Debate on the Address

My Lords, I echo the Minister’s fine words about my noble friend Lord Sainsbury and agree that my noble friend’s contribution has been quite outstanding. Quite rightly, the gracious Speech starts with stability in the economy and how that is the foundation of a fair and prosperous society. Like other noble Lords, I congratulate the Government on consistently and successfully working at this policy over the past 10 years and welcome the promise to continue working towards the same objective. It is very laudable. Your Lordships have already debated public services, immigration, health, security and the role of the state, global warming and foreign policy. Today it is the turn of business and the economy. The Government are wise to have launched policy reviews covering virtually all these issues. By looking to the future, they will revitalise themselves—that is what progressive Governments do. Of course, the Tories are carrying out the same reviews, but let me say to the Front Bench opposite that, although the issues may be similar, their reviews have a different feel. Instead of being about the future, they seem more about escaping from the past. With apologies to the noble Lord, Lord Marlesford, they seem to be about holding an inquest into Thatcherism. Perhaps the explanation is that these reviews are being carried out by people loaded down with the baggage of the past, and all that baggage has yet to be unloaded. Recently the Government have initiated a number of reviews designed to help business, led largely by people from business. We have had reports on housing, the health service and cutting red tape; we are promised reports on how to improve the transport infrastructure, deal with the skills gap and the financial health of the creative industries. With all that work going on, I find it difficult to understand why the CBI and the Institute of Directors accuse the Government of lack of support for business. This seems based on the level of corporation tax; the words of the noble Lord, Lord Sanderson, reflected that. In my business experience, tax is only one part of the equation. Last week we had the Varney review, which dealt specifically with relations between business and the tax authorities, and how to improve them. I hope that noble Lords opposite will agree that this, too, is business-friendly, and that they will not provide comfort to the tax avoidance industry by querying the review. The most important report, of course, has been the Stern report on climate change. It was welcomed by business and Government alike, with the exception of my noble friend Lord Barnett. It stimulated the promised Climate Change Bill. Indeed, business asked for long-term goals to reduce carbon emissions plus a legal framework in which to achieve that because long-term certainty will enable business to invest in the equipment and technology to achieve this reduction. I hope that the Minister will assure me that the Bill will also put in place monitoring and reporting arrangements so that it is fairly administered. Business is in agreement with this objective; indeed, some firms already say that they are carbon-neutral, and many more say that they are working towards this objective. Detailed confirmation appears in company annual reports all the time. I hope that the determination of many companies to become carbon-neutral will persuade the Tories to stop flip-flopping on this issue and that they will firmly support the Bill. The real challenge is to maintain our continuing prosperity while achieving a low-carbon economy. The noble Lord, Lord Newby, is right: business has to meet this challenge and produce the action for which the noble Lord, Lord Vallance, called. The challenge lies not only in the more efficient use of energy, waste reduction and carbon trading but also in the materials that we use. Metals, plastics, rubber, textiles, packaging, composites and building materials represent an enormous part of our economy—some say nearly 20 per cent. All over the world, people will have to adapt to these new pressures. Some materials will have to be substituted by other more sustainable ones that use less metal or require less water. Others will have to be used in different combinations and quantities. In addition, we will have to look at reuse, disassembly and recycling on a scale far greater than in the past. That will involve redesigning many products, which will provide the kind of entrepreneurial opportunity that the noble Lord, Lord Wade, spoke about. How will we tackle this? The materials community is diverse but, fortunately, some time ago in this country the Materials, Innovation and Growth Team realised that the differentiation of materials, one from another, is becoming less important. It is more important to look at what materials communities can share so that they and their supply chains can satisfy consumers’ needs in an increasingly sustainable and innovative way. My noble friend Lord Bhattacharyya referred to the work of the DTI and the Technology Strategy Board. For this purpose, they formed Materials UK. I declare an interest: I was invited to be its honorary president. Interestingly, these mighty companies of the materials industry asked the design companies and organisations to join them. Jonathan Ive, who designed the Apple iPod—he comes from Newcastle—explained why rather well. He said he tried to design products that solved problems and that truly innovative companies often had to change their approach to how they develop, evaluate, make and market products. In this country, our creative capability is an important national resource. Participating in efforts such as Materials UK makes a lot of sense. Both maiden speakers spoke of the problem-solving, innovation- and design-based, research-based, service-giving, brand-promoting, fast-moving economy—now referred to as the knowledge and creative economy. I agree with them. Much future wealth lies there. Happily, it is growing and expanding in this country all the time, but I am not sure whether we are aware how much, or whether our national statistics fully represent this kind of economy and present a true picture. We capture very well our investment in buildings, the equipment in them, our labour and the products and services, but do these figures really capture a knowledge economy? Are we quantifying creativity and the marketing of knowledge? Are we measuring our trade in best practice, innovation and product design, brand building and many of the other things which are required in order to compete in today’s global sustainable economy? A piece of packaged software is measurable, but what about the far greater amount of software which is not packaged? What about the skills which we import through immigration and those we export through know-how, services and the creative industry? The noble Lord, Lord Moser, explained why the Statistics and Registration Services Bill mentioned in the Queen’s Speech is so important. He and the noble Lord, Lord Jenkin, told us that one purpose of the Bill is to raise public confidence in our national statistics by putting the Office for National Statistics under an independent board beyond the reach of politicians, which is laudable and desirable. But statistics must also reflect what is actually going on in our economy. Perhaps the Bill also can help with the transparency for which the noble Baroness, Lady Noakes, called. The Minister who is to reply, a former distinguished accountant, knows about this. Perhaps he listed a lot of these investments as intangibles and, as a result, they never appeared in our statistics, but now these intangibles play a crucial role in our competitiveness. So I hope that he will ensure that the board of the Office for National Statistics will guarantee not only that the work is independent and of high quality, but also that the output is comprehensive so that it measures what is really going on in our modern knowledge economy. Without that, our national statistics may be accurate and independent, but they may also be incomplete and misleading and will fall into all the perils which the noble Lord, Lord Moser, told us about. Most speakers seem to agree that we cannot master the challenges ahead in the old ways. It requires new politics and new business models. I, and other noble Lords, have tried to provide a few signposts. I hope that the Government are listening.