Business: Exports

Baroness Kramer Excerpts

Thursday 6th July 2017 Lords Chamber

[Lord Bates]

The noble Lord is absolutely right to point to the tremendous opportunities that are going to open up to the UK in global markets for exporting. We are very mindful of that. We also recognise, of course, that significant investment needs to be made in understanding the complexities of trade. I pay tribute to the work of the Export Institute, of which the noble Lord is a member. The apprenticeship levy is available across the United Kingdom. In England it is for companies to determine how that is spent and offset against budgets; it is for devolved Administrations to determine how it is spent, but I would have thought that any investment in training our young people in the opportunities in trade, in particular, would be money well spent.

[Baroness Kramer (LD)]

My Lords, this House will know that yesterday the EU and Japan agreed a free trade deal. Will the Minister tell us the cost to UK SME exporters and supply chain of exclusion from this deal?

[Lord Bates]

The EU agreed that deal with great support from the United Kingdom. We have made it very clear that we want to replicate such deals and potentially get even better terms for our markets. We have seen a tremendous increase in the value of exports over the past year—up by 5.8%, and up by 34.8% since 2010. We believe that we can do better than that outside the European Union.

Public Sector Pay Cap

Baroness Kramer Excerpts

Wednesday 5th July 2017 Lords Chamber

[Lord Bates]

The answer to the question is yes, but it is not a publicity stunt. These are serious matters that are considered very carefully, as has been the case on many occasions for a long time. Public sector pay is set out in the Budget and that advice is contained in recommendations that are sent to the independent pay review bodies. They make their recommendations and then the Government respond, normally by way of Written Ministerial Statement, as we have done already. The situation in which we find ourselves is one of significant debt. It is worth remembering that the interest that we pay on our debt would cover the NHS pay bill in its entirety each year. These are not therefore inconsiderable matters; we ought to bear them in mind and, at the same time, try to strike the balance between fairness to those public sector workers who do so much in our society and country and having regard for the taxpayers who are paying their salaries.

[Baroness Kramer (LD)]

My Lords, lifting the 1% public sector pay cap has been Liberal Democrat policy since 2015. Does the Minister agree that the pay cap was brought in to prevent losses and deflation at a time of fiscal crisis? It was never intended to be prolonged and to continue into a period of high employment and inflation and, therefore, should be ended.

[Lord Bates]

I seem to remember that when we were in coalition with the noble Baroness’s party, there was in fact a pay freeze for two years, which was then loosened to a 1% cap. We now want to move forward: there needs to be public sector pay restraint but we want to make sure that, through progression pay and other benefits, public sector work is recognised and rewarded.

Women: Board Membership

Baroness Kramer Excerpts

Monday 17th June 2013 Lords Chamber

[Baroness Northover]

I start by paying tribute to the noble Lord, Lord Davies, the noble Baroness’s colleague, for all that he has done to flag up this issue, and for the way in which he has driven it forward. He in turn has thanked the media for what they have done to make sure that this moves forward. He is absolutely right that we need to continue to make progress. There was an indication of plateauing. The situation now seems to be improving again. Business needs to show that it is making progress—as the noble Lord, Lord Davies, says—so that the Government can say that no quotas are needed. However, they are there as a back-stop.

[Baroness Kramer]

My Lords, my understanding is that the Government put a sword of Damocles over the industry by saying that if voluntary approaches—which I think we would all prefer—were not successful, they would look again at quotas. I believe that that was confirmed by both the Home Secretary and the Prime Minister. Will the Minister give assurances that the sword of Damocles is still in place and that the Government will be willing to let it fall if need be?

[Baroness Northover]

We are indeed pleased at the progress that is being made but the noble Baroness is absolutely right, as is the previous noble Baroness, that progress needs to continue. The Prime Minister said in February 2012 that further action has to be considered as a back-stop and Vince Cable said in April 2013 that the Government would, if necessary, adopt tougher measures. The warning is there. If there is continued progress, that is great. If not, there are sticks.

