United Kingdom Internal Market Bill

Lord Flight Excerpts

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020 Lords Chamber

[The Deputy Speaker (Lord Lexden) (Con)]

My Lords, I now call the noble Lord, Lord Flight.

[Lord Flight (Con)]

My Lords, I apologise for having to move my timing, but I had to get something urgently for my wife.

--- Later in debate ---

[The Deputy Speaker (Lord Lexden) (Con)]

I apologise. The noble Lord, Lord Flight, told me that he was here at the start of the debate, but that is not so. I am sorry, Lord Flight. In that case, I cannot call you, as you were not here at the start of the debate.

[Lord Flight (Con)]

I am certain I was.

[Lord Fox (LD)]

My Lords, the debate on this amendment has been relatively short, but the Minister should not conclude from that that it is unimportant. The reason why the debate has been short is that it crystallises points that have recurred since Second Reading, through Committee and in various discussions on other groups of amendments, around the basic suitability of the CMA as a home for the OIM. That is the central point.

I am pleased to follow the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, whose analysis of the concerns around the location of the OIM I completely concur with. They conclude that they do not necessarily like the full nature of this amendment, and I respect that point. This amendment is the culmination of several other attempted amendments but, without it, we will not get the focus on this issue that we need from the Minister. Even though it may be a bitter pill to swallow for the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, we need to get somewhere to concentrate minds—and this is the amendment.

It was ably set out by my noble friend Lady Bowles, and I know that the noble Lord, Lord Stevenson, will also set out a good case, so I will not point to any more issues. I simply say that this is a really important issue, which will colour the culture of the market in this country and how it is run. I had not considered the point brought up by the noble Baroness, Lady Noakes, that it may also jeopardise the CMA’s current role, which is a good point and well made. This is an important amendment to get behind. Noble Lords on the Liberal Democrat Benches will vote for this amendment when it is put, and I hope that other noble Lords, who find problems with some words in this amendment, will stave that to one side and consider that, without it, we cannot change the culture of how the market will be run in future.

United Kingdom Internal Market Bill

Lord Flight Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020 Lords Chamber

[Lord Naseby (Con)]

My Lords, I have a couple of probing questions. I find the word “school” difficult to work out in terms of what happens on the ground. There are universities, many of which have teachers—some have professors, et cetera—and I do not quite see how you can exclude them, particularly the Open University, where some noble Lords may have taken courses. I have friends who have taken courses at it and, from the evidence of two people I spoke to at the weekend, there are teachers there. As someone who takes an interest in flying, having flown in the RAF, I thought also of flying schools. There are also driving schools. I am not sure whether the Government are anticipating that whole area. I look forward to my noble friend’s response; if she cannot respond this evening, perhaps I could have a note in writing.

[Lord Flight (Con)]

My Lords, I am not clear what being “excluded” means. I do not know whether other territories are excluded or how far they go up and down the range of teachers. More particularly, what is the reason for having excluded groups? Why should lawyers be excluded? Are any other groups excluded? This area wants a bit of tidying up and further explanation.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to those who have spoken in this debate, because we have all narrowed into one area on which we are seeking some clarification: the distinction between the language in the Minister’s email referring to the teaching profession and that in this amendment, which are not the same.

If the Government’s intention with the amendment is that they wish to exclude the teaching profession from the provisions, that will be universally welcomed. At this stage, therefore, from these Benches I thank the Government for listening to the debate in Committee and for acting, and also for engaging with the various stakeholders, primarily in Scotland and Wales. I am also grateful to the Ministers, the noble Lords, Lord Callanan and Lord True, for listening and acting on meetings that I and my noble friend Lord Fox had with them, at which we raised these matters, on which we had been in correspondence.

That said, some further clarification on specific points would be helpful. As my noble friend Lord German indicated, the reference in the government amendment to the profession of “school teaching” is not really language that is used. It is certainly not used by the General Teaching Council for Scotland in registering teachers, and clearly it is not used in England, although I thought that perhaps it was. I searched “school teaching” on legislation.gov.uk, but, to my knowledge, it is not used in any legislation, although I am sure that officials in the Box can clarify that for the Minister. It does not seem to be a term, so we might find ourselves inadvertently creating a new term or definition in this legislation. I am sure that this can be tidied up but, if we agree to this amendment, as we will, I will be grateful to know how the Minister intends to do so.

