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Address in Reply to Her Majesty's Most Gracious Speech

Part of the debate – in the House of Lords at 11:35 am on 25th November 2004.

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Photo of Lord Haskel Lord Haskel Labour 11:35 am, 25th November 2004

My Lords, it is my privilege to welcome the right reverend Prelate on behalf of the whole House. This is not the first time that I have heard him speak; I have heard him on the radio. It was not a religious programme, it was on "The Brains Trust", and his warm personality and well informed views came across then, as they have this morning. We should not be surprised. The right reverend Prelate has been exposed to a large variety of faiths. After all, he has been a visiting professor at the Harvard Divinity School, at the Hebrew University in Jerusalem and at the Gregorian University in Rome. If that is not versatility, what is? We thank him for his wise words about volunteering and the value of heritage and look forward to hearing from him many times in future.

The noble Baroness, Lady Noakes, in her introductory speech, spoke about 15 regulations a day. She knows perfectly well—it has been pointed out to her several times in this House—that most of those regulations are about such matters as holes in the road and bus timetables. They are minor administrative matters, which for legal reasons must be put down as regulations. Her figure is misleading; I am pleased to be able to point that out yet one more time.

However, the noble Baroness, Lady Noakes, asked for a government that deliver, and I agree. How will we deliver prosperity and growth when globalisation is moving jobs to India and China, as my noble friend told us in his opening speech; when the new European Union countries have even lower costs than ours and are educating yet more graduates; when we are becoming increasingly dependent on others for energy; and when our commitment to tackling climate change puts us at a disadvantage to those with less commitment than us? We can neither prevent nor shut out globalisation, rising standards, climate change and gas and oil depletion. We must respond by lifting our economy through enterprise and technology, by lifting our productivity through skills and innovation, and by lifting the added value of our products and services.

How do we achieve that? What are the practical issues about which the noble Baroness spoke? There are three main elements: trade in Europe, innovation through technology and science, and skills and enterprise. Getting these three elements right is the key to prosperity and the international competitiveness of our economy. Europe is our link with prosperity, simply because it is a market of 455 million customers. If we can liberalise and win in that market, the potential is enormous; then the rest of the world is our oyster. Thanks to the Lisbon agreement, there is a general wish to achieve that, but progress is patchy.

The House of Lords European Union Select Committee recently reported that if the gas market in the European Union were liberalised, the supply would be more certain and the price less volatile. That applies to not only energy but many other services and products. Liberalisation puts the customer first and creates proper competition. Competition forces existing firms to get their products and services right for people, and if they do not, new firms come into the market. Economists estimate that that process accounts for nearly half of the improvements in productivity. In addition, more liberalisation means less regulation, which itself stimulates greater productivity.

Thankfully, we are not alone in recognising the need for that. In a review of the Lisbon process last month, conducted by Mr Wim Kok, he suggested that there should be a league table of member states to name and shame countries delaying liberalisation. Chancellor Schroeder argued that the emphasis now should be on accelerating domestic reform in each member state. So we are not alone in recognising the link between liberalisation and prosperity. I hope that Tory dogma about the European Union will not stand in the way of those developments, which are being championed by the DTI, promoting trade.

On technology and scientific research, our already strong bases have been given a tremendous boost by the Chancellor's 10-year framework. There is a commitment to develop publicly funded science, at least in line with the trend growth rate of the economy—about 2.75 per cent in real terms. There is a goal to spend 2.5 per cent of our GDP on research. That framework has been welcomed by the entire science and research community: business, universities, charities and independent laboratories. The key concern for those organisations is whether the new programme would survive a change in government. Long-term stability is essential. Science and technology are a long-term business, so I hope that in their winding-up speech in this debate, noble Lords opposite will take this opportunity of confirming their commitment to the framework. Business would welcome a progressive consensus that will encourage the private sector to invest and participate in the framework.

The Minister spoke about science and the DTI. Some, in welcoming the framework, have observed that as a country we have not always been good at getting science out of the laboratory and into products and services. Consequently, one of the elements of the scheme is to strengthen and speed up the knowledge and information networks which carry new science to business and bring back to our laboratories the scientific needs of business. Those knowledge and information networks receive initial funding and encouragement from the DTI. Indeed, I am proud to declare an interest as the chairman of TechniTex, one such network. In this way we are committed to speeding up this whole process of innovation by transforming science and ideas into new services and products and thereby creating more jobs and prosperity for Britain.

This brings me to the third area where we must ensure our future prosperity: skills and enterprise. Instead of taking enterprise for granted, we now reward it and put few hurdles in its way. The OECD regularly puts us at the top of the league table for ease of starting businesses in Europe. We also take a much broader view of enterprise; it operates in the public and private sectors. Social enterprises now run some of our local public services. Indeed, the DTI has prepared legislation for a community-interest company, which is specifically designed for social enterprises that want to use their profits and assets for the public good. Not only are there special funds to help start social enterprises but also special skills and training are available.

The Minister spoke about skills. Skills training throughout business and industry, especially in the service sector, has come to mean much more than just plain ability; it has come to mean employability. That means that people can work more effectively in a knowledge economy and be enterprising in their own jobs and work. Employability enables people to get the best paid job for which they are capable. That is the best insurance against poverty. The good news is that more people are at work than in the past 30 years; the bad news is that there are still many unemployed because they lack the skills, and there are fewer and fewer jobs for the unskilled. Ensuring decent standards in the workplace and flexibility in the labour market means that we will use our human capital to the best effect. I welcome the efforts of the DTI to bring these benefits to all in our community: minorities, women and even those on disability allowance who still want to work.

Noble Lords will have noticed that all these tasks—trade in Europe, technology and science, innovation, skills and enterprise—are centred on the DTI. Employers understand that. Digby Jones, of the CBI, asked that the DTI should have the resources that it needs to do the job. He said:

"We must not lose services that are critical to business competitiveness".

I agree. He also realises that the DTI speaks up for British business against excessive or unnecessary regulation by the European Commission.

But what do noble Lords opposite want to do? The Liberal Democrats want to abolish the DTI and devolve its work to other departments. We all know what the result of that would be. Within months, business and industry would be clamouring for a one-stop shop and for it to be brought back. Business does not split up different elements in that way; it keeps them together so that they can work as a team, and so should government. So I hope that when winding up the Liberal Democrat spokesman will say that they are reconsidering that policy.

The Tories want to impose cuts on the DTI. I hope that their spokesman when winding up will say what those cuts will be and give an undertaking that the work I have outlined, which is so crucial to our prosperity, will not be cut.

Those policies for the DTI to shut up shop are small minded and inward looking. A more broad-minded outward-looking change would be to devolve some of these responsibilities for those activities to the regions. Indeed, that is beginning to happen. In that way, the RDAs can carry out their essential work for our future prosperity in ways which suit their local conditions. This devolution will widen success beyond our more prosperous regions.

That is how I think that we should face up to global competition and create the growth and prosperity mentioned in the Queen's Speech. I hope that my noble friend the Minister will agree.