International Women’s Day

Baroness Northover Excerpts

Friday 8th March 2024 Lords Chamber

[Baroness Northover (LD)]

My Lords, I am glad that we have a debate for International Women’s Day and I thank the Minister for opening it. It was not always like this: the noble Baroness, Lady Gale, will recall her battles in the Labour period to ensure that we had this debate. I and some others joined her in that. I then needed to do the same in the coalition, and I said, “It’s automatic, or it should be”. As a Minister, I found myself opening or winding on several of these debates—which have become automatic. We owe a lot to the noble Baroness, Lady Gale, for making sure that this is the case.

As we heard, this debate is still very much needed. I am delighted that the noble Baroness, Lady Casey, has decided to give her maiden speech today. I need to insert a wild card here; I hope to be here all the way through. Anyone taking part in the debate knows that they must be here for the winding speeches, and will want to hear the answers to their points; but, on this International Women’s Day, my daughter is expecting a baby—a baby girl, we understand, but who knows? What is more, she sees her midwife at 11.30 this morning, who may hurry things along. For some reason known only to my daughter, she thinks that I am calm in a crisis. If things do move along, she wants me on hand. I am delighted and honoured to do my best to assist, although with some trepidation—but do not mention it to her.

Maybe this is a case in point. It has traditionally been women who have taken on key caring roles, and that has had an impact on their economic position. Much else flows from that. It will be my daughter who takes the lion’s share of parental leave. My son-in-law’s allowance is less generous; at least he gets leave—it used not to be the case—but it is not yet equality. What we need is properly paid parental leave for both parents. It is no accident that this has been happening in Scandinavian countries; that is where there is the best gender equality.

We know that there is no country in the world where there is full gender equality yet. The World Economic Forum’s Global Gender Gap Report 2023 shows this. The rate of progress has slowed between 2006, when the first edition of the report was published, and 2023. The UN’s gender snapshot of 2023 finds that, if current trends continue, more than 340 million women and girls will still be living in extreme poverty by 2030. Close to one in four will experience moderate or severe food insecurity. It is no accident that greater equality is connected to economic position.

I had the privilege, on behalf of this House, of attending the most recent annual Reykjavik Global Forum, which focuses on the position of women. The key necessities for greater gender equality were identified there as equal parental leave—meaning equal, properly paid parental leave—equal pay, equal representation and ending gender-based violence. It is circular: these need to be addressed if we are to secure greater economic equality, and greater economic equality helps to address these issues.

What has happened since we last debated the position of women in the world—besides my daughter being pregnant? In the UK, as worldwide, the cost of living has hit women harder than men. Has the Treasury done a gender impact assessment of the effects of the Budget and, if so, has it been published? I remember, as a DfID Minister in the coalition, needing to point out that the Treasury needed to do that gender impact assessment for the United Kingdom, just as we asked developing countries to do.

The Women’s Budget Group finds, for example, that single men will gain an average £500 more a year than lone mothers from the cuts to national insurance. More significantly, high inflation and cuts have eroded the budget for public services, meaning that unprotected services will see real-terms cuts in day-to-day spending, according to the OBR. That includes local government and justice. These cuts will impact women more than men, because they are more likely to use and work in local services. As for the justice system, we already know that rape cases, for example, have to wait years rather than weeks to be heard. It is appalling that this is likely to get worse, not better.

The situation internationally can be dire for many women and girls, yet we have cut our aid budget. The international development White Paper says that it puts women and girls front and centre but, without the wherewithal to deliver it, it is an empty promise. A key aim here must be to support sexual health and reproductive rights; they are essential to women, their families, communities and countries. In her reply, could the Minister tell us what ODA has been reinstated since the 80% cut?

We know that we face the major challenge of climate change. The poorest are the most vulnerable to climate change, women and girls especially. They often lack the resources required to adapt to the changing climate and ensure their protection. With increasing droughts, women and girls are expected to travel longer distances to collect water and firewood, exposing them to potential violence. The destruction of households and livelihoods and the loss of livestock and crops due to severe drought have become a reality for communities hard hit by climate change. As the climate and nature crisis accelerates, urgent action is needed to ensure that existing gender inequalities are not exacerbated.