To give an illustration, the General Teaching Council for Scotland registers those who seek to be teachers in primary or secondary education, those who want to be registered as teachers for additional support needs or in named schools only, and, since 2017, college lecturers and those who teach in independent schools. Therefore, in the categories of teaching within the overall teaching profession, at no stage does the term “school teaching” apply.

I will give the Minister an example of why “school teaching” is problematic within the context of Scotland. Innovations that the Scottish Parliament brought in when I served on the Education Committee meant that there is now much more blended learning in Scottish secondary schools. Students who are nearing the end of their time in secondary school can now start to study for further education qualifications on practical courses provided by college lecturers within the school setting. That is very progressive and is working. An inadvertent difficulty might be that we create a false distinction between those who simply teach within a school setting and those who are in the profession of school teaching.

I hope that the Minister will be able to clarify the points that have been raised about the difference between the categories and that she will set out the intention behind the amendment. If it is the intention that the registry bodies—in their functions of carrying out the registration of teachers and in setting standards and qualifications—are excluded, that will be reassuring. I think that that is the intention behind the amendment. I hope that it is, and if the Minister is able to confirm it, that will be reassuring for many of us.

Covid-19: Small Businesses

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Thursday 29th October 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Lord is right to say that these schemes are essentially short-term but we are doing an awful lot to kick-start the economy. The Prime Minister has referred to the need to build back better and we are investing substantial sums. However, we of course keep these matters under constant review.

[Lord Flight (Con)]

What support are the Government considering providing to businesses set to face lower demand during the winter because of Covid-19 restrictions?

[Lord Callanan (Con)]

Our winter economy plan builds on the significant support available, with the extension of the coronavirus loan guarantee scheme until 30 November, the introduction of the job support scheme from November and the extension of the self-employment income support scheme.

Covid-19: Financial Support for High Street Retailers

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Tuesday 27th October 2020 Lords Chamber

[Lord Flight (Con)]

My Lords, can the Government consider placing out-of-town retailers on a comparable basis to high-street retailers with regard to business rates? There has long been a perceived position of overtaxing high streets and undertaxing out-of-town businesses.

[Lord Callanan (Con)]

My noble friend makes an important point. Business rates are based on the rateable value of non-residential properties, and rateable value is a measure of the property’s annual open-market rental value, as assessed by the Valuation Office Agency. Clearly, with the move towards out-of-town shopping centres and online retailers, this is an area ripe for urgent review, and we are doing that.

United Kingdom Internal Market Bill

Lord Flight Excerpts

2nd reading & 2nd reading (Hansard): House of Lords
Monday 19th October 2020 Lords Chamber

[Lord Flight (Con)]

My Lords, the justification for this Bill is to support and advance trade, and, as pointed out, to provide insurance against present negotiations breaking down. The existing internal market is supported by EU law until the end of the year, where this Bill provides for UK law to take over. This is a detailed Bill, which provides for what I call single market membership in respect of our trade with the rest of the EU, if we reach agreement with the EU to this end.

The question is raised; what happens if trade negotiations break down and the UK opts for the WTO? This looks unfortunately likely, from the Prime Minister’s comments yesterday, to be the case. It is clear, I am afraid, that the EU has been acting in bad faith in the trade negotiations, which the PM has pointed out involved a requirement to lead, and not a requirement to lead to a breakdown.

Presumably we could amend and use the Bill as we saw fit. We would, however, have a self-interest to make the Bill as helpful as possible to European importers and exporters to help optimise our trade. As we are leading historic free trade supporters, I am sure we will be happy to be driven by the free trade principles of mutual recognition and non-discrimination. The Bill will become an Act as of 31 December, assuming it passes both Chambers. Whether or not we do a trade formula deal with the EU, this trade legislation will be on the statute book and operative to ensure the smooth functioning of trade.

I turn now to the controversy. It was the UK Government who found out that the EU was seeking to misuse aspects of the Northern Ireland protocol in a way that was not intended and in order to gain advantage in future relationship negotiations. I am somewhat disappointed that no one seems to have made this point, and the whole problem with Clause 5 arises from that. It was for this reason that the UK Government created the safety net of Clauses 44 and 45, to give British Ministers the power to unilaterally interpret, modify or disapply parts of the Northern Ireland protocol.

The UK has agreed to require parliamentary approval of any government initiatives involved here—I think that this is Clause 56. I was always told as a student that there was really no such thing as international law, as there was no agreed single court of law to monitor it. But, in this situation, I am inclined to the view that it may be better to get rid of Clauses 5 and 6 and to address the issues raised in another way.

