Queen’s Speech - Debate (3rd Day) (Continued)

Part of the debate – in the House of Lords at 7:50 pm on 26th June 2017.

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Photo of Lord Cavendish of Furness Lord Cavendish of Furness Conservative 7:50 pm, 26th June 2017

My Lords, while it is always interesting to follow the eloquence of the noble Lord, Lord Morris, I wish that at some point somebody would explain to me how one can reconcile giving up austerity with keeping the national finances in good heart without endowing future generations with debt.

I should very much have liked to speak on many aspects of the gracious Speech but concluded that I would say one thing on one subject where I have the most personal experience and on which, incidentally, my noble friend the Minister was silent during his excellent opening speech. It concerns the SME sector of British business, which, I am told, contributes more than 80% of our output and growth. I have fears for its future, and these fears have been echoed by my noble friends Lord Inglewood and Lady Fookes.

First, I need to declare my interests. For most of the last 45 years, I chaired a family group of companies in Cumbria concerned with farming, forestry, leisure, mineral extraction, housebuilding and horseracing. Although I have relinquished the chairmanship to my daughter, I remain on the board of these businesses. At no point over those last four decades has it been more difficult than it is today to maintain the level of investment that these businesses require. Fearing that I may have had problems of my own creation, I consulted widely with some 20 businesses in my area. Without exception, all told the same story. Nor this time can the blame be laid at the door of the banks, even if they have let some people down.

In a sentence, the cause of the problem is a record high burden of taxation, much of it through stealth taxes, the disproportionate effects of regulation and, added to those, a mean-spirited and unhelpful culture that has developed over time among the numerous public sector agencies that impact on our working lives. Those three things combine to squeeze margins to the point where investment carries unjustifiable risk. I want to be clear: this is not about personal taxation. The Government are plainly right to work remorselessly to restore the public finances to health—and I accept that all of us who can have a part to play there—but what they should not do is to cripple the sector that contributes so enormously to creating jobs and prosperity.

I wish to say a word on those three ugly sisters—or brothers, if you prefer. Ministers may, with justification, pray in aid numerous schemes and devices to assist the SME sector, but that does not alter the fact that today’s tax take is at an all-time high—a point made by my noble friend Lord Borwick. Business has been vocal as to the impact that it carries in respect of business rates and national insurance contributions—that ill-named tax on jobs. Less well publicised are the regular hikes in the insurance premium tax, starting as it did at 5%, then rising to 9% and, more recently, to 12%. These are serious impositions and fall disproportionately on SMEs, which have less access than large companies to sophisticated financial advice.

Where regulation and employment law are concerned, it should be obvious that for myriad reasons they impact more heavily on SMEs than on larger concerns. To an alarming extent—I have personal experience of this—large companies lobby for increased regulation on the basis that they can afford complicated compliance, knowing that their smaller competitors cannot. An especially venal complicity on the part of the Brussels institutions has added to my conviction that Brexit is for the good. Brussels plays host to some 60,000 lobbyists, paid by large multinationals whose sole job, as far as I can see, is to obtain regulation that favours them and harms their smaller competitors. Perhaps my noble friend would add that to the list of unacceptable practices that he wishes to legislate against.

Finally, I must turn, with some sadness, to the present-day public sector culture, which I find damaging to smaller enterprises. It is worse among the supposedly independent agencies than among government departments, and it is conspicuously awful among the powerful monopoly utility companies. There has been a growing tendency over many years among powerful agencies to bully and harass those over whom they can exercise some control. The attitude might be summarised by the experience that members of the public have nowadays when they visit a hospital. The parking they used to enjoy close to the main building has now frequently been given to the staff, and as often as not we are now sent considerable distances and have to pay for it. All change these days, I find, is for somebody else’s convenience and never for mine. I even notice it in the Palace of Westminster.

Perceived hostility on the part of public sector organisations and the often slovenly service they give carries a huge cost. Planning is a powerful example. I could point to numerous examples of SME companies seeking to invest suffering endless delays for no good reason at the hands of planning authorities. What is so galling is that these people seem to have neither an interest nor an understanding of the harm they inflict on their own communities or of the good they could do by a simple change in attitude.

In my local community, I believe I have identified investment delayed or cancelled amounting to tens of millions of pounds. I also believe I have identified the reasons and given them to your Lordships. If those reasons can be addressed, I confidently predict that the sector will respond magnificently and produce still more jobs and tax revenues and enduring prosperity for all.