In February 2023, the Government published their UN-required UK Women, Peace and Security National Action Plan. It recognises:

“Increasingly climate security and conflict are interlinked. Women”


and

“girls … are affected differently”.

It includes, as a priority, ensuring that gender is addressed, including through the use of international climate finance.

The FCDO’s March 2023 international women and girls strategy and its November 2023 White Paper both highlight the disproportionate impact on women and girls of climate change. Yet, a recent review of UK aid commitments to international climate finance by the Independent Commission for Aid Impact found that, despite the commitments, the UK has not done this. In fact, attention to gender appears to be decreasing. Perhaps the Minister can comment.

This century has seen an increase in the intensity and impact of conflict and violence on civilians globally, with Afghanistan, Ukraine, the conflict in Israel, Gaza and the West Bank, and Sudan. The Mines Action Group reports that about 80% of the victims of small arms and light weapons are women and children. Our development budget and strategy should not just say that it recognises this but translate that into the necessary actions.

We need to ensure that there is far greater economic equivalence between men and women, whether in the UK or globally. We also need to ensure that there are more women in positions of leadership, as the noble Baroness, Lady Gale, has just said. In Reykjavik, I heard one Icelandic Minister say, “Women are often told that they are too young, too old, too single, too married, with not enough experience or with too outdated experience to be leaders”. Does that sound familiar?

There is so much that we need to do. We are not on track either in the UK or worldwide. I look forward to the contributions of others and to the Minister’s reply to this debate, and I cross my fingers that my new granddaughter stays just where she safely is, at least for the moment.

Financial Services and Markets Bill

Baroness Northover Excerpts

Report stage
Tuesday 6th June 2023 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, I have added my name to Amendment 15, tabbed by the noble Baroness, Lady Hayman. It aims to ensure that the conservation and enhancement of the natural environment are included in the regulatory principles of the regulators. Like the noble Baroness, I would have preferred another secondary—what is the word?

[Baroness Northover (LD)]

Objective.

[Lord Vaux of Harrowden (CB)]

Yes, objective, thank you. But we are where we are.

The noble Baroness has already explained this with her usual skill, so I shall not repeat what she has said. However, I am sure that I am not alone in experiencing a feeling of déjà vu in even having a debate on this subject. The noble Baroness, Lady Hayman, has given similar excellent speeches on multiple occasions now— I am really quite amazed by her patience. All this amendment tries to do is ensure that government policy is embedded in the activities of the regulators, yet we seem to have the same debate on so many Bills. Each time, generally, the Government give way—and rightly so. I think that the most recent occasion might have been on the UK Infrastructure Bank Act. Frankly, if it makes sense to accept this for that bank, how much more sense does it make to accept it in respect of the entire financial services industry? Surely, it is time that all Bills to which the impacts of environmental change and risk are relevant should include these clauses by default. It really should not be up to this House to ensure that the Government apply their own policies. So I hope that the Minister will follow the multiple precedents and accept Amendment 15.

The Minister introduced Amendment 4 on SDRs, which is extremely welcome, but it is only a “may prepare” clause, not an obligation, and there is no timeframe included. Frankly, it could have gone an awful lot further.

I add my support to Amendment 91, which seeks to introduce a new due diligence requirement for regulated persons to ensure that the forest risk activities that they wish to finance or otherwise support are in compliance with local laws. I am sure that the Minister will refer to creating undue burdens on regulated persons, which seems to be the usual argument in these things—but the amendment leaves the level of required due diligence for the Government to decide and regulate, so I am not going to be terribly impressed by that argument. To put it simply, our financial services industry should not be financing illegal deforestation activities.

I also strongly support Amendments 93 and 113, which seek to ensure that the impacts on climate, nature and society are properly considered by occupational pension scheme trustees, and that the FCA may publish guidance in that respect. Noble Lords with much more experience in this area than myself have spoken to that at length. Pension funds are by their nature long-term investments and systemic in size, so it is especially important that these issues of sustainability are considered fully by pension schemes. I hope, perhaps forlornly, that the Minister will look favourably on these amendments, but particularly on Amendment 15, which seems self-evident to me.