I remain a staunch supporter of free trade and appreciate the major contribution to upholding free trade afforded by the Internal Market Bill, but it has the weakness of underpinning oligopoly. Most of the trading requirements as witnessed by this legislation are too detailed, too difficult, too expensive and too demanding of businesses—

[Baroness Scott of Bybrook (Con)]

Will the noble Lord wind up, please?

European Structural and Investment Funds Common Provisions and Common Provision Rules etc. (Amendment) (EU Exit) (Revocation) Regulations 2020

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Wednesday 16th September 2020 Grand Committee

[Lord Flight (Con)]

My Lords, this statutory instrument revokes legislation laid in 2019 that would have guaranteed structural funding in the event of a no-deal exit. Under Article 138 of the withdrawal agreement, the UK will continue to have access to the ERDF, ESF, EAFRD and EMFF until the end of the current multiannual financial framework, the term 2014-20. Funding cycles typically last up to three years, with closure taking up to another three years, so some ESIF projects will continue expenditure through to December 2023.

The UK will not be pursuing participation in future ESIF programmes, including ETC health, in the MFF 2021-27 period. The UK will participate in ETC peace plus for 2021-27. The UK shared prosperity fund, the UKSPF, will succeed the ESIF for new programmes. BEIS originally laid an SI in March 2019, SI 625, which removed the EU regulations for structural funds from UK law in the event of a no-deal exit. Unreplaced, it would now come into force on the last day of the transition period. BEIS is seeking to revoke that no-deal regulation because it is not compatible with the arrangements set out under Article 138 of the WA.

As already pointed out, the no-deal SI 625 disapplies the regulations for ERDF, the ESF and ETC when it comes into force at the end of the TP, while the WA maintains the same regulations until the programme closure. If SI 625 were kept, it would confuse the statute book. It is currently planned that the UK shared prosperity fund will replace the EU structural funds with funding realigned to match domestic priorities. At a minimum, it will match current levels of funding to each nation from the EU structural funds.

I apologise for reading out the abbreviations for the titles of various bodies, but there is not time to read the whole lot in full.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

The noble Earl, Lord Clancarty, has withdrawn, so I call the noble Lord, Lord Naseby.

Corporate Insolvency and Governance Bill

Lord Flight Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 9th June 2020 Lords Chamber

[Lord Flight (Con)]

My Lords, I first draw attention to my entry in the register as chairman of Flight and Partners, which is a recovery fund.

The Government’s intentions for this Bill are well meant and are to help businesses survive. My concern is that its impact could be substantially contrarian and would damage, in particular, the SME sector. The Bill is being fast-tracked through Parliament with the consultation process being crammed into six weeks. Temporary measures in response to the crisis can be amended, but the worry is over the more complicated, permanent parts of this legislation.

The main measure is the new company moratorium, which gives a 20-day moratorium from anyone bringing an action and which can be extended by a further 20 days. We already have the notice of intention where directors can put down a notice of their intention to appoint an administrator. This needs the agreement of secured creditors and protects the company from any creditor issuing a winding-up provision. The NoI lasts for 14 days and can be extended. It has worked well in the SME space, the key being that it involves the secured creditor. The Bill’s moratorium procedure has no such requirement. While the bank’s security cannot be removed and it would have the legal right to enforce its security post the moratorium, to exclude the key stakeholder from the company’s strategic decisions is surely mistaken.

The impact of the Bill will be to increase the risk to lenders. Not allowing lenders any involvement in the moratorium will discourage lenders to this sector, where one of the reasons for their willingness to lend to date has been the ability to act quickly if borrowers are starting to breach covenants. There needs to be a carve-out for SME companies, perhaps using the EU definition of an SME: fewer than 250 employees, turnover less than €50 million and the balance sheet below €43 million. This would mean that banks could safely continue to lend to SMEs, knowing that the moratorium would be available only to larger companies. Without this, the Bill will have a major impact on lending to the SME sector at a time when it is most needed.

There is currently little wrong with the UK’s SME insolvency restructuring culture, and the comfort it gives to lenders delivers a vibrant lending culture. I am sure it was not intended that this legislation would damage this thriving part of our economy. It is invariably the case that more businesses fall into insolvency coming out of a recession than going into one, which is all the more relevant today with the enormous help provided by the Government.

The permanent changes to the moratorium and restructuring plan included in the Bill will stifle the ability to borrow in the SME sector and will result in more insolvencies. I urge the Government at least to consider the suggested carve-out for SMEs.

