Economy: Government Policies — Debate

Part of the debate – in the House of Lords at 2:26 pm on 24th March 2011.

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Photo of Lord Empey Lord Empey UUP 2:26 pm, 24th March 2011

My Lords, I apologise for some unavoidable absences during the debate. I, too, congratulate the noble Lord, Lord Lawson, on bringing this subject forward because I am a new Member of this place. The issues that have been debated over the past couple of months since I joined the House, such as the AV referendum proposal, fixed-term Parliaments, the Public Bodies Bill and the European Union proposals, are all matters of considerable constitutional importance and therefore of great interest to me and, no doubt, to your Lordships. However, it cannot be said of the people on the streets of Glasgow, Manchester, Cardiff or Belfast that they talk of little else. On the other hand, this debate goes to the heart of what really does matter to the people on those streets as they wrestle with rising food and fuel costs, rising unemployment and, almost as bad, the threat of unemployment, along with increased borrowing costs and now the prospect of significant inflation. These are the things that people are talking about around the breakfast and the dinner table and at work. I am therefore glad that we are addressing these issues today.

This situation has not come about overnight. It has happened as a result of over-ambition, with previous Governments perhaps believing that we could spend our way to a better economic future based on financial and other services. It has long been believed that future jobs would come largely from the service sector, particularly the financial services sector. While of course we all value those jobs, there was a bias in Government against manufacturing. A view was held that it was old hat, "Never mind about smelly businesses and people getting their hands dirty. We'll concentrate on financial services, on derivatives and insurance". Important as those things are, there has to be a solid manufacturing base to create the wealth that we as Governments and Parliaments want to spend.

What a difference two years has made to our perception of where we should be going. Today, manufacturing is thankfully enjoying something of a revival, fuelled in part by lower exchange rates. Land-based businesses and food production have also held steady in this uncertain world of rising commodity costs. In short, there is no substitute for a significant manufacturing sector in order to generate the wealth to pay for our public services. We must pay more attention to this sector and hold it in higher esteem.

I turn to the other point I wish to make. There is an element of snobbery in this country that seems to value those seeking a career in the manufacturing sector rather less than those who choose a career in the professions. That pervades our education system at virtually all levels and must be discouraged. The Government can give a lead here and set the tone.

In recent days, as we have seen, our Armed Forces are in harm's way yet again. Many noble Lords have been calling for a rethink of the recent defence review. That is entirely understandable. However, the principal reason for the review, apart from strategic issues, was lack of cash. That cash can come only from the wealth creators in this country, who generate the taxes needed to pay for our military assets. Like many in this House, I would like to see an aircraft carrier with aircraft that can fly from it, able to project power in a dangerous situation and protect our national interests. Who would not? However, that will not happen unless we get our economic policies right. I wish the Chancellor well in his endeavours to cure our country's problems. We will all benefit if he succeeds.

I want to mention two things that previous speakers said. The noble Lord, Lord Renton, mentioned apprenticeships, and the noble Baroness, Lady Stedman-Scott, in her maiden speech mentioned dealing with people in the harder-to-reach areas of the labour market. We have been pushing perhaps too many people towards university and higher education, and perhaps not enough towards apprenticeships, learning trades and learning skills that can keep our businesses going. We also need that; we need a balanced economy. The noble Lord, Lord Renton, mentioned internships, which are an excellent idea. Many graduates languish on the unemployment register, stack shelves in supermarkets or do whatever they can do, and maybe there are opportunities here to introduce them to work and give them a chance.

The noble Lord, Lord Bates, made the point that the public sector in his region now accounted for 70 per cent of the economy. I can reflect on that from my region, where we are in exactly the same position. The right approach is to say not that the public sector is too big, but that the private sector is too small. Will we be able in this country to revive the concept of entrepreneurship and treat it with the esteem that it deserves? The Government can take a lead here. That would encourage people to believe that there is a future outside the accountant's office or the law practice, valuable as they are.

The noble Lord, Lord Sugar, gave us all a lesson earlier on what it means to be confronted with the reality of seeking funds to get started in business. You have to have an idea, some back-up and the will to succeed. As a nation, we need to raise the esteem in which we hold people who carry out this function in our economy, otherwise there will be no taxes for any of us to spend.