning to unlock. All this is part of the recovery programme and should be regarded as good news. On the other hand, bad things are going on at the moment, but first, another good point. Bearing in mind that the businesses in the Lloyds recovery unit are separated into generic groups of activity, the Minister will be surprised at the robust survivability of the house building community. The reason for this is interesting and perhaps teaches a lesson for the future. The community had a contingency plan to cope with a major slump that effectively involved a mutualisation of land banks and financing operations under single overall control. That has allowed the community to survive, ultimately to the benefit of house prices in the UK. Indeed, it is excellent and it should be so. Beyond that, however, we have to look at what is happening in the retail market, where there is a serious problem. If you look at an empty shop on the high street, you see a shuttered shop front. But it should be seen as being the young people who worked there now unemployed, the people who made the products sold in the shop now unemployed, and the people who bought the shop in the first place now unable to service their debt. Everyone has lost. If we have empty high streets, we will be in a completely disastrous situation because that will drain the vitality of communities that depend on their shopping centres. I suggest that the Government should be looking to reactivate something along the old lines of 3i as an in-house investment programme that would be able to fund some of these businesses so that they can be reborn and contribute to positive trading activity. It should not be above the pride of the Government to go to one of our superstar retail operators, one of the big names, and invite them to cherry pick what they need from the vast portfolio of fragments of bust retail businesses sitting in the Blackfriars Bridge Road. There are the brands, the shops, the prime locations and the production behind them. Nothing would put more back at a single stroke into the economy. We cannot come out of this crisis with empty high streets. There will no vitality in society if we do so. This is the most urgent problem that the Government should be looking to do at the present time. I hope that the noble Lord will come down because there is so much to see and to learn about what needs to be done. The other good news from Lloyds is that it has listened to a piece of advice that originated on these Benches. It has taken the entire Scottish loan book and sent it to Edinburgh, and very good that is too. Again, the Minister should be going to the Charlotte Square investment community and say to its members, "Look, you funded these businesses into the problems they are in, now you fund them out again". This would be of huge benefit to the Scottish community, and it would be a Scottish solution to a Scottish problem. It should be done.