Covid-19: Business

Lord Flight Excerpts

Wednesday 13th May 2020 Lords Chamber

[Lord Callanan]

The noble Baroness makes some very good points. In my view, it is essential that all businesses experiencing increased costs and disrupted cash flow as a result of the virus are supported. The FCO is working to monitor closely coronavirus throughout the world and we are using our diplomatic network to do our utmost to help all British companies.

[Lord Flight (Con)]

It looks as though the most important long-term change resulting from the coronavirus crisis will be a huge increase in the number of people working from home, which will in turn have other big economic effects. The Government’s five key pieces of guidance refer to working from home as only a good thing; the main territory not so far addressed is the personal tax implications of millions of people working from home. Will the Government stick with the existing tax laws or introduce a simplified standard tax deal relating to their premises for those who work from home?

[Lord Callanan]

My noble friend makes a very good point. I agree that this crisis will result in a long-term increase in the number of people working from home. When an employee must work from home, for example because of the crisis, the employer can pay them a small amount per week, free from income tax and national insurance contributions, to cover additional costs such as heating and power. Alternatively, of course, they can reimburse their actual expenditure. I will certainly ensure that my noble friend’s comments are passed on to the Treasury for consideration for any future tax changes.

State Aid (EU Exit) Regulations 2019

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Thursday 14th March 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am grateful to the Minister for his introduction. He has covered the ground very admirably. I have taken the step of putting down Motions to Regret for both the State Aid (EU Exit) Regulations 2019 and for the European Structural and Investment Funds Common Provisions and Common Provision Rules etc. (Amendment) (EU Exit) Regulations 2019 because I wish to do two things. I want to probe a little further on the detail in the regulations and I will share with the House that my focus will be primarily on the state aid regulations rather than the structural funds arrangements. I also wish to make points on the fact that little consultation and thought has been given to how these very important schemes will be continued in the long term.

In order to help the House, I shall spend a few moments on the second of the two sets of regulations covering structural funds. The main point to make is that the Government are taking the opportunity to continue the existing funds either by paying through to the EU to continue with the existing schemes or by taking on the burden themselves. The problem is that of course the first approach is obviously right, given that these are contracts which are in place, commitments have been made, there are funding streams which are currently in process with recipients who are in urgent need of these moneys. Given that, it is right that they should be continued. However, the problem is that, as and when the Government take over responsibility for these schemes and for the payment of them, that will come under the cosh of the general economic situation at the time and the question of future budgetary opportunities for changing them. To what extent can the Government guarantee that the funding will be maintained at least at current levels and that schemes which need second and subsequent phases to complete will be considered fairly and on their merits as if the original arrangements were in place? I would be grateful for a response from the noble Lord on that point.

I turn to the state aid regulations. The issue here is the question of why it is that we are transferring across into UK legislation exactly the same procedures and processes that have existed up until now through the EU’s policy of state aid. It is fair to say—the Minister should correct me if I am wrong on this—that, prior to joining the EU in 1973 and the passing of the EU Bill and Act in 1972, there was no concept of state aid as such in the UK. The arrangements under which moneys were used to fund regional activity, to promote research and development and to provide for cultural activities were paid out of general taxation funds gathered in by the Treasury and subject to annual approval by Parliament. In a sense, are the Government trying to operate in a rather odd way in this statutory instrument in relation to others that we have considered? The general premise is that the statute book should be complete at the time we leave on a no-deal basis, assuming that we do—although I hope very much that we will not. However, given that this was not a practice before 1972 and did not exist in any form in the years before that, why are we accepting lock, stock and barrel that which is currently happening in the EU?

In order to make the point, I want to spend a bit of time on state aid and how it currently operates. I acknowledge that much of the information that I am going to share with the House is contained in an excellent pamphlet, which I recommend, that was published by the Institute for Public Policy Research in January 2019 called State Aid Rules and Brexit. The first point to make is that state aid is a portmanteau term which does not have direct legal force. It has a definition that is broadly used in the Treaty on the Functioning of the European Union, which states that state aid is any resource made available by a state,

“which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods … in so far as it affects trade between Member States”.

Two important points arise from that. It is for goods only, and it is between member states. These issues are therefore not entirely relevant to a transfer of that particular definition to the UK, where presumably we are talking about trade within the UK because we are not going to be offering state aid for trade outside the UK.

