My Lords, first, I congratulate my noble friend Lord Haskel on securing this debate. After his recent illness, it is wonderful to see him back in his place, giving them hell as usual. The noble Lord is my mentor in your Lordships’ House. Whenever I need advice, and often when I do not, he has been there to guide me and give me the benefits of his huge experience and wisdom. I thank him most sincerely.
Noble Lords will recall the atmosphere this time last year as we eagerly awaited the opening of the Olympic Games. When the Hammersmith flyover needed major repairs, a whole group of people could hardly conceal their glee. Noble Lords might remember the people who said that it was going to be too expensive at £9 billion, the transport system would not work and the whole place would collapse. They said that it was going to be a national embarrassment, and many of them decided to get out of the country. They went to France or America or wherever, and was it not good to see that we proved them so wrong? Who today complains about the cost?
One reason why the Games were so special was the extraordinary success of Team GB, but this achievement did not happen by chance. That glorious summer of Olympic success was not achieved by a Government who retreated and let the athletes get on with it, nor was it done through government picking winners. The unpredictability of sport, as with business, would have made that a foolish gamble. Instead, it was sustained by an active government programme that provided practical support and funding to British athletes. We in business can learn a lot from this, too.
Britain needs a proper British investment bank with strong regional presence and a long-term focus. We are the only country in the G8 without a state-backed institution like this. Its absence has made it much harder to correct the collapse in small business finance after the banking crisis in 2008. We need an active industrial strategy that can help to remedy one of the chronic weaknesses in British business—a lack of investment and a lamentable achievement in productivity. From the 1970s onwards, investment has been lower in Britain than in most of its competitors. The fall in investment after the financial crash has been greater and longer lasting than for any comparable recession since 1973 or 1990. Without radical change, there is a danger that any economic recovery will be based upon a consumer take-up, rather than an investment surge. It will leave us extremely vulnerable to future economic shocks.
I have serious concerns about the Government’s progress on infrastructure investment. Of the 576 projects that have been announced by the Government, only seven have been completed; 80% have not even been started. I simply do not understand the Chancellor’s recent statement announcing so many infrastructure projects, all of which will be delayed until after the election. Why wait? Why dither? Just do it, and do it now.
I am particularly concerned that poor planning and implementation have hampered the delivery of super-fast broadband to many areas of the country, particularly rural areas. Despite all this, e-commerce in the UK is thriving. We have a higher share of our GDP in this area than any other developed nation. This is brilliant, but we cannot take our feet off the accelerator. I have been horrified by how many business-led reports I have read recently that seem to totally ignore the digital revolution taking place before our eyes. Sometimes I think that politicians think that they are digitally savvy just because they use Ocado or Amazon. In their mind’s eye, too many still seem to regard the digital revolution as a bit player in the wealth of the nation. As I have said before, if business people are not having sleepless nights over their potential exposure to the digital onslaught, their future will be bleak.
Here is the truth: the digital revolution is Schumpeter’s creative destruction writ large. Just look how traditional channels of distribution have been destroyed by the new media—music, movies, printed news, books and photography—and the companies that have gone to the wall, including Jessops, HMV and Blockbuster. There are many more to come. The sectors just about to fall to the advent of this tsunami of technology include banking, medicine and education. The changes in these sectors are particularly breathtaking. This new digital order represents a flat world where my competitor and the person challenging me for my job may well live halfway around the world, and our thinking needs to reflect it.
I take as an example HS2, which I must say I first enthusiastically supported but which I am now having second thoughts about. I do not think that we have factored in the technological changes that are upon us. I do not understand the logic of spending £40 billion and more just to enable people to get from Birmingham to London 23 minutes earlier or Manchester to London 50 minutes earlier for them then to be stuck in monster traffic jams on the Euston Road. I adore using the TGV in France, and I have been envious of that country’s achievements, but could it just have been a 20th-century phenomenon? Just for once, why do we not try and project what the world will look like in 20 years’ time, when HS2 is scheduled to be completed, and in doing so remember what the world looked like 20 years ago? Which of us could have predicted Skype? Who would have thought it would be possible to speak to one’s children in Australia holding a small device in one’s hand, to receive the transmission in high definition and perfect sound, and for there to be no delay in transmission? Who would have guessed it would also be free of charge?
Now let us project forward. In 2033, can we imagine a technology that could transmit a perfect hologram of a person halfway around the world sitting on a chair in front of us—a hologram where you are hard pushed to tell the reality from the image? If this and thousands of other technologies are bubbling away, who in their right mind would journey to a meeting starting early in the day and getting home late at night, no matter how fast the train will travel? That is why we need to project the technology forward in all these mega-expensive infrastructure decisions.
I was going to talk about my new role, which is no longer on the Front Bench, but I shall leave it because I have hit my time.