[Baroness Northover (LD)]

There have been a number of powerful contributions in this group. I add my voice as a signatory to Amendment 114. My noble friend Lady Sheehan will speak to others in this group, which we also support from these Benches.

The noble Baroness, Lady Wheatcroft, very ably made the case for Amendment 114, which seeks to give the powers to Ministers and regulators to legislate for sustainability disclosure requirements along the whole length of the investment chain. As she indicated, although we obviously welcome the fact that the Minister has brought forward Amendment 4, this simply does not match up to what needs to be done and what the Government, as others have said, say that they wish to do. We know that some change is already being driven—for example by the disclosures that are now required under the task force on climate-related disclosures. We know that the International Sustainability Standards Board continues its important work, with the involvement of Mark Carney, and we hope that the Government will adopt its recommendations—they are currently equivocal about that.

We urgently need the guardrails that Chris Skidmore recommended were required to reach net zero by 2050. The Government have made repeated commitments, as we have heard, to legislate for sustainability disclosure requirements and in these other areas to which noble Lords have referred. Amendment 114 and all the others help to deliver what the Government say that they wish to do. The noble Baroness, Lady Hayman, beautifully outlined how the other amendments also help to deliver for the Government on what they say that they wish to do. Therefore, I support this amendment and the others.

Financial Services and Markets Bill

Baroness Northover Excerpts

2nd reading
Tuesday 10th January 2023 Lords Chamber

[Baroness Northover (LD)]

My Lords, I too congratulate those who have just made their maiden speeches. Their expertise will be very welcome. The most reverend Primate the Archbishop of Canterbury spoke of values; others have made it clear that values and self-interest can and should be aligned.

My focus here will be on climate change and the transformative role the financial services sector can and must play in combating this. My question is therefore whether this comprehensive Bill helps to deliver the UK as a green finance centre, as the Government have promised. I noted that the Minister emphasised in her speech that our financial services need to be open and green, as well as technologically advanced.

We are familiar with the pledges agreed by Governments in 2015 in Paris, seeking to keep global warming below 1.5 degrees. We know how far we are from meeting that. Developed countries’ money and pledges are vital but will not deliver on the scale required. A key change that occurred at the Glasgow COP in 2021 was business and finance becoming involved, with outstanding leadership from Mark Carney. That is potentially transformative.

As the noble Baroness, Lady Hayman, pointed out, at COP 26 the Government committed to creating the world’s first net-zero-aligned financial centre and announced that they would mandate large companies to publish their net-zero transition plans and climate reporting standards. Rishi Sunak described the UK as

“the best place in the world for green finance”.

As a trade envoy, I noted the high reputation of the City of London. It needs to maintain that leading role. The Government also committed to match the ambition of the EU on green finance, with particular reference to disclosures of sustainability impacts and the development of a green taxonomy. The UK became the first G20 country to mandate its largest companies to disclose climate-related data.

At COP 26, the International Sustainability Standards Board was announced, to seek global harmonisation in this area. The UK needs to continue to play a leading role in that. Consumers, the public and investors are increasingly scrutinising the green credentials of companies and looking at what banks and funds are investing in. This is where the world is heading. The noble Lord, Lord Ashcombe, has just made clear that the insurance industry is already addressing this. Just as we have seen that the decision to end the sale of new petrol and diesel cars by 2030 has given a major boost to the EV sector, because the automotive industry can see which way it needs to head, the same clarity of intention is required in the financial sector. We need to ensure that regulation shows the direction of travel.

As Chris Skidmore has said in relation to his net zero review for the Government, we may be committed to net zero by 2050, but are the guardrails in place to deliver that? Those guardrails must include regulation. Therefore, what do we see in this legislation? As others have pointed out, the Bill states that regulators should only “have regard” to climate goals. There are seven other principles to which the regulators must also have regard. These are subsidiary to the strategic and operational objectives, as the noble Lord, Lord Vaux, my noble friend Lady Sheehan, the noble Baroness, Lady Hayman, and the right reverend Prelate the Bishop of St Albans have all pointed out. That must be addressed as this Bill goes through.

