Debate on the Address

My Lords, I also take the opportunity to wish the noble Lords, Lord Bilimoria and Lord Rowe-Beddoe, well with their maiden speeches. We eagerly look forward to their contributions to today’s debate. I shall start by looking at the economic climate and, in particular, at globalisation and how the Government can help to create the conditions for business success. Since 1997, we have created a strong and stable economy that has underpinned and strengthened the business environment. That has led to record continuous growth and high employment. We have had the longest period of low inflation since the 1960s and historically low interest rates. Over the past nine years, we have had the longest period of sustained growth for 200 years. Globalisation is one of our major challenges and one of the major opportunities facing business today. The rapid growth of emerging economies, such as India and China, provide substantial opportunities for the UK, with new markets for our exporters and investors and cheaper and more diverse goods and services for our consumers. The Government cannot create business, but they can and should create the conditions where business can grow and flourish. This is a key role for the Department of Trade and Industry. We provide support to companies to ensure that this country remains one of the best places in the world to do business. There are now 600,000 more small and medium-sized enterprises than there were in 1997, supported by Business Link and the DTI’s Small Business Service. To maintain our economic position, we must continue to develop technology—£3.5 billion of the department’s budget goes to science and innovation. That is around half of the department’s total budget. That has more than doubled since 1997. That is necessary, as in our global economy we will prosper only if we are at the forefront of innovation and invention. The UK continues to have an envied record in research. With just 1 per cent of the world’s population, we produce 9 per cent of all scientific papers and receive 12 per cent of all citations. We cannot compete on low wages or low skills, and nor should we. We can and must compete on quality and excellence, skills and high added value and particularly on our ability to innovate. The UK is well placed to meet future challenges. We are restructuring our economy rapidly and effectively. We lead Europe in a number of knowledge-based industries, such as aerospace and pharmaceuticals, biotechnology, mobile communications and photonics. Since 1997 the value of collaborative research between universities and businesses has increased by more than 50 per cent. In the past two years alone, 20 spin outs from UK universities have floated on the stock market, with a combined value of more than £1 billion. We have developed new business opportunities in the creative industries and microtechnology and nanotechnology. The UK must respond to globalisation by raising productivity and competitiveness. We are making progress in raising productivity growth over the economic cycle. We have made progress in closing the productivity gap with France and Germany. These improvements in productivity are all the more impressive because they have coincided with a very strong recent UK employment performance. The UK competition regime is also well regarded. A recent report of individual competition enforcement agencies ranked the Competition Commission joint first in the world. The DTI’s productivity agenda demands an efficient market framework. That includes, as I have just mentioned, rules to maintain competition to keep markets fair and protect employees and consumers. Regulation should be simple to understand and should avoid unnecessary burdens on business. Creating an effective regulatory regime is key to creating the conditions for business success, especially for small firms. There can and should be no apology for laws providing for health and safety in the workplace. We have shown that you can deliver fairness in the workplace and a strong economy. We are determined to keep it that way. We want to ensure that where we have to regulate, we do so with as light a touch as possible. We need to ensure that the costs imposed are proportionate and do not undermine the benefits provided. We also want to reduce the administrative burden—unnecessary paperwork and red tape—associated with existing regulation. The DTI has already committed to delivering £1 billion worth of reductions in regulatory burdens by 2010. As part of the Government’s drive for better regulation, departments will shortly publish simplification plans, as mentioned by my right honourable friend the Prime Minister at the CBI conference today. The DTI’s plan will have a straightforward purpose—to reduce the cost and complexity of the department’s regulation. A wide range of measures will reduce the DTI’s administrative burdens by up to 25 per cent. We cannot discuss globalisation without referring to our low carbon energy future. There are no bigger challenges facing government than how we deliver energy security and tackle climate change. Sir Nicholas Stern’s report made it clear that the scientific evidence is now overwhelming and that the economic case for an urgent response is irrefutable. If we do not act, the overall costs of climate change are equivalent to losing at least 5 per cent of global GDP now and for ever. The costs of taking action can be limited to around 1 per cent of global GDP. With the publication of the Energy Review this summer, the Government have shown their determination to address the twin challenges of tackling climate change while securing the country’s energy supplies. There is no doubt that tough decisions are needed. The UK is entering a new era for energy supplies. For years, we have been an energy island, self-sufficient in gas and oil, thanks to North Sea production. The Government are working with industry to extend the life of energy resources in the UK’s continental shelf, and there is record interest in our innovative exploration and production licences. But, by 2020, we are likely to be importing 80 to 90 per cent of our gas. My department is engaged proactively with the energy industry, which is meeting this challenge with £10 billion of investment in infrastructure to bring in and store supplies from diverse sources. At the same time, we need new investment in all forms of low carbon generation. We need energy in the future that will be affordable, secure and