Economy: Growth

Lord Selsdon Excerpts

Tuesday 29th January 2013 Lords Chamber

[Lord Selsdon]

My Lords, when the noble Lord, Lord Desai, joined this House in 1991, I always found myself speaking on economic and trade debates from one of these Benches—either this side or that side—but there was something strange about it: he always seemed to be at a much higher level. I thought that perhaps the seats were higher. However, this was part of his life and I learnt much from him. When he first arrived, I wanted to know why we had so many economists. I had already asked the Department of Trade why we needed economists connected with trade, and I found that there were about 230 of them. This started when we had the desire for a relationship with eastern Europe. Somehow people felt that economists came from eastern Europe, where they were more intelligent or more highly trained. The noble Lord, Lord Skidelsky, is someone totally different—he is a trader at heart. He has entertained and amused me over a long period of time.

As I stand up to speak today, I am slightly worried. I did not want to insult the noble Lord, Lord Deighton, but I was not sure how to pronounce his name: “i” before “e” except after “c” or before “g”. Although Hansard cannot correct our pronunciation, it would be wrong of us in your Lordship’s House to get someone’s name wrong.

I stand here today to speak on behalf of the remains of my “gang”: the noble Lords, Lord Ezra and Lord Stoddart of Swindon, and the noble Viscount, Lord Falkland, who is in his place. We had the honour of serving on a Select Committee on overseas trade, back in 1985. We are going to make an approach and ask whether that committee can be re-established, and the Chairman of Committees will already have received a message from the noble Lord, Lord Ezra.

I was put on that committee because I would be young enough when it became important to do something serious about everything. This has been much the story of my life in your Lordships’ House. No one realised that I might be able to do something on my own. However, I did write a report. The Select Committee was called the Aldington committee, after Lord Aldington, and it had some quite bright people on it. We had an enormous amount of support and interviewed people from well over 100 companies. Our report asked, “What do we do when the oil runs out?”. This was in the 1980s—the committee was formed in 1985—and the oil was steadily running out. Everybody was spending the money from oil but not investing it. As it ran out, the balance of payments deficit began to grow, because people were not interested in the balance of payments. The deficit soared, particularly on visibles. It became so enormous that we could hardly support it. As we know well, today we have quite a lot of deficits on visibles. The total figure is around £50 billion, although there are some good aspects. In the pharmaceutical field we have a surplus of perhaps £20 billion; in food, excluding alcohol, it is minus £20 billion; with alcohol, it is a little less, because the whisky which my family used to make historically is probably doing quite well abroad.

However, does a balance of payments matter? I think that it does, but it is trade that I am interested in. I sail very happily in the wake of my noble friend Lord Howell in recognising that, if we do not trade with the world, we will no longer have an economy. Your Lordships know well that our visibles deficit with the EU is very significant. We have a surplus with non-EU countries—Egypt and the Middle East are among the greatest—but with that form of deficit and no investment following, we have a certain difficulty.

I declare an interest in that, having been involved in trade and the financing of trade, I do not like economists quite so much as they always find reasons why you should not do something rather than why you should. We have a scenario where we are looking for new technological growth and trade which is technology-led. We have forgotten that over a short period of time new technology has been developed in the United Kingdom. Because my father spent most of his life and all our family money motor-racing, I have an interest in cars. The success of Formula 1, which was built and designed over here, led to a revitalisation of the automotive industry. Our friends from India worked that one out, so they came over here and in a relatively short space of time completely revitalised Land Rover and other areas.

The same happened with the Japanese and Nissan. In my early days, surprisingly enough, I was meant to be doing economic, industrial and trade research. We acted for the Japanese. They said that they would like to invest in England, when we were more interested in selling to them. On the automotive front, it took a long time to get the go-ahead. We did a study on cars and forgot that the Japanese drove on the same side of the road as we did. That was quite a problem, but it was one of the reasons why we said, “Why don’t you come and make cars over here, because it will be more economic?”. However, they just wanted to make cars that lasted. So those were two areas of success.

For a while I was rapporteur of the European Council of Ministers of Transport, responsible for the standardisation of heights of bridges, bogie couplings, and so on, and the building of bridges across the Bosphorus, across Sicily and in Denmark. When you are on a committee and are young, the others know that they may have someone who can actually type. One of the things that I learnt in the Navy was to type seven copies and put holes through the a’s and the e’s. So I still believe in the written word.

We have considerable experience in transport. However, if we confine our experience, desires and ambitions wholly and exclusively to our own country, we will have forgotten what my noble friend Lord Howell described—the opportunities in the world and the willingness outside, in the Commonwealth and in a whole range of other countries, to co-operate with us on development. If we look at the mineral sector, it is logical that our Canadian and Australian cousins have experience and knowledge which we could easily put together to create and develop added value and wealth wherever we may be on the face of the earth.

I look back at the old-fashioned maps and charts. To me, Greenwich is the centre of the earth. To get to the west coast of America, you have to go east and right the way round; otherwise you have to go through the Panama Canal or round the south. Looking at our own relationships—not using the British language but the background, trading and culture—I believe that in co-operation with the Commonwealth and with other territories we could succeed very quickly and very well.

I turn to the doubtful area of taxation. I had a great regard for Michael Heseltine—now the noble Lord, Lord Heseltine—not at first, but when he set up the enterprise zones. That was when I went to Toxteth. We looked at what happened in Docklands and the regeneration. Although there were people who normally would never have invested in these sorts of doubtful ventures—we have only to look at the slightly disastrous beginning of Canary Wharf and the complete failure of developments of any significance to get off the ground economically in Docklands—it was the ability to claw back tax that permitted people to take an added risk. We should look at this again. Rather than having our foreign friends who want to live in London being told they will have to pay mansion taxes or things of that sort, I should like to set up a fund that would enable them to invest in infrastructure development and claw back that tax for a period of time.

I am not a dreamer. I am quite happy to think that, as age goes by, the things that are happening now will be history. We talk in this House about five, six or seven years before an economic upturn, but to me that is too long. I would rather see it happen at the moment. I should like my noble friend Lord Howell and others to go out in the world and sign the sort of Elizabethan treaties that we used to have, where we would buy the “turds of birds” from South America, as someone said; where we bought things because we needed them or could trade them on. Where are the great trading companies? They all seem to have died. I am happy to admit that I am in trade and that normally I sit below the salt.