Shortly before this Bill was announced, it was reported that the Government had removed from the Bill the expected sustainable disclosure requirements. These would have required large companies and financial institutions to disclose and justify their environmental impacts, their alignment with the UK’s green taxonomy and their net zero transition plans. With the publication of their Greening Finance road map in 2021, the Government reaffirmed their commitment to developing a green taxonomy and sustainable disclosure requirements, yet these are delayed.

In the meantime, the EU has legislated in this area. We have already fallen behind, despite the Government’s declared ambitions. HSBC has just announced that it will no longer finance new oil and gas fields. That is the future. Others need to do likewise, with the transformative effect that will have. Regulation can spur that on. This Bill, replacing EU regulation with specific UK regulation, needs to make sure that the UK and London are forward looking, leading the way, modern and drawing in green investment and jobs. I can assure the Minister that there will therefore be amendments to this Bill in this vital area, so I suggest that she starts writing round now.

Children and Vulnerable Adults: Abuse

Baroness Northover Excerpts

Thursday 26th June 2014 Lords Chamber

[Baroness Northover (LD)]

My Lords, I, too, thank my noble friend for tabling this important topic for debate today. As other noble Lords have said, the fact that the reports on Jimmy Savile’s reign of abuse have been published today shows how extremely timely it is and how we must all be vigilant to ensure that everyone, however old, young or vulnerable, can live free from abuse and neglect. The noble Baroness, Lady Howarth, explained that that often happens in the home or in familiar places with familiar people.

In all respects, we must counter abuse, as my noble friend Lady Walmsley said, through culture change, or legislation, regulation and training. We need to support professionals in this difficult and complex work—I pay tribute to them, as did the noble Baroness, Lady Howarth—but we also need to challenge them and agencies to do the right thing and act quickly when things go wrong. That also means holding people and organisations to account. We also need to be aware of the cultural shifts, such as those manifested and driven by the expansion of the internet, as the noble Baroness, Lady Howe, and others mentioned.

There is a well established legislative framework for social care and support for children set out in the Children Act 1989, including the duties of local authorities in relation to children in need in their area, as well as their child protection duties, but we know that child protection does not always work as effectively as we would want. As the noble Lord, Lord Bichard, noted, continued and repeated serious case reviews and other investigations provide stark reminders that there is much more to be done. He is right about ensuring that we learn from them.

The right reverend Prelate the Bishop of Durham noted the long history of abuse in our institutions, whether schools, hospitals, the police or even churches. My honourable friend the Minister of State for Crime Prevention, Norman Baker, is leading a national group of experts urgently to address missed opportunities to protect children and vulnerable people. He is assisted by members of the NSPCC, Barnardo’s and Rape Crisis. The group is looking at lessons that could be learnt from recent and current inquiries to see what should be taken forward.

There were noble Lords on either side of the question of holding a public inquiry. I note what the noble Baroness, Lady Howarth, and the noble Lord, Lord Bichard, said, about following through on the reports that we already have, but I also noted what the right reverend Prelate the Bishop of Durham said. What it comes down to is that nobody is satisfied with where we have got to; we have to ensure that we do better.

The noble Lord, Lord Stevenson, mentioned Professor Eileen Munro’s review of the child protection system in England and her report in 2011, with all her recommendations. Most of them have been implemented. In the Working Together to Safeguard Children statutory guidance, we have focused more clearly on the core legal requirements that all professionals should follow so that children are kept safe. We have also sought to put the needs of individual children back at the heart of the assessment process by removing the requirement to have separate initial and core assessments.

As noble Lords are clearly well aware, changes to the overarching framework on their own are not sufficient to ensure real improvement on the ground. That is why improvements to social work practice are crucial. For the first time, a Chief Social Worker for Children and Families has been appointed in England to provide independent, expert advice to Ministers on social reform and act as a leader for the profession.