[Lord Flight (Con)]

The EU has used state aid rules effectively in order to tell the British Government what to do with regard to their enterprise investment scheme; that is not goods, it is very much a financial service.

[Lord Stevenson of Balmacara]

I am grateful to the noble Lord for the intervention. I will come on to that; I was quoting a definition only to prove that it did not actually work. He has made my point for me—perhaps I will shorten that bit of my speech. I was going on to say that the rules do not work in practice, because they have been applied to a number of very different activities.

There is a definition—it is not very clear what it means in practice—and it applies to the particular issue of competition between states, and we will not have that situation. Within this, of course, there are a number of variations, one of which we have already touched on. It is generally recognised that state aid can do more than simply reduce distortions in competition. It can enhance public welfare, address inequalities, allow for investment in research and development for which there is no direct benefit to individual companies—which is probably therefore a public good—and address inequalities across various areas and regions. These do not fit very well into the definition, yet they happen and have continued to do so. Broadly speaking, the state aid rules are not really designed to prevent states aiding the enterprises that operate within those states; they aim for state aid to be targeted. Is that one of the issues that will be carried forward in these new regulations, should they be applied and there be no deal? If that is the case, we are talking about a slightly different way in which the Government will be operating to preserve some of the elements being transferred. I could list a number of issues under which state aid has been offered that would exemplify that.

If we are going to accept that state aid has in the past been used, under the general block exemption regime, for regional aid, to help SMEs, to support research and development, to support the environment and for cultural and other reasons, we have to accept that the issues are broadly interpreted. I am anxious to get on the record whether the Government see this historical use of state aid in a European context as the basis on which future state aid arrangements will be made in this country, whether done directly by the UK or by devolved Administrations.

If you look at European spending on state aid, the UK is significantly below the median level and well below the average. It was said in the IPPR document I talked about that,

“UK spending on state aid as a percentage of GDP in 2016 was 0.36 per cent, significantly lower than the EU average (0.69 per cent) and far lower than other western European countries such as Germany (1.31 per cent), France (0.65 per cent), and Denmark (1.63 per cent)”.

State aid should presumably be appropriate to the need that has been defined, but if UK expenditure were on the same level that France spends we would be spending £6 billion more. If we were to raise it to the same level as Germany, we would be spending £19 billion more; if to the same level as Denmark, £25 billion more. These are huge sums of money, and we do not need to spend much time thinking about what would happen to that. Previously, that would have been money funded out of the European budget, in a sense, but obviously that can only come from taxation raised in member countries. If we are bringing this home and bringing back control, we will also have to think about where the resources for that would come. Is there any intention to set a budget figure for what state aid will be, going forward, if these regulations come through? Can the Minister speculate about where the indicative level of spending will be?

What happens after Brexit if we leave on a no-deal basis? Clearly, some of the issues here will work whether we leave with or without a deal. With a deal there will be implications, not just from the transition period but particularly—this is relevant to debates we had only yesterday—on the question of Northern Ireland. If we are working on a backstop arrangement, there are some specific rules, which I am sure the Minister will want to acknowledge, relating to how state aid rules will apply in Ireland, particularly with reference to differential practices across the border. Can the Minister give us some information about how that would happen? If there is no deal, we are back in WTO territory; those are the only rules that generally apply to the use of targeted financial subsidies. They are not as far-reaching or as enforceable as the EU rules, because the EU’s state aid rules come with significant penalties for those who breach them. They will place limits on government, but they are not nearly as bad, so there would be no barrier in a no-deal, WTO environment for the Government to take forward a spending programme which would encourage more spending on state aid in a way which would be helpful to their overall arrangements.

Industrial Strategy

Lord Flight Excerpts

Monday 8th January 2018 Lords Chamber

[Lord Flight (Con)]

My Lords, I very much agreed with what the noble Lords, Lord Griffiths and Lord Bhattacharyya, had to say. I had reservations that yet again we were going to see fine words but whether they would turn out to deliver the goods was another matter, but I am comfortable to support such a national effort, as has just been referred to. It is a much better framework than the previous frameworks. At a tangent, I also point to the productivity leadership group convened by Sir Charlie Mayfield, chairman of John Lewis, to provide help and advice on implementing productivity improvement, particularly in the retail sector, which I will come to. That sort of organisation is healthy and sometimes has the ability to achieve things which Governments cannot achieve.