Economy: Growth

Baroness Kramer Excerpts

Thursday 21st June 2012 Lords Chamber

Moved by

[Baroness Kramer]

That this House takes note of the importance of the Government’s growth strategy for the United Kingdom economy.

[Baroness Kramer]

My Lords, this has been an extraordinary and very moving day. I suspect that many of us heard the speech of Aung San Suu Kyi and share the same reaction to it: namely, that we were listening to something very special being spoken by an extraordinary, charismatic person in a way that was both moving and powerful. That probably makes it difficult for us to speak in this debate in a sense. However, I suspect that we are also encouraged by the virtues that she underscored in her speech: namely, the importance of democracy and of the parliamentary process. We can comfort ourselves that in speaking today we are sharing that philosophy.

My colleagues and I sought to initiate this debate as the issue of growth is so important. I was delighted to see the list of speakers, each of whom has a great deal to contribute in putting forward ideas and suggesting priorities and ways in which to tackle this extraordinarily difficult issue for our economy.

The background to the debate is that in 2010 the coalition inherited a badly damaged economy. The previous Government had built their boom on the back of tax revenues pumped up by false profits from the banks—a bubble that burst in 2008—and on the back of consumer spending pumped up by excessive consumer credit and a huge bubble in asset prices, particularly house prices. I remember that in the other place my colleague Vince Cable pressed the need to deal with excessive public and private debt but was generally treated with some scorn. However, public spending spiralled out of control in around 2004. Even before the bank crisis struck, the UK had the highest budget deficit in the G7. The country had no cushion at all with which to deal with any economic shocks, and the shock came spectacularly in 2008. I think most would argue that devaluation of the pound and ongoing public overspending helped to provide an initial cushion, but by the 2010 general election the UK was on track to have the highest deficit in the G20 and Liam Byrne was not kidding when he left that note saying, “There is no money left”.

However, the fundamentals were worse. According to The Plan for Growth, under various Governments the UK had,

“stopped saving, investing and exporting”.

Savings rates had declined to some of the lowest in the developed world. Manufacturing had fallen sharply as a share of the economy. The UK’s share of the global exports market had declined, largely due to our inability to succeed in exporting to high-growth markets. Some of your Lordships have often remarked with astonishment that Belgium exports more to China than we do. Only 6.5% of our exports are to the BRIC countries. The economy had become dangerously unbalanced by both sector and geography. It was far too dependent on financial services, far too weak as regards manufacturing and economic prosperity was concentrated largely in London and the south-east.

Since then we have made some progress. The Government have taken a grip on the structural side of the deficit, using both tax increases and spending cuts. The talk is of austerity but the truth is a far more measured pace of deficit management. In some ways it suits my Conservative colleagues and the Labour opposition to overegg the reality of the rate at which the deficit is being tackled. We will not see deficit reduction in real terms until 2014 at the earliest. It is quite a measured programme and, ironically, if you were to look at the Labour programme outlined by Alistair Darling and the current programme laid out by George Osborne, you would not find a significant difference. I understand that it suits the parties to highlight the difference, but the reality is that we are moving in a fairly measured way.

It also pleases me that the burden has fallen most on the wealthiest 20%, as it should do. A good example is that while corporate tax has been cut to competitive rates, the starting point of income tax has been increased to take more than a million low earners out of tax altogether. This Government have put forward numerous schemes for growth, which include a boost to the enterprise investment scheme, enterprise zones, a doubling of apprenticeships to revive our skill base, £1 billion committed to the Youth Contract, £1.4 million invested in the regional growth fund, half a million pounds invested in the Growing Places Fund, and investment in the green investment bank that will reach £3 billion in this Parliament. The list is long and I suspect that I can rely on the Minister in his closing speech to add significantly more detail to it. The financial markets have responded and shown sufficient faith that long-term borrowing for the UK has fallen to lows unheard of in recent history. Most recently, one is looking at a rate of something between 1.5% and 1.7% for long-term borrowing.