Following Sir Martin Narey’s review, we are taking forward a number of reforms to improve the calibre and confidence of the workforce by improving social work training and developing further the skills of existing social workers via programmes such as Step Up to Social Work and Frontline. The new Ofsted single inspection framework looks at the child’s experience from the point of needing help and protection right through the system. In addition, CQC has also introduced a new programme to inspect local health service arrangements for these groups, and we are planning further improvements, with multiagency inspections due in 2015. By ensuring that serious case reviews are published we are seeking to improve public accountability where there have been failures to keep children safe.

The new children’s social care innovation programme should help us to support the development, testing and sharing of new and effective ways of supporting children who need help from children’s social care services. My noble friend Lady Walmsley rightly emphasised the need for research and practice to be evidence-based, a point that the noble Lord, Lord Bichard, echoed. My noble friend Lady Walmsley commented on the Government’s consultation on the outsourcing of children’s social care functions. Following that consultation, as she noted, we announced last Friday that profit-making organisations would not be able to take on outsourced functions, including those relating to child protection, and draft regulations have been amended accordingly.

The issue of mandatory reporting was raised by my noble friend Lady Walmsley, the noble Baroness, Lady Hollins, and others. This is one of a number of possible future approaches that the Government are considering. The Government are reviewing the specific case for mandatory reporting in regulated activity and the Home Office is looking across government at options to strengthen the system. I note the comments of the noble Baroness, Lady Howarth, and the noble Lord, Lord Bichard. I hope that the noble Lord will be reassured that we will continue to examine the evidence on this, both nationally and internationally.

My noble friend Lady Walmsley mentioned PSHE and how it could help to protect individuals. We believe that all schools should teach PSHE, drawing on good practice. My noble friend Lord Paddick spoke about victims and survivors and the need to believe them. The Crown Prosecution Service published final guidelines on prosecuting cases of child sex abuse in October 2013, setting out a new approach to dealing with the particular issues that differentiate these cases. Focusing on the credibility of the allegation rather than the credibility of the individual is a significant cultural shift which recognises and addresses the particular vulnerability of some of these potential victims. We published the new victims’ code in December 2013. I hope that my noble friend Lord Paddick has seen it and feels that it is a positive move.

On health services, the Government’s mandate to NHS England sets it an objective of continuing to improve safeguarding of both adults and children in the NHS. One issue that has come up here is making sure that information sharing is done early and systematically. This was emphasised by my noble friends Lady Walmsley and Lady Sharp, the noble Baroness, Lady Hollins, and others. We know that early information is the key to providing effective early help where there are emerging problems. No professional should assume that someone else will pass on information which they think may be critical to keeping someone safe. We have recently rolled out the first wave of sites on the child protection information sharing project. This aims to help health professionals to make clear, timely judgments on potential safeguarding concerns and enable more rapid contact with children’s social care. We have emphasised in statutory guidance, Working Together to Safeguard Children, that effective sharing of information between professionals and local agencies is essential.

For adults at risk of abuse and neglect there needs to be a keen focus on the quality as well as the length of life. I note what my noble friend Lady Browning said about the quality and valuing of staff and about training them so as to ensure that they are looking after people with empathy. We need radical reform of how health and social care are experienced and delivered. The Care Act 2014 starts this process by providing a legal framework placing the well-being principle, prevention and early intervention at its heart. However, we are under no illusion that legislation alone will eradicate the type of behaviour that leaves people feeling distressed, frightened and humiliated. This can be realised only through a change in culture that leaves no tolerance of abuse, supports individual and collective responsibility for detecting abuse and challenges corrosive practices.

With services, people must be held to account for the quality of care that they provide. We are taking measures to ensure that company directors who are complicit in, or turn a blind eye to, poor care will be liable to prosecution. In future, they and provider organisations could face unlimited fines if found guilty. This could provide additional incentives for the effective management and support of staff—and those staff must be properly valued, as the noble Baroness, Lady Hollins, and others have argued.

