Queen's Speech

My Lords, I should like to address my remarks to social cohesion in the developing government scenario. I was pleased to hear the analysis of the noble Lord, Lord Skidelsky. I put on record how indebted we are to him for the wonderful book he has written about John Maynard Keynes. Keynes is alive and well, thank you very much. There are lessons to be learnt from the 1930s, as the noble Lord has pointed out in that book, even though the world has changed substantially since then. I echo some of the remarks of my noble friend Lord Myners. I look forward to him being a thorn in the flesh of anyone in the Chamber from his new roving position on the Back Benches. First, I ask the noble Lord, Lord Henley, whether he agrees that the disaster in the financial services industry has caused the explosive growth in the deficit. Unless we get that right, we shall not get anything right. Eighteen months ago, we were at an annualised rate of 2.5 per cent and now we are at 11.1 per cent. What has happened? There has not been a sudden pay increase for public sector workers. I hope we will not have a dialogue of the deaf. Mr Cameron said that he wanted consensus that we would all tick the same boxes: a fairer society, economic growth, an entrepreneurial spirit and so on. How can we have a mature dialogue unless we have answers to some germane questions? In the middle of all this, we have three or four totally separate black holes in the various analyses being put forward. I do not see why that is so. The noble Lord, Lord Skidelsky, stopped short of making a point that I should like to make—I believe he would have made the point if he had wished to use this metaphor—that the doctrine of cuts relates to economic growth through the magical resurgence of animal spirits. We are not in the African jungle playing the tom-toms, so what are the animal spirits? Are they the same spirits which led to the disaster? Obviously, if you believe that, you will believe anything. I think that the gloves-on approach in this House in relation to the financial services industry, with some very notable exceptions—I do not want to embarrass my noble friend Lord Myners—suggests that we believe that the financial services industry is still untouchable because it is that part of the world economy which lays the golden eggs. Perhaps the noble Lord, Lord Henley, would kindly answer this question: is the financial services industry now laying golden eggs or is it laying landmines and hand grenades? It is always the poor that get the blame. I am afraid we are heading in that direction now. The other day, even the Financial Times—my Bible in many circumstances, although not under the editor who is now director-general of the CBI—described many of the obscene salaries in the private sector, notably in the financial services sector, as salaries from another planet. But today's editor of the Financial Times ran a leading article last week on Britain preparing for battle with the unions. What about all the workers? Are they not part of Britain? What about the analysis before the battle? In 1961, Harold Macmillan, in a difficult economic time, had a private talk with George Woodcock, general secretary of the TUC, which led to the setting up of the National Economic Development Council. At the moment, I do not think that social cohesion is viewed as important. On the contrary: people are moving away from each other at a terrifying rate. I say this in all seriousness to the Liberal Democrat part of the Government because this is a role which they can play and I wish them well in it. We should be looking at an analysis of industrial and economic players and not just at some sort of doctrinal presentation from politicians, worshipping at the altar of the bond markets. As Angela Merkel, hardly a radical socialist, said the other day, we really ought to work together, including in Europe, to ensure that that comes about. The public sector is not always paid more than the private sector. If you want a top accountant or an economics expert from KPMG to come into Whitehall, you will have to pay them about 50 or 80 per cent extra, in brown envelopes. If we are not careful, we shall destroy morale in public services—in education and in health—which form part of the living standards of the people of this country, as was pointed out by my noble friend Lord Myners, the other day.