Unemployment has been an ongoing concern, especially youth unemployment, and I suspect that Tuesday’s report of improvement, especially in the full-time jobs figures, will have pleased all noble Lords. I quote Brendan Barber of the TUC who said that it was,

“some long overdue good news”.

However, much more remains to be done, and it would be sad if we became in any way complacent. Whatever the outcome of the euro crisis, it will continue to be a drag on our economy for some time to come.

Like others, in responding to the issues that have been created in our economy, I have been interested to look at lessons from the 1930s. Recovery from the 1930s recession was not based on fiscal stimulus; and I say that because sometimes there is a myth that fiscal stimulus was the answer. That did not really occur until rearmament in the second half of the 1930s. Instead, devaluation and cheap money were key to recovery. In the UK, they led to a surge in housing construction. That strikes me as a useful lesson. Fiscal discipline has allowed the Bank of England room to use monetary policy, with significant QE so far, and I hope there will be more to come.

[Lord Foster of Bishop Auckland]

I am most grateful to the noble Baroness for giving way, but what is rearmament but public expenditure spent on arms, which creates jobs in the private sector?

[Baroness Northover]

Perhaps I may point out that we have a strictly time-limited debate; and if the noble Lord wishes to raise some points, perhaps he may seek to speak in the gap, and they can be answered in due course.

[Baroness Kramer]

I am happy to respond to that. It was exactly my point. Rearmament represented fiscal stimulus but did not come until much later when recovery was well under way. That is one of the important lessons for us—seeing how that recovery was achieved before fiscal stimulus came into the picture. As the noble Lord confirmed, it is an often-used myth that fiscal stimulus was the answer.

The equivalent today of cheap money has been quantitative easing and, to some extent, credit easing. As a consequence, we have had a weak pound, which, along with devaluation, has played a significant role in boosting manufacturing and exports that have carried us through several years at least, although they may not look quite as strong as they initially did. However, that played a definite role, and I am not trying to score party-political points but get back to how we deal with the issues.

However, I am very concerned that in attempting to access opportunity for growth, small businesses have found it extremely hard to get credit and lending from the banks. It is noticeable that in 1932, the banks worked and provided that credit flow to business. I would argue that we do not have that in the same way today. Effectively, we are looking at a banking system that is broken.

Because of all that, I welcome the Chancellor’s announcement of £80 billion for the Bank of England to provide what is now called “funding for lending”. If the banks prove capable of targeting the money at sectors such as small business and at home buyers who have the capacity and the appetite to invest, I think that it can make a difference in stimulating growth. However, my fear—I have expressed this before in this House—is that the banks no longer have that kind of knowledge base, the skills or the capacity effectively to reach small business. It is a custom business and it needs to be designed by people who really understand those to whom they lend. It is not a commodity business, and the banks that we think of as high street banks are essentially in a commodity business. Therefore, I urge the Government to look at RBS and Lloyds to see whether they can push a change in culture and approach so that those mechanisms are used to get the money to the small businesses that need it.

Small businesses provide something like half our GDP, and simply accelerating the plans that they already have for expansion and investment could have a significant impact on jobs and growth. I also say to the Government that, if there is more money for tax cuts, then tax cuts that would impact on the decision of small businesses to invest would be one of the best ways to use that money.

Housing also played a key role in the 1930s and I am sure that it can do so again. Once again—I have urged this before—I ask the Government to set aside a tranche of some of the credit easing for cheap funding schemes for housing associations, especially the small associations that cannot easily go to the market. One million pounds spent on housing repairs creates some 30 jobs. That is an amazing multiplier, and that is the kind of impact that I think we need to see now.

Nearly half a million unbuilt new houses have planning permission but the developers are holding off on construction. We need to tackle this because it could obviously provide a quick win. Land banking at this time is not an appropriate strategy. If financing is the problem, then this is a chance for the Government to tackle it. I am very glad that the Chancellor has now said that he will use the national balance sheet to try to unlock money for housing, as that could make a significant difference.