Systems and processes are already in place to provide public assurance, including the Care Quality Commission registration requirements and the Disclosure and Barring Service. I note what my noble friend Lady Walmsley and the noble Lord, Lord Bichard, have said about the falling numbers of people barred from working with children. We note that, and the Government are currently reviewing the position. When we conclude, I am sure that noble Lords will be interested in what we have found. However, those processes alone do not go far enough. That is why, following the publication of the Francis report into the failings of Mid Staffordshire, we asked Camilla Cavendish to review how healthcare assistants and support workers in health and care settings were valued and supported. We are also considering the proposals in the Law Commission’s review very carefully.

My noble friend Lord Eden and others will be interested to know that the introduction of a certificate of fundamental care, the care certificate, will, we hope, give clear evidence to employers, patients and service users that the person in front of them has been trained to a specific set of standards and knows how to act with compassion and respect. Health Education England, working alongside key partners, has already begun piloting this across England. Subject to evaluation, there will soon be a standard national approach to training on the skills and values needed to be an effective healthcare assistant or social care support worker. It is planned to roll this out in March 2015.

As with children’s social care, we recognise that the system of regulation and inspection for adults needs to improve; I hear what my noble friend Lady Sharp said. The CQC is currently introducing a new system of inspection of social care providers, based on much tougher fundamental standards of care, which places the individual at its heart. It will be structured around five key questions that matter most to people: are services safe, caring, effective, well led and responsive to people’s needs?

New measures in the Care Act make clear the responsibilities of local authorities and key partners, such as clinical commissioning groups and local police, in safeguarding adults. This is vital in ensuring clear accountability, roles and responsibilities for helping and protecting adults who are experiencing, or at risk of, abuse and neglect. The Department of Health is working with the College of Social Work, the Social Care Institute for Excellence, the College of Policing, Health Education England, Skills for Care and others to ensure an integrated approach to adult safeguarding that is reflected in the training that different staff receive.

In response to my noble friend Lord Eden, who made an important point about the contribution that carers make, the Care Act 2014 gives carers parity with those using services. I also mention to the noble Baroness, Lady Howarth, and my noble friend Lord Thomas that a review was recently conducted looking at ways in which to reduce the distress to victims of sexual violence in trials. The Crown Prosecution Service has set up a network of specialist prosecutors, and only advocates from that panel can be used to prosecute child sexual abuse cases. All judges receive training that includes the treatment of vulnerable witnesses, and no judge involved in a serious sexual offence case, whether the child is a victim or a witness, can do so without being specially authorised to do so by the senior judge. I listened with care to what my noble friend Lord Thomas said about sexual offences right across the age range.

Finally, on the point of child sexual exploitation, we have established a national group that seeks ways to prevent sexual abuse happening in the first place. In relation to the report from Barnardo’s, we remain committed to ensuring that all necessary legislation is in place to tackle child sexual abuse. We welcome the recent inquiry and we are reassured by the conclusion that there is no evidence to show that justice could not be served due to a lack of a specific child sexual exploitation offence. We are considering its findings and wider recommendations and deciding how they can inform the national group’s ongoing work.

There have been many important contributions in this very thoughtful debate and I will make sure that this debate is flagged to my colleagues both in the Department of Health and the Department for Education. I will also write to noble Lords on specific points that I have not covered here. These are very important and interlinked issues but, in essence, it is indeed, as was mentioned before, about how civilised we are. It is about how even the most vulnerable in our society should feel safe and cared for and, as my noble friend Lord Eden put it, we must be more aware of our common humanity.

Banking Reform

Baroness Northover Excerpts

Thursday 14th June 2012 Lords Chamber

[Lord Rees-Mogg]

My Lords—

[Baroness Northover]

My Lords, to be fair, it is actually the turn of the Labour Benches. If they are happy, then we will hear from the Cross Benches first before hearing from the Labour Benches. I think that the noble Lords have given way.