Of the government activities, I greatly welcome the transformation sector deal for life sciences, with 25 organisations taking over an important part of our economy, as the noble Lord, Lord Kakkar, pointed out. I too make the observation that it was a tragedy that the technical schools envisaged in the Butler Act never really flourished but I would point out their brave, continuing supporter in the form of my noble friend Lord Baker, who has now put in university technical colleges, which in the main are doing extremely well in producing the skills that we need and do not necessarily have.

This debate, to my mind, is essentially about our productivity and I would like to focus on five practical issues which, in aggregate, point us to why our productivity is probably understated in comparison with other economies. The first point is that if you subsidise pay, which is what tax credits do, you are bound to affect productivity. If labour is cheap and subsidised it encourages overemployment and the use of labour, rather than capital investment. That is the very opposite of France, where no firm wants to take on more labour than it can possibly avoid doing because it is so difficult to get rid of it; in the UK, we have had the reverse. Socially, that was a good thing following the financial crisis but we have gone beyond a time when it is positive. I note that the noble Lord, Lord Darling, has effectively made the same comment.

The second point has been touched on by a number of noble Lords today but not, I think, made specifically: one of our real problems has been an inadequate savings rate for 50 years and more. In the Keynesian sense, savings and investment must equal each other and inadequate saving has underpinned inadequate investment, very much in the way that has been referred to.

My third point is about the rather interesting study by Mark Price—now my noble friend Lord Price—on the importance of happiness in work and its effect on productivity and output. His measurements showed that the most satisfactory sectors were those of fast-moving consumer goods, hospitality and entertainment, while the least happy sectors were construction, transport, very much the public sector, engineering and architecture. The happiest people were the group aged 65-plus and the least happy those aged 19 to 24. It was interesting to read that John Lewis was established very much on the basis of that being important to the creation of an efficient business, and on the huge importance of employee ownership. I have always believed in that very much: when I built the Guinness Flight business, it was based on employee ownership.

John Lewis is to be a leader in addressing how to improve productivity in the retail sector—one of the sectors that has made the figures look so disappointing. There are over 3 million people employed in the retail sector. Where we have been in advance of other economies is in moving to online, which now represents over 20% of retail sales. Some extremely useful work has been done here by Gary Channon, the CEO of the fund managers Phoenix Asset Management. What has really been happening is that when we go to shops, if we buy things and take them home, that taking home is not in any way included in GDP figures. However, when you buy online, a whole range of activities—storing, packing up, delivering to the house in question—add considerable costs.

The figures look something like this: there should have been a reduction of towards 1 million people in traditional retailing to match the more than 20% that has gone to online delivery but it has not happened. However, online has created some 300,000 jobs and the combination of the two has, in the short term, hit productivity pretty seriously. That is why it is extremely important that our leading retailer, the John Lewis business, is focusing on this and making its own changes. A McKinsey report suggests that there could be 900,000 fewer jobs in retailing by 2020 and sees 53% of retail sales having scope for automation. John Lewis has also invested £500 million in its Magna Park national distribution centre. It has taken on 500 apprentices this year and looks to take a huge quantity of them by 2020. If you like, it is the lead business in how to improve and sort out the productivity of retailing in the greatly changing climate of having much more online business.

I also point, in parallel, to the financial services sector. I declare my interest in terms of my ongoing involvements in that sector. Since the credit crunch 10 years ago output has been stagnant and as a result the sector, which has been the biggest industry in the country, has fallen from having 9% of GDP to 7%. You would have thought that would result in a significant reduction in the number of people employed in the sector but not at all; rather, if anything, the numbers have increased with the enormous volume of new regulation and compliance that the industry has to face. Quite a lot of this, such as MiFID II, strikes me as contributing little or nothing and as extremely unhelpful to certain sectors, particularly private client fund management. Anyway, the net result of all that has been a big drop in financial services’ profitability.

The practical point I am making is that on a five-year view of these specific little areas, which are capable of being addressed relatively quickly, more recovery in productivity is likely to come from sorting out such areas than the big picture of the Government’s plan. But to go back to the beginning, they have my support. I had concerns initially that the plan reminded me of the Wilson Government’s national plan, but that is unfair for the reasons put forward by a number of excellent speakers today.

This territory needs cross-party national commitment. There is a lot going on in this country which is extremely good news, such as leading in tech sectors and the huge volume of younger people who are entrepreneurial and starting new businesses. But, for the reasons that my noble friend Lord Prior pointed out, it is absolutely essential that we improve our productivity and living standards if we want an open, democratic system to continue.