Pre-Budget Report 2009

My Lords, I agree with the remarks of my noble friends Lord Lamont and Lord MacGregor. I slightly disagree with the depth of pessimism of the noble Lord, Lord Bilimoria. However, in the few minutes available to me, I shall take a slightly different, perhaps less fundamental, view of what is happening today. We have heard a lot of good speeches about the depth and length of our current crisis. However, I am aware, having listened to quite a few Budget speeches—before the advent of the Pre-Budget Report—that there was always almost a necessity for the Opposition to be rude about the Government’s Budget; that is almost accepted. I remember the second Budget of my noble friend Lord Lamont, in which he introduced a new tax plan; he brought down taxable income at some stages to 20 per cent rather than 25 per cent. What was the reaction? The Labour leader—then Neil Kinnock, now the noble Lord, Lord Kinnock—said that the Budget was, ""a panic-stricken pre-election sweetener"." Labour later said that it would oppose the introduction of the lower rate of income tax. Shortly afterwards, we—the Conservatives—won the election. Then there is the case of one of the first Budgets of the noble Lord, Lord Healey. I was already in the House of Commons in March 1974 when the deficit was running at only £4 billion a year. The then Chancellor increased income tax by 3 pence. The reaction was that two Conservative MPs wore Chairman Mao suits in protest. One of them, the noble Lord, Lord Dykes, is a Member of this House today; I am sorry that he is not with us. I am not totally frivolous in saying that there is a sense in which one must try to stand back and look at a Budget, and what it will do, with a sense of history and, perhaps, without taking too much of a party-political view—particularly when there is going to be an election in five or six months’ time. Standing where I do in this House, I obviously hope that we, the Conservatives, will win it. One must understand to a degree why this was a pre-election PBR. It is obviously largely there to win votes. It would be much better if the Opposition and Her Majesty’s Government could agree that there was a crisis and basically agree what measures should be taken to deal with it. If that does not happen, there are disputes and wrangles which make for a much worse loss of confidence, nationally. One of the problems with this is that if the United Kingdom loses its triple-A credit standing, which some newspapers tell us is a possibility for the future, it will in my judgment be largely because the newspapers are so busy telling us what a crisis we are in. We need rather more quietness and confidence, and rather more of an ability to take a long-term view. That said, I confess I find it totally impossible to understand what the purpose of the Fiscal Responsibility Bill is. I have a copy of it in my hand. It seems to me simply to repeat the powers that the Chancellor already has. Does it simply mean the Chancellor now feels sufficiently insecure that he cannot make Secretaries of State in the high-spending departments do what he wants them to do, and therefore he has to introduce the Fiscal Responsibility Bill? The Bill says: ""The Treasury must ensure that, for each of the financial years ending in 2011 to 2016, public sector net borrowing expressed as a percentage of gross domestic product is less than it was for the preceding financial year"." Well, big deal. It is extraordinary that it is thought necessary to produce this Bill, which I gather will be debated in the Commons on 6 January, the second day after the return from the Recess. I quote another paragraph from the Bill. It states: ""The Treasury may make an order imposing on the Treasury a duty or duties framed by reference to any one or more of the financial years ending in 2011 to 2016"." I should be very grateful if the Minister in replying—I know how wise he is—would explain to me what that means. As I say, I do not know whether it simply represents a fear on the part of the Treasury that it does not have the ability to tell departments what they must do. I switch to a very important question; namely, what sort of companies and businesses will emerge in the United Kingdom that will make it stronger and better able to keep up with the competition which will certainly come from China and India? Some improvements have been made to the common agricultural policy which will help agriculture in this country to a degree, but not much. Yields per acre will not increase a great deal. Climate change is possibly of benefit to us because we are well up in the technology to deal with it and the Prime Minister is taking it very seriously. I do not think that banks and hedge funds can and should have a higher percentage of our national assets. It is perfectly possible to look at separating deposit banks from investment banks, as has been done in the past in the United States and perhaps that should be looked at. I am in favour of the idea of a global Tobin tax on all financial transactions. We have spoken about this before, but I realise the extreme difficulty of making that work effectively and globally. Above all, we need to increase the number employed in manufacturing—to use an old-fashioned word—in this country. This concerns not only employment but our brains. How good will the things that we produce be? We must specialise in the highest technology that is available. I very much like the idea of a new advanced apprenticeship to help those who do not go to university to be ready to deal with firms’ modern technology. We need to encourage all that we do in pharmaceuticals, biotechnology, the carbon sector and the nano industry. I appreciate the references made to that in the Pre-Budget Report. Certainly, if we do not adopt the best, most modern and exciting developments, others will do so, employment will not rise and we will slip down as a manufacturing country. I suggest that money should be made available to universities and charities that concentrate on the most novel scientific developments. This is happening to an extent at present. Until last year, I was for 10 years on the council of the University of Sussex and was delighted that in recent years the number of undergraduates reading high sciences there was increasing. However, like other universities, we were, and are, looking for more money for that purpose. It is well worth pursuing. I suggest to the Front Benches that we should consider making money prizes available, denoting great merit, for the best scientific discovery of the year. We should copy the Nobel Peace Prize and think about awarding British prizes for the best, most successful and most exciting scientific development of the year. The relevant technology would then be invested in, thereby benefiting manufacturers in this country as well. If we could move in that direction, it would have very positive support, open more doors and enable employment and growth to rise.