[Lord Rees-Mogg]

We were just brewing up to have a very satisfactory little argument about the Glass-Steagall Act. The important thing about it is how long it lasted; it was passed by the Senate in the 1930s and ultimately repealed by President Carter, who had been persuaded to do so by Wall Street. Its great virtue was that it identified more clearly than previous legislation, and more clearly than most subsequent legislation, the difference between retail bankers and what you could call casino bankers, and put different responsibilities on them. That protection worked. If one went, as I did, to Wall Street in the 1950s, one found that Wall Street had come to the conclusion that it was not going to have another slump, primarily because of that Act but also because of the wartime Bretton Woods agreement, which was masterminded by our very own Maynard Keynes. This is a consistent fruit. The set of ideas that were developed in response to the crisis of the early 1930s worked their way through the financial body and the intellectual body, and gave us what we are now looking for—a restabilisation of our own economy in its own terms.

Economy: Growth

Baroness Northover Excerpts

Thursday 31st March 2011 Lords Chamber

[Lord Flight]

My Lords, first, I congratulate the noble Lord, Lord Hollick, on initiating what I think has been a very constructive debate. I also congratulate all the maiden speakers on their excellent contributions. I feel passionately that this country should do better. I am a lover of its history and I observe what has happened in the past: how self-help, a strong work ethic and a dissenting culture got industry and commerce going in this country. We have had interesting contributions today from the noble Lords, Lord Kestenbaum and Lord Popat, on the importance of the entrepreneurs from the immigrant communities. In the past, it would have been Huguenots and others.

I do not think that there is perhaps such agreement on the conditions that are likely to see us doing much better and that saw us doing so well in the past. I am no apologist for it, but I think that they are essentially to be found in capitalism. I have lived and worked in Hong Kong and I have been a great follower and lover of India. I observe how both of them, India latterly, have done so incredibly well. Living standards in Hong Kong are now much higher than here as the result of a much more open capitalist economy where entrepreneurs can prosper. In my textbook, if the public sector is much more than 40 per cent, you are heading for trouble, and in my textbook, if small businesses are tied down by too many regulations, they will not prosper. I was particularly interested in the speech made by the noble Lord, Lord Mitchell, about Brick Lane. Indeed, that is exactly the sort of entrepreneurial new area colony we want to see. I am glad it has happened, but I think it has more to do with good luck than a perfect environment.

I do not believe that any government-contrived go-for-growth policy will work. The Heath Government tried it and it ended in disaster. Governments can make the right environment for the economy to do better, and this Government are doing pretty well at it, but there are no government quick fixes.

Productivity growth in the past decade fell by 25 per cent, from 2 per cent to 1.5 per cent per annum. I regret to comment that it was very obviously the result of the overexpansion of, and negative growth in, the public sector. The poor old private sector was having to run faster and faster and was being squeezed by resources going to the public sector. The coalition Government have got things pretty well right. On the whole macro issue of keeping our credit-worthiness, they have succeeded. I would have liked there to have been no increases in tax—if anything, tax cuts—and more radical sorting-out and reform of the public sector. I return to my main point: you will not get the economy going if you go round putting up taxes too much.

However, the trends do not look too bad. Corporate profitability was up 37 per cent last year—admittedly, on a terrible previous year—and it was remarkable that 420 jobs were created in the private sector in a year that none of us thought was particularly encouraging. It is clear that we are set for exports and capital investment to lead growth and for, I hope, an economy that will have a higher savings and investment basis to support it.

I want particularly to rebut what I am afraid I view as rather Luddite and misguided economic attacks on the financial services sector. The main criticism is of two individuals whose reckless behaviour led two major banks into bankruptcy and to a failure of monetary policy—for which the Bank of England was responsible —and of regulatory policy. But banks are not the whole financial services sector by miles. It is surely appropriate that a mature economy such as the UK should have a large amount of activity in that sector—I might add that it is a great deal larger in Hong Kong. The biggest bank in the world, HSBC, came through it all without any trouble and any need for public sector or taxpayer support.

Let us remember that that industry generates some £100 billion of exports, some 1 million jobs and £55-odd million of tax revenues, and that London contributes something like £50 billion a year to the rest of the economy. London has been the great success of this country.

[Baroness Northover]

I remind your Lordships that this is a time-limited debate and that when you hit four on the clock, you have had four minutes.