My Lords, it is always a pleasure to follow the noble Earl, although it has been a little while since I last did so. I add my congratulations to the two maiden speakers, both of whom will add greatly to deliberations in your Lordships’ House and who mostly spoke of their experiences in the City. I feel that they will not entirely approve of what I have to say this evening—but I agree with the noble Lord, Lord Colgrain, on what he said about agriculture. A number of speakers tonight have made the point that the removal of the subsidy delivering cheap food is an equation that is a little hard to understand. The agricultural industry will need a great deal of support as we go through the Brexit process.
In his opening remarks, the Minister spoke about some of the fundamental strengths of the economy. I welcome him to his place on the Front Bench. I agree that there are a number of indicators of the economy that are good, and lack of unemployment is certainly one of them. But there are, equally, a number of the measures of the economy that do not give such grounds for optimism, such as the sheer size of the central bank balance sheet, the lowering of growth, low interest rates with growing inflation, a faltering property market and some of the difficulties coming into the labour market. Those are all areas of concern, but they are not fundamentals.
I should like to speak to two fundamentals that are at the core of a genuinely strong economy: the ability of the financial system, and banking in particular, to deliver capital, which is the fuel for industry and commerce, effectively into industry and commerce; and, secondly, the labour market, which remains dysfunctional, with those at the top still being rewarded excessively for a modest performance—and, indeed, at times failure—and those at the bottom receiving insufficient reward for their honest endeavour.
Before I make those points, I should say that I am utterly committed to free enterprise and to private capital. I believe that remains the best system for ensuring growth in our country. That is underpinned, however, by two principles that I believe in. First, capital and labour must be equally regarded and respected; they cannot be out of balance. Secondly, the purpose of wealth creation is, primarily, to enhance the nation and society, and the personal accumulation of wealth is a happy secondary benefit that comes from that. I feel that sometimes these days the opposite is the case.
On capital, I served, I served on the Parliamentary Commission on Banking Standards in the 2010-15 Parliament. I reread its conclusions over the weekend and was startled to see how many of our diagnoses remain valid today and how many of the recommendations we made not only remain valid but have not been acted on. If anybody would like to, I suggest paragraphs 111, 116 and 119 are well worth a read. Corporate governance, ineffective markets and a concentration of banking power all remain a problem today—but the primary problem is that banks and the financial system should act as an effective mediation system between those who have capital and those who need it, and the current system does not deliver that, giving too much in commission to too many along the way.
On the labour market—interestingly, from the same report—it is clear that too many people are still being rewarded with too much for too little, while at the other end of the spectrum we have difficulty in ensuring that people at the lower end receive a genuinely living wage, on which they can live without being subsidised by credits. It has always seemed extraordinary to me that we are subsidising labour.
I could speak at length on both subjects but time does not allow. I will close with a memory of one of the first debates that I took part in in this House, on