My Lords, I welcome my noble friend Lord Callanan to his role and wish him success. I am delighted to follow so many significant contributions, including the two excellent maiden speeches, in this important debate on the gracious Speech.
With today’s focus on economic issues, I congratulate the Government on achieving the highest UK employment rate since records began. Global firms have been investing here, taking advantage of our business-friendly environment and successful labour markets. We must protect this. A hard-left economic agenda would, in my view, do dreadful damage, as indeed would a hard-right or no-deal Brexit.
I welcome the Government’s proposals for the national living wage, increased housebuilding, protecting critical infrastructure and encouraging electric vehicle use to build on the UK’s leading position in this area. I am proud that the Government will continue supporting international action on climate change, which poses a real threat to younger generations. Another threat to the British economy is the worrying resurgence in consumer debt levels, which rose 10% last year. We know that excess borrowing and irresponsible lending preceded the 2008 crisis. I certainly support the financial guidance Bill to help consumers manage their finances and debts better, although more needs to be done to control consumer debt.
I also welcome the Bills to improve the treatment of mental ill-health and tackle injustice. However, there was a serious omission from proposed anti-discrimination measures. The Queen’s Speech rightly calls for an end to prejudice on the basis of gender, faith, race, disability or sexuality, but what about age? Can my noble friend the Minister explain why this was missing? Reducing immigration makes it increasingly important to tackle the ageism that still pervades Britain’s labour market. With an ageing population, the more we can encourage full-time or part-time later-life working, the better the economic outlook. This is not about favouring older generations over younger ones; it is about ensuring that everyone has opportunities to work and contribute to the economy and their own economic welfare. Too often employers overlook the talents, dedication and experience of older staff, whether in training or recruitment for new roles. In this context, I also welcome the new institutes of technology to improve young people’s technical skills, but we need an adult stream, too. Lifelong learning, mature apprenticeships and reskilling can help the British labour market stay world-class, improve productivity and enhance growth.
Another important issue for the economy and its resilience is corporate finance. In particular, I am concerned about the significant advantage for debt finance over equity. Stamp duty is paid on UK equities, while debt is subsidised by taxpayers and favoured by regulators. Having spent many years in investment management, I find this bias against equity capital concerning. Equity financing was invented in the UK and helps businesses drive innovation with the support of patient, long-term capital. Leaving the EU would make this even more important.
I had the privilege of opening the London Stock Exchange last Friday and it struck me that every trade in a British company attracted a tax charge, whereas each non-UK company trade did not. It is estimated that the tax comprises 70% of UK equity trading costs. Pension funds and insurers have dramatically reduced equity holdings in recent years, removing some of the underlying support for British business. As auto-enrolment brings millions more workers into long-term investing and quantitative easing continues to depress bond yields, the nation’s long-term economic interest could be boosted by levelling the playing field for equity versus debt finance, encouraging more activity in public equity markets, rather than private equity, as well as encouraging pension funds to invest in growth and job-creating British infrastructure.
Finally, the central theme of the forthcoming legislative programme revolves around arrangements for leaving the EU. From an economic perspective, I wholeheartedly support the wise words of my right honourable friend the Chancellor of the Exchequer, who urges prioritising jobs and prosperity during our journey of separation from the EU. The British people voted to be better off, not worse off. They did not vote to jeopardise our economy, manufacturing and services industries and all the jobs that depend on them— and what about immigration? From a demographic and economic point of view, immigration is essential for our economy. As our ageing population is moving into retirement with fewer younger people to support them, immigration has helped to power economic growth.
Leaving the EU single market, customs union and EEA by 2019 would be disastrous. Yes, Britain is great. We have strength, ingenuity, scientific brilliance and resilience but without a more conciliatory, co-operative approach to Brexit the economy is at risk. I believe that logical, rather than ideological, economic arguments are needed now. I hope my noble friend the Minister and many colleagues on these Benches can work with others in the national interest to help us better achieve success and future prosperity.