Address in Reply to Her Majesty's Most Gracious Speech

Part of the debate – in the House of Lords at 6:34 pm on 25 June 2001.

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Photo of Lord Brooke of Alverthorpe Lord Brooke of Alverthorpe Labour 6:34, 25 June 2001

My Lords, first, I apologise to the House for my late arrival to the debate. That was caused by problems with Railtrack.

I am grateful for the opportunity to speak in this part of the debate on the gracious Speech. If the Prime Minister had not called a general election on the day that he did, I should have had the privilege, in the following day's Labour debate, to draw the House's attention to the beneficial effects of the Government's policies on the UK economy. It might not have been entirely to the taste of the noble Lord, Lord Blackwell, but I should certainly have been saying that we had built on what had been there before, and that we had built on it very substantially indeed.

I wanted to stress in particular the valuable impact of the Government's policies on helping to reduce the scourge of unemployment. We still have very substantial numbers of unemployed people in this country and that issue needs to be addressed. The Government have also helped to reduce social exclusion and have sought to reduce inequality--scars on our social fabric that had grown over the previous two decades. In my opinion, those are some of the principal defining features between the approach of Labour and the Conservatives over the past few years.

I hope that those will continue to be important objectives for the Labour Government in their second term. Particularly in the light of what the noble Lord, Lord Skidelsky said, I await with interest to see what will be the position of the new leadership within the Conservative Party when it has been determined.

Leaving aside the politics, I should have echoed much of what was said by my noble friend Lord Tomlinson; namely, that there are storm clouds ahead and that notwithstanding what we endeavoured to do in the first term of the government, much remained to be done, and that our success or otherwise would be dependent primarily not only on the Government's continuing successful economic management, a point raised by a number of noble Lords today, but also on the need to improve further, with a significant drive, the country's overall performance through higher productivity. In particular, I should have spoken in favour of the greater use of information technology.

The gracious Speech now gives me the opportunity to make a few brief observations on the latter points. IT and the Net can provide the platform for a substantial increase in our productivity in this country. The Government recognised that when they were elected in 1997 and they made an exceptionally good start, in my opinion, in seeking to identify and support the actions needed to keep the UK in the forefront of the global e-commerce race. The report they produced e-commerce@its.best.uk was generally welcomed and seen as an outstanding document, both here and abroad. There was some good follow-up and the Government have achieved much of which they should be proud since publication.

But, as I regret is so often the case in the UK, it seems that we are now starting to slip behind. In a sense, I fear that there is an admission of that in the Queen's Speech where it states:

"My Government will work with our partners to make sure that Europe has the most competitive knowledge-based economy in the world".

I have not drawn a great deal of comfort from the DTI/Treasury document to which my noble friend Lord Tomlinson referred, which was published last week, about productivity in the UK in so far as it says anything about IT and the Net and its implications and possibilities for productivity in the UK.

The phrase in the gracious Speech gave me the feeling that we are now shifting our focus from "making Britain the best place in the world for e-commerce", as the Prime Minister said previously, to working with partners to ensure that Europe has the most competitive knowledge-based economy in the world.

Perhaps that is a more honest and realistic assessment of what we can achieve than the somewhat over-hyped ambitions of the past. That is fair enough, but it disturbs me. Last year I spent seven months as chairman of Sub-Committee B of our European Union Select Committee looking at the way in which e-commerce is developing. I and other observers are concerned that our competitors within Europe are continually raising their game in this arena. So we need to keep up the pressure.

Even more worrying, in the past two years we have made little progress on some key issues and I believe that the UK is lagging behind some of our competitors, not just on a worldwide basis but also within Europe. In a number of areas a step-change in the Government's efforts is required. Time does not permit me to go into all of them, but I shall mention two where the Government can act.

The first is in their own backyard. They have set targets for the whole of government to be online by 2005. Some other targets have been changed or abandoned since the election, but I seek some reassurance from the Minister that the Government are adhering to that target, although I sense an increasing scepticism about our ability to meet it. I suspect that the recent reorganisation of government departments, while justifiable, will in some respects have created further problems and possible delays for "e-government" planning.

In short, there is a pressing need to re-engineer government around the citizen/business user with new integrated online services, rather than simply taking existing services and putting them online. More investment will be needed for that as well as better assessment of cost-savings of property assets and staffing that would flow from a significant take-up of "e-services". A strong catalyst in that regard would be the opening up of government services to competition, perhaps from the voluntary sector and from the private sector. As I said earlier, these issues fall within the Government's area of control and action and such action is now required.

Finally, I want to speak about the pressing need to get on with building the infrastructure for the new economy and rolling out broadband, with its high speed and "always on" capabilities. The national economies that first achieve pervasive broadband use will gain significant competitive advantages, both through the transformation of existing industries and the creation of new ones. Yet currently the UK is 22nd in the OECD league table of broadband access and poor broadband connectivity in the UK is becoming a factor in mobile investment decisions. At long last BT is rolling out broadband capability and Oftel has improved competition in that area. Indeed, only a few weeks ago my noble friend gave us the programme for the roll-out from BT up to July. I would be grateful if in the future he can update the House on the continuing stages of that programme and whether there is a possibility of it moving at a faster pace.

I do not believe that the roll-out from BT alone will be sufficient to make broadband capability pervasive on the scale required. Investment costs are extremely high and even in a positive investment climate, which is far from the case for the telecom sector, it will not be easy to acquire money from other parts of the private sector. So I contend that if we are serious about productivity in this area there is a case for the Government to undertake an urgent review of where and whether it is possible to intervene to some degree, either directly or in partnership with the private sector, or to explore the prospects for the tax breaks to encourage greater growth of band width.

Offering broadband connections to all SMEs could massively raise productivity. I would not include sole-traders who are not in as much need of it; nor would I include the bigger companies who, from the facts, are doing well and can cope on their own. But the vast bulk of firms that employ people in this country, the small to medium enterprises with from 10 to 500 staff, are desperately in need of access to broadband. Over 95 per cent of our private sector workforce would be covered by such a change and it would provide an unprecedented uplift in performance and productivity.

Perhaps the Minister can say whether it will be possible to hold a further review of the way forward in this area. I suspect the reply will be "No", which is a pity because, as we look around and see what some of our competitors, not on a worldwide basis but within Europe, are doing, we can see that step-changes are being effected in a number of European countries. If noble Lords look at what is happening in Germany, they will see how that country is moving ahead quickly and leaving us far behind.