clean. And we need to use it more efficiently. Our strong, long-term commitment to renewables is well known and is bearing fruit. Driven by the renewables obligation, we are already producing about 4 per cent of our electricity from renewable sources such as wind farms, but our ambition is even greater. We have our sights set on a fivefold increase—20 per cent—by 2020. But the reality is that renewable energy simply will not be able to provide all the new electricity generation we need in the timescale in which we need it. That is why our review concluded that we would need a range of security of supply measures and low carbon options, including nuclear, for the future, as well as new import options. Nuclear power currently accounts for a fifth of our electricity, but this is set to decline to about 6 per cent by 2020 as our ageing power stations reach the end of their lives. We believe that new nuclear power, as a source of low carbon generation, could make a significant contribution to our energy mix. The Energy Review has given us an invaluable opportunity to make informed, evidence-based choices on the future of our energy policy. We have already consulted widely and we are continuing to do so on the specific proposals in the review in the run-up to a White Paper in March. On affordable energy, fuel poverty is an issue that has been raised by your Lordships’ House. The Government have taken significant steps in the past 10 years to drive down the number of people in fuel poverty. For example, the winter fuel payment was only £20 in 1996-97. This year, about 11.5 million pensioners in more than 8 million households will receive payments of £200, rising to £300 for people over 80. We are spending £800 million on improving heating and insulation in low-income households through initiatives such as Warm Front. But rising energy prices mean that we do have to keep up the pressure and use all the means available to reach and protect the most vulnerable homes, particularly during the winter. The Consumers, Estate Agents and Redress Bill will give consumers a stronger voice. Our proposals on estate agent redress will put power back into the hands of the buyer and seller. Buying a home is one of the most important decisions that anyone can make. Most estate agents operate honestly and fairly, but some do not. Indeed, research shows that 21 per cent of sellers and 23 per cent of buyers experience problems with their estate agents. All estate agents will be required to belong to an approved scheme to determine disputes between estate agents and buyers or sellers of residential property in the UK. Approved schemes will also award compensation. The Bill will also ensure that agents refusing to join the scheme will be banned from operating, and that other rogue estate agents could be banned from continuing in business. We will also require estate agents to keep records of client dealings for six years, which trading standards officers will be empowered to inspect without notice. On doorstep selling, consumers will be given the same seven-day cancellation and cooling-off rights for a sale made during a solicited sales visit as they have for a sale made during an unsolicited one. This will make it more difficult for rogue traders to operate successfully. The Bill will also bring together Energywatch, Postwatch and the National Consumer Council to form a more coherent and effective voice for consumers, giving them a single point of contact for dealing with problems. The Bill will be fair for business and good for the consumer. The Statistics and Registration Service Bill has been introduced in another place. The Bill aims to entrench statistical independence through the creation of a new, independent board with statutory responsibility for ensuring the quality and comprehensiveness of official statistics. The board will be outside ministerial control, established as a non-ministerial department, with special funding arrangements outside the normal spending review process. The board will, as far as possible, replace the role of Ministers in holding the National Statistician to account for the running of the Office for National Statistics. Moving on to issues covered by the Department for Culture, Media and Sport, I hope that noble Lords will support the Digital Switchover (Disclosure of Information) Bill. The country is due to switch its analogue televisual broadcast signals over to digital region by region between 2008 and 2012. Since 1998 the shift to digital television has been rapid and impressive. Today, more than 70 per cent of UK homes have a digital TV. Digital switchover, which will start in Whitehaven at the end of 2007 and the rest of the Borders region in 2008, will bring considerable benefits to the UK, primarily to the 25 per cent of homes that cannot get digital services through an aerial now. There will also be benefits from the release of spectrum currently used by analogue which can be used for new and dynamic services to support future economic growth. But switchover needs to be an inclusive process and no one should be left behind. That is why the Government have established a comprehensive help scheme for those aged 75 and above or with a significant disability. We want to make it as easy as possible for those who most need help to get the assistance they need through the transition to digital switchover. That is why we are introducing a Bill to allow the Department for Work and Pensions to share social security data with the operator of the help scheme. The measures are supported by the digital switchover Consumer Experts Group which is comprised of organisations such as Age Concern, RNIB, Help the Aged and the National Consumer Council. Also regarding the Department for Culture, Media and Sport we will publish in draft a Bill to enable the subsequent ratification of the UNESCO Convention on the Protection of Cultural Property in the Event of Armed Conflict. The Bill will strengthen our commitment to the protection of our own heritage and formalise our responsibilities as part of the international community in respecting the cultural property of other nations. It will send a clear signal that the UK takes seriously its commitments under international humanitarian law. This is a brief summary of the Bills we are about to receive. The measures the Government propose will bring new benefits to businesses and to the public, maintaining security and development and meeting the challenges of the future.