Queen's Speech — Debate (3rd Day)

Part of the debate – in the House of Lords at 5:30 pm on 8th December 2008.

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Photo of Lord Haskel Lord Haskel Labour 5:30 pm, 8th December 2008

My Lords, the starting place for today's debate must be the financial and industrial crisis about which many noble Lords have spoken. All that I can say is thank goodness we have a Government who quickly came to grips with the crisis and acted, instead of just resorting to what I can only describe as uncaring sloganeering from the sidelines. However, while acting, the Government must have an eye to the future. This is what the gracious Speech tried to do, because a necessary part of leadership in a crisis is to present a picture of the future—a picture of what things will look like after the crisis. The right reverend Prelate said that it was not going to be the same, and he is right.

One thing that we will have to tell people is that although skills training must and will continue, as the Minister explained, the plum jobs will be much harder to come by. He spoke of alternatives. Many more people may well have to start things for themselves. The Government are right to do more to finance start-ups and early-stage businesses. Social and community development finance is helping, too. The noble Lord, Lord Bilimoria, who I am sorry is not in his place, paints too dark a picture, because tax rates are not the main concern of people who are starting up or running a small business. There is nothing wrong in doing something which you find interesting and absorbing but is low paid, especially when security is less important because you are young or have no dependants. You may find this in the expanding social enterprise sector, in crossover with charities or in the world of the internet, which requires little or no start-up capital yet is producing a growing number of businesses. Two-thirds of home workers are self-employed. Home working is bound to grow, partly because of the low overheads and partly because of the reduced carbon footprint.

We all agree that much of this new kind of work will come from the Climate Change Act—and that is right—but that needs to be spelt out a bit more. Yes, there are high-tech solutions like nuclear power stations and carbon capture, but at the same time there is a lot of low-tech work to be done, such as insulating homes and offices, sorting waste so that it can be used and recycled, or so that it can become a source of energy, not just rubbish. As the power or energy components of products become critical and more expensive, the paradigm of "reduce, reuse and recycle" is catching on and is leading to new types of manufacturing. Caterpillar equipment is being made in Gloucestershire by a combination of reusing parts from old machines together with new components. Disassembly and reassembly will lead to different economics in manufacturing and a new kind of manufacturing job here.

It was the leader of the Opposition who spoke about balance when he addressed the CBI last month. He said:

"We must never again let our economy become so dependent on such a small number of industries and markets like finance and housing".

The Prime Minister and the Secretary of State spoke about developing strategies to help compensate for the shrinkage in financial services. I agree.

Much of this rebalancing will come from the Government's encouragement of science and technology—encouragement that they have given ever since they came to power in 1997. As my noble friend Lord Rooker reminded us, a lot of thought, effort and research has gone into what new challenges society will face and how technology can deal with them. Our Foresight programmes have imagined the future. Our research councils and universities have researched this. The Technology Strategy Board is driving business to put this into practice in many areas—in energy, buildings, transport, medicine and healthcare, the creative industries and in high-value services. I hope that by the time this crisis is over we will have finally broken down the attitude that has created an artificial barrier between manufacturing and services, which has done much to hinder our economy. Millions of pounds are being spent on this every day, not to retain the past, but to create the future—a balanced future. As well as telling us how much is being spent on rescuing the banks, I hope that the Government, with equal frankness, will tell us how much is being spent on building our future.

One may say, "What about businesses? Will they do their part?". I have every confidence that they will, because, as my noble friend Lord Bhattacharyya reminded us, research shows that companies that stick to their R&D as recession bites and sales drop enhance their position against their competitors, because when the upturn comes they have better products and services.

I hope that my noble friend can confirm that this work will continue. The 44 science training centres announced last week are a good sign that it will. Particularly to my noble friend Lord Rooker, I should declare an interest as president of perhaps the largest knowledge transfer network, Materials UK, which brings together many of the things that I have mentioned. As he indicated, we are all interconnected now. After this crisis, business management will become flatter and leaner; so will government—it always does after a recession. Flatter and leaner means that the important things that we do are the things that we do with others. This means using other people's technology as well as other people's money. The beneficiaries of new technologies are not just those who invent them; the main beneficiaries are those who use them to challenge the old technologies. This will have to be reflected in the new relationship between business and government.

I suggest one simple way in which this relationship can be improved: change the basis of consultation. In recent years, a certain cynicism has entered into this relationship on both sides. Business has used consultation for lobbying and the Government have viewed this as corporate self-interest. True consultation is important, because policy emerges at great speed, and sensible policy that works is everyone's goal. However, consultation largely involves organisations which are set up to carry it out and lobby for their interests at the same time. This is what gives rise to the cynicism. Perhaps the current dialogue points to another way, because individuals must contribute to consultation. Their professionalism, expertise and passion for their industry need to be heard. Cannot this consultation take place in other ways, such as making people's views available on videos to us all on a special website? This is what our children do, and maybe we can learn from them. I know that this will mean more work for the Government, but we will all have to work harder to make the new relationships work and to make markets work better.

To secure this future, we must have a picture of what our economy and society will look like. Interdependence will be a large part of it, much larger than now, and we must prepare for it.