Queen’s Speech

My Lords, the gracious Speech in Her Majesty’s Platinum Jubilee year starts with the Government’s priority being to grow and strengthen the economy and help ease the cost of living crisis for families. It talks about supporting the Bank of England to return inflation to its target by establishing an infrastructure bank. I am proud to have worked with the British Business Bank and I pay tribute to it for increasing its book from £8 billion to £80 billion through the pandemic.

The gracious Speech talks about championing international trade, and I pay tribute to the Department for International Trade for rolling over 66 EU bilateral agreements in time and the new free trade deals with Australia and New Zealand, on which I had the privilege of working closely with it as president of the CBI. We are now in the midst of the FTA with India being negotiated with an objective of completing it by Diwali. Last week, I was in India launching the UK-India industry task force between the CBI and the CII.

The gracious Speech talks about investing in our gallant Armed Forces. I remember the debate that we had in this House on the 70th anniversary of NATO in 2019, and I remember very clearly then—three years ago—saying that we should increase minimum spend on defence from 2% to 3%. I may boast, but I think that I was prescient. Would the Government agree that we need to do this now after the sad Ukraine war?

The gracious Speech also talks about the Commonwealth Games in Birmingham. I am the proud chancellor of the University of Birmingham and we are at the heart of these Games, with the athletes’ village in the university and with the baton relay being sponsored by us going to all 72 Commonwealth countries and territories around the world as we speak. Hockey and squash are also taking place at the university and there is a business event at our exchange building in the middle of Birmingham.

I have been president of the CBI for nearly two years now. My tenure started with completing Brexit, then we had the Covid pandemic out of nowhere and now the Ukraine war; I suppose I will be known as the “crisis president”. It is a fragile recovery—already fragile before the Ukraine war—with supply chain challenges, labour shortages, very low employment but energy price inflation, indeed inflation across all parts of industry. In fact, there is a danger of wage-price spiral inflation and a danger of inflation with no growth—stagflation. I first challenged the Government by asking the Chancellor in a meeting in February last year if he was worried about inflation. Businesses are now feeling the chill. There is a cost of living squeeze on firms and on consumers. We are very worried.

And what has happened? Taxes have gone up; national insurance has gone up by 1.25% for employers and employees. This is the worst time in history to have the highest tax burden in 71 years. The Chancellor talks about reducing taxes in 2024 by 1%. We should reduce taxes now, because businesses and consumers need the help now. What is the point of this Government having spent £400 billion, which is fantastic, to save our businesses and our economy and to have a vaccine programme that was world-leading? The tennis analogy is that we take a back swing—that is, we spend the £400 billion—and we hit the ball, but if we stop there then the ball will go into the net because you need to follow through to get it over the net. The Government need to be bold enough to follow through.

The Government have cut fuel duty by 5%, but our fuel prices remain some of the highest in the world. There has been support in the shape of VAT cuts on energy-saving materials. The energy Bill that the gracious Speech speaks about is great. Big and better nuclear is terrific and small modular reactors are fantastic. Working with countries such as India on solar will be great. The hydrogen investment road map is terrific. Investment in the energy-intensive industries compensation scheme is great. But we need to extend and broaden the recovery loan scheme. Do the Government agree? We need to create a growth guarantee scheme as a long-term replacement. Do the Government agree?

I sit on the advisory council of the Chancellor’s fantastic Help to Grow scheme for SMEs, but we need far more incentives for businesses to invest and grow. In green finance, we need to leverage North Sea production as the UK transitions, because going to net zero is not an on/off switch; it is a transition. Do the Government agree?

I believe hydrogen is the future. I am the chancellor of the University of Birmingham, which created HydroFLEX, the world’s first retrofitted hydrogen-powered train, up and running at COP 26—a great collaboration between universities, businesses and government to create world-beating innovation.

We have great clusters in this country. We had the Oxford/AstraZeneca vaccine, produced by AstraZeneca based in Cambridge in conjunction with the Serum Institute of India, the largest vaccine manufacturer in the world, which produced 2 billion doses of it.

The super-deduction is a great idea by the Chancellor, but it is being taken away in 2023. Do the Government agree that we need a 100% deduction for investment in

future? In innovation and R&D, we need to invest more than 1.7% of GDP. America and Germany spend 3.1% and 3.2% respectively. Just imagine if we spent at that level.

I shall conclude with this point. From the start of the war on 25 February, the CBI has been working with the Ukrainian ambassador and his team on a humanitarian basis, with medical products, ration packs and food boxes. No wonder the Edelman Trust Barometer has found that business is the most trusted institution. This is business as a force for good.

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