Pushing the lever on infrastructure spending can also happen through local government. The Local Government Finance Bill is on its way through this House. Tax increment financing is included in the Bill but is so constrained as to be minimal. I ask the Government to look again at tax increment financing, because each local authority has much low-hanging fruit in small infrastructure projects that could unleash new opportunities for growth with a very powerful multiplier effect.

Looking at the list of speakers in this debate, I can see that many colleagues on all sides of the House will be talking about growth in particular sectors—for example, tourism and the creative industries. Again, I think that a sector-by-sector approach to stimulating growth at this point would be powerful in assisting the economy. Therefore, I shall listen to those speeches eagerly to see what lessons can be learnt.

Earlier, we had a debate on social investing, social enterprise and the voluntary sector. That is a neglected area. In a sense, it has been the poor relation so far as concerns financing and investment. Now, there is potential in the City and other places to look at social impact bonds. What is also needed is a willingness by individuals to invest socially, so that, although they want profit, they give up an element of that profit in order to meet a social objective. Tapping into that will start to deal with some of the hardest-to-meet but quickest gains that we can achieve in our economy.

At the bottom of this, growth must be sustainable. It cannot be built on the back of another public spending bubble that will simply burst, and that seems to be the challenge facing this coalition. I shall listen eagerly to all the speeches because I think that it is the responsibility not just of government but of our two Houses more broadly to come forward with ideas that can provide the growth, jobs and prosperity that the country needs. I beg to move.

--- Later in debate ---

[Baroness Kramer]

My Lords, I will just very briefly thank the Minister for his commitment to take back many of these issues to the relevant parts of government and for giving us an indication that in quite a number of areas the Government are already thinking along the same lines as your Lordships. It is nice to come to the end of a debate with a positive conclusion coming from it.

I also very much thank all noble Lords who participated and brought real thought, knowledge and understanding to what we all agree is one of the most important issues facing us here today. I would say to the noble Baroness on the Labour Benches that we have perhaps a slightly different perspective on the issues around deficit reduction and the strategy that she outlined sounded a bit like a bubble and bust strategy, which would worry me indeed. It is easy to raise confidence, but then when it is destroyed again the damage tends to be deeper than the confidence initially created. But we can set apart partisan differences because most of the debate was so extremely constructive and reflected the real strength, knowledge and public interest motive that mark out the Members of this House, and I thank everyone who shared their thoughts today.

Motion agreed.

Equality: Pay and Opportunities

Baroness Kramer Excerpts

Thursday 8th March 2012 Lords Chamber

[Baroness Northover]

I pay tribute to the noble Baroness for her work in this area and for chairing the Women and Work Commission and its later update, which is an impressive piece of work. She will be aware that the trend is in the right direction. It is very marked. If you look at 1970, there was a 38.2 per cent gender pay gap and in 2011 it was 9.2 per cent. But we cannot be complacent and the issues that she has flagged up rightly identify some of the challenges that face women in work.

Under the universal credit, we will be extending the amount of support to childcare for those working less than 16 hours a week—so those working part-time—and that should assist 80,000 families. We are extending the right to request flexible working to employees. It is also extremely important to note that there are many more apprenticeships, often being taken up by women in later life so that they can more easily get back into work if they have taken time out.

[Baroness Kramer]

My Lords, my noble friend will be aware that students taking maths at A-level almost always go on to higher education and earn something like £17,000 more a year than their counterparts. That is true also for those taking subjects such as physics and engineering. What are we doing today to try to persuade girls that they can choose this route, which would very quickly close a great deal of the earnings gap?

[Baroness Northover]

My noble friend is absolutely right. Gender stereotyping in schools has tended in the past to direct girls way from the areas that she is talking about. The new National Careers Service will encourage girls and young women to challenge those stereotypes and encourage them to choose from the broadest possible career options. That includes providing good information, which girls, certainly from my experience, are very interested in, about the wide range of career opportunities that studying science and maths can lead to.