Queen's Speech — Debate (5th Day)

Part of the debate – in the House of Lords at 10:07 pm on 16 May 2012.

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Photo of Lord Bates Lord Bates Conservative 10:07, 16 May 2012

My Lords, I rise to attempt to give an optimistic speech, in the present environment, on the economy. In doing so, I feel a little bit like my comic hero and fellow north-easterner, Rowan Atkinson. He used to do a sketch where he came on stage dressed in a track suit and would play the part of a Geordie football manager. He would walk on clasping a football and, looking at the assembled dejected faces in his dressing room, would say, "37-0-but don't worry, lads, we've got everything to play for in the second half. But before we do that, we have got to get back to some basics". Holding up the ball he would say, "Kev, what's this? And where's it meant to go?". The answer was, "The goal". Then Rowan Atkinson, the Geordie football manager, would say, "But whose goal?". That experience of trying to get back to the basics of what we are about seems pretty fundamental.

In that element of grasping for the basics, I thought about what we should be saying about the economy. What is the role of government in the present environment? There are four points on which I want to focus. First, we need to be quite frank about the limits of government. What can we actually do?

The amendment presented to this debate refers to,

"the failure of Your Majesty's Government properly to address economic recovery".

Yet, on looking at the gracious Speech, the whole first page is packed full of references. It states that,

"my Government's legislative programme will focus on economic growth".

The next sentence refers to measures to "restore economic stability". That is followed by references,

"to reduce burdens on business .... to promote enterprise ... to establish a Green Investment Bank", for fair energy markets, and so on.

There is a profound misunderstanding in some parts of the House as to the role of government. We hear a clarion cry for there to be a greater increase in public expenditure. What do they think is going on? We inherited a situation in 2010 when public expenditure was £669 billion; the figure last year was £730 billion in absolute terms, and it will go on rising year on year for as far as the forecasts go out. Added to that, they speak almost as if were having a slash and burn austerity drive whereby we reduce every penny of borrowing. Yet we inherited a deficit and a level of government borrowing which was just a shade over £1 trillion and over the next four years we will not repay one penny of that. In fact, we will add 40% to that Bill, which people will have to address in future generations. So the notion that somehow this Government are embarking on some one-sided approach to attempt to lift us out of this present situation is fanciful and misleading. It discourages the many people in this country who are working hard in public service jobs and who fail to understand that the Government are taking their position very seriously and value the contribution that they make to the economy. We are taking a balanced approach between different types of investment and efficiency savings in other parts, as we should.

The point that we need to realise is that Governments do not create jobs. They create the environment in which jobs can be created by entrepreneurs and businesses and their employees. That is what we are trying to do, just as in an Olympic year our responsibility is to put on the Games to make sure that they are safe and secure and that the rules and infrastructure are in place. But the real show is what the individual athletes and Olympians actually do with that opportunity, and that requires some encouragement and inspiration. So telling things as they are in terms of what is actually happening in the economy and what the Government are actually doing, which is being passionate about economic growth and trying to delicately lift ourselves out of the situation, is something that is very important to communicate.

There is quite a big trend at present in banker-bashing and attacking the City of London in every way. Banks played a major part in getting us into this problem by irresponsible lending, but Governments undertook irresponsible borrowing and consumers undertook irresponsible borrowing. In that sense, we all have a part in this. Bankers may have got us into this problem, but they must also be the people who help us get out of this problem, so we have to look to restoring health in that environment.

Then there is the importance of Europe. We sometimes sit on the sidelines and look smugly at what is happening there, without realising that it is our biggest customer. Two-thirds of our exports go to Europe. No wonder that the Foreign Secretary, speaking today, said:

"No single event would provide a bigger boost to the British economy in the short term than the resolution of the eurozone crisis".

It is absolutely fundamental to our success that we see Europe advance.

Over the past year, having travelled extensively through Europe, I have had the opportunity to meet on many occasions the diplomats and officials who are out there selling Britain. They are absolutely passionate about selling Britain; UKTI does an outstanding job. I have seen the passion that they have for the greatness of this country and our educational institutions and businesses. This is a fantastic country; it is a competitive international country; it is the sixth-largest country in the world. When the Chinese are looking to place their Renminbi fund somewhere in the world-and they have the choice of everywhere-they have come to the City of London. When the Japanese want to develop a new motor vehicle, they come to Sunderland and the north-east. That is something that we ought to be proud of. Therefore, I urge noble Lords and my noble friends to remember that and get out there and sell what this country is doing, recognising that the Government are doing as much as they can.