– in the House of Lords at 2:49 pm on 14th November 2022.
To ask His Majesty’s Government what steps they are taking to improve communication between government departments and (1) businesses in the City of London, and (2) industry and commerce in general.
My Lords, departments meet regularly to ensure that government communications with business are clear and consistent. BEIS’s primary way of engaging with business is through dedicated sector teams that provide expert engagement with sectors, mainly large companies and trade and professional bodies. Treasury Ministers and officials meet regularly with representatives from financial services firms, including those based in the City of London, on a range of matters from regulatory reform to the broader state of the UK economy.
Is my noble friend aware that that Answer and the depth of it will be enormously welcome to the CBI, the City, the chambers of commerce, and in particular some of our huge and expanding companies, because they have not felt part of decision-taking in our country in recent years? Bearing in mind that we need to get our growth rate up as we move forward, will he please ensure that the statement he has made today is implemented on the ground so that when I next contact the various bodies I have mentioned in a year’s time, they will say thank you to the Government for making sure that communication is now back on track?
I assure my noble friend that communication is very much on track. The first meeting that the new Business Secretary had following his appointment was with the “big five” business representative organisations, which collectively represent around 750,000 businesses.
My Lords, in my two years as president of the CBI, I saw the power of government, business and the CBI working together, whether it was the furlough scheme or lateral flow tests. Can the Minister reassure us that the Government are listening to the CBI regarding supply-side reforms, which are desperately needed for the
Also, the noble Lord, Lord Naseby, talked about business and government. Does the Minister agree on the power of business, government and universities working together, as with Oxford University on the vaccine and Birmingham University on the world’s first retrofitted hydrogen-powered train?
I am happy to agree with the noble Lord. The CBI was one of the organisations that my right honourable friend the Business Secretary met only last week.
My Lords, in his Answer, the Minister used “consistent”. However, if you talk to businesses, that is not a word that they use. They use “inconsistent”. There has been a rotating door of Business Secretaries, a rotating door of Prime Ministers, and an ever-changing policy landscape. How does the Minister expect businesses to know where to invest and how to invest when there is no consistent policy from the Government?
The noble Lord is wrong. There is consistent policy from the Government. In a whole range of areas of policy, life continues as it did. There are of course unique challenges facing us at the moment—the headwinds of Covid, the energy crisis, et cetera—but this Government have the solutions and will carry on implementing them.
My Lords, businesses associated with the City of London gave us the last financial crash and have also routinely been involved with the mis-selling of numerous financial products. They have been involved in money laundering, tax abuses, frauds, forgery of customers’ signatures, and numerous predatory practices. Can the Minister explain when the Government will launch a public inquiry into the City’s predatory practices and clean up this industry?
The noble Lord is wrong, as he is on so many of these matters. Of course, proper regulation is important, and we will shortly be considering the economic crime Bill, to clamp down on many of those practices. The noble Lord forgets that the City of London is one of the most successful financial centres in the world. It contributes billions of pounds to the British economy. He is always calling for more public expenditure; if he kills the City of London, he will have even less to spend.
My Lords, we all know that difficult decisions on tax and spend must be made, but 100 business and university leaders recently wrote to the Chancellor making it very clear that cuts in R&D would be a false economy, given the evidence-based role it plays in productivity and competitiveness. Will the Minister make it clear today that the Government will listen to those business leaders and that his department will fight hard to protect R&D spend?
I thank my noble friend for her question. I know that she takes the subject of R&D spend passionately and I agree with her, but we will have to wait for the decisions that the Chancellor will announce on Thursday.
My Lords, there are 1.25 million job vacancies in the economy. There are skills shortages in every sector, every area of skill and every part of the country. We have an immigration policy that is not focused on business need and an underinvested, overstretched infrastructure. Does the Minister accept that we need action, not just communication, to heal our badly broken economy?
Of course we need action. I agree with the noble Lord on that, and we will hear the Chancellor’s latest proposals on Thursday. It is a difficult issue that needs resolving, but one of the consequences of our record low levels of unemployment is skills shortages. However, we have a skills plan to invest across the whole range of the economy to make sure that we have the skills we need.
My Lords, the Financial Services and Markets Bill received significant submissions of written evidence from business, industry and commerce, including many from the City who welcome the Bill but call for a number of commitments on the transition from EU to UK regulation. Recent government actions have undermined faith in the City, at a time when we need to listen closely to our world-class financial and professional services. What assessment have the Government made of submissions to the Bill and what further steps will they take to engage productively as it continues its passage through both Houses?
I agree with the noble Lord on the importance of our world-class business and professional services in the City of London. Perhaps he can have a word with his noble friend about the importance of these industries to the country. Of course, we will continue to liaise with all City firms; we will not always agree on everything, because appropriate regulation is important, but we will continue to liaise with them.
I am happy to give the noble Lord the commitment he seeks. Nuclear power will be an important component of our energy infrastructure and it is also important that we continue to invest in the SMR programme.
My Lords, is the message that the Government seek to convey to the City and to commerce that a Conservative Government are best equipped to clear up the mess that only a Conservative Government could make?
I thank the noble Lord for his helpful question. The message we seek to convey is that the City of London is an important component of the UK financial infrastructure. It makes an important contribution to the UK economy. Proportionate regulation is vital to this sector, but we continue to encourage and support it.
My Lords, while we welcome better communications between government and businesses, how aware are the Government of the concept of rent-seeking, in which businesses may ask for measures that are beneficial to them but detrimental to other sectors?
My noble friend makes an important point. We had a lot of experience of this in the European Parliament, as a lot of businesses would lobby for regulation that was favourable to them and would perhaps encourage regulation that was unfavourable to their competitors. We have to be careful to make sure that such practices are not widespread. It is important that we continue to engage with businesses. As I said earlier, we will not always agree, but we need to listen to what they say.
My Lords, businesses in the City of London and industry in general are keen to share their views on how to improve the international competitiveness of the United Kingdom. Can the Government ensure that those views are actively canvassed at an early stage when undertaking consultation as part of developing legislation?
I can give the noble Lord that assurance. We have been engaging extensively with the City of London financial services firms in the development of the related legislation that will shortly be before your Lordships.
My Lords, in this Evidence Week, I draw the Minister’s attention to the fact that researchers in the University of Sheffield have shown that, between 1995 and 2015, the finance industry—sometimes referred to as the City of London—made a negative contribution of £4,500 billion to the UK economy. Have the Government investigated this, and will a report be published on it?
The short answer to the noble Baroness’s question is no. I have no idea what she is talking about or indeed where she has got the figures from. The last figures that I saw showed that the financial services industry—which is not just in the City of London—contributes tens of billions of pounds to the UK economy. The noble Baroness and her friends are always talking about more public expenditure and the need to spend more in every sector. Somebody has to earn that money, and one of the principal earners for the UK is the City of London. We should be proud of the contribution that it makes.