Category: Economy

Asian Catering Federation Networking Dinner

Lord Sheikh attended and spoke at the Networking Dinner which was held to honour the winners of the recent Asian and Oriental Chef competition and to launch the 10th Asian Curry Awards 2020.

The dinner was organised by Mr Yawar Khan the Chairman of Asian Catering Federation. The Asian Catering Federation is an umbrella organisation representing 35,000 Asian caterers in the UK. It aims to unite Asian caterers on one platform to achieve members’ common goals through partnerships with Government and other organisations.

In his speech, Lord Sheikh talked about the considerable contributions made by the asian catering industry to the British economy as well as the cultural contributions. Lord Sheikh also noted that now we have come out of the European Union, the industry needs to undertake local recruitment and training and Parliamentary legislation needs to be scrutinised and appropriate representations made.

All-Party Parliamentary Group for Ethiopia and Djibouti

Lord Sheikh is a Vice Chair of the All-Party Parliamentary Group for Ethiopia and Djibouti.

The APPG for Ethiopia and Djibouti held a meeting on Wednesday 26th February. The Ethiopian Ambassador H.E. Mr Fesseha Shawel Gebre was in attendance and gave a short update to the Group and talked about the forthcoming General Elections and the reforms which have occurred under the premiership of Mr Abiy Ahmed. Lord Sheikh made the point that as now the UK has come out of the EU, more trade should be established with Ethiopia. The country has many opportunities for trade and investment and the UK should seek to increase and strengthen its economic ties with the country.

The meeting was productive and the Group engaged in interesting conversations.

The picture shows Lord Sheikh, His Excellency Mr Fesseha Shawel Gebre and Mr Laurence Robertson MP Chair of the All-Party Parliamentary Group for Ethiopia and Djibouti.

Developing Markets Associates UK-Papua New Guinea Trade and Investment Forum

Lord Sheikh chaired the UK-Papua New Guinea Trade and Investment Forum organised by Developing Markets Associates (DMA) in April 2018.

DMA is a multi-service development consultancy. Incorporated in 2007, the company was established to ‘help money flow into the world’s emerging economies’ through a number of vehicles including investment summits for sovereign governments, through reducing the costs of international remittances and through deepening financial inclusion in emerging economies.

In his speech, Lord Sheikh advocated for more bilateral trade between the UK and Papua New Guinea. Lord Sheikh has spoken about trade with Commonwealth countries in the House of Lords several times and at other meetings. Lord Sheikh made remarks about the trade and investment statistics between the UK and Papua New Guinea and the potential for increased trade in terms of industries including renewable energy and those of natural gas and crude oil. Lord Sheikh cited that he hopes that the conference could contribute to more business being undertaken with and in the country.

 

Intellectual Property Bill

My Lords, I must begin by congratulating and extending a very warm welcome to the noble and learned Lord, Lord Walker of Gestingthorpe, to your Lordships’ House. It is a pleasure for me to follow his maiden speech in today’s debate. He brings with him an excellent array of credentials in the field of law, the depth and quality of which I think we all agree was reflected in his marvellous contribution today.

The noble and learned Lord was called to the Bar at Lincoln’s Inn, where he served as treasurer in 2010. That holds personal resonance for me, because my brother and niece were also called to the Bar at the same Inn of Court. He has built a career filled with remarkable achievements in the legal profession, including appointment as a Queen’s Counsel in 1982 and serving as a High Court judge and as a Lord Justice of Appeal. Most notably, his career as a judge culminated in his appointment as one of the original Justices of the Supreme Court on its inauguration in 2009.

The reverence for the noble and learned Lord’s work has stretched even beyond these shores. He served as a non-permanent judge of the Hong Kong Court of Final Appeal. He is also a strong family man with four children, and last year he celebrated his golden wedding anniversary with his wife Suzanne. With his legal expertise and undoubted other qualities, he will be an invaluable addition to your Lordships’ Chamber, and I commend him on his maiden speech.

I am pleased to speak in the Second Reading of the Bill, as it has personal resonance for me. I briefly talked about the matter in a speech that I made in your Lordships’ House following her Majesty’s most gracious Speech. On that note, I declare an interest in that I was previously the chairman and chief executive of an organisation that arranged insurance schemes for the protection of patents and copyrights. I therefore have first-hand knowledge of how part of an organisation’s resources and finances are often utilised for the purposes of intellectual property.

I have been heartened by our Government’s commitment to reforming intellectual property law ever since coming to power. We have seen a strong and consistent desire to see the changes through in the interests of removing obstructions for businesses and ultimately assisting economic growth. Ian Hargreaves and his panel should be commended for their work, particularly in the light of the Government accepting the majority of its findings and recommendations. The legislation in this area, as the report stated, is falling behind what is needed and must be reformed to make the most of today’s challenges—and, indeed, those of the future.

At the very heart of the Bill is the concept of helping to release innovation that is otherwise being stifled by current intellectual property laws. For me, some of the key proposals that will no doubt provide the greatest returns are those intended to allow a greater degree of flexibility to aspiring designers and creators. The Government made clear in their response to the Hargreaves report that they are concerned at the extent to which businesses and entrepreneurs are restricted and prevented from realising their full potential due to the heavy chains and shackles of outdated legislation.

I believe in the free and competitive spirit of the market and everybody’s right to reap the rewards of their creations, but I also realise that innovation and creativity do not always come from completely original, alien concepts; they are also bred from inspirations, from the merging, adapting and fine-tuning of ideas. I am very supportive of limiting the protection of trivial features of design both to curtail overly opportunistic designers from making unreasonable claims and to clear up uncertainty where cases are taken before the courts.

I also believe strongly in the provisions enabling a right of prior use by third parties of designs that are subsequently registered by others. Again, that is a concept based on fairness and the recognition that substantial work is often undertaken before the process of legal registration. It also allows for what the Department for Business, Innovation and Skills has referred to as the “limited exploitation” which such third parties should rightly be entitled to in the circumstances.

However, it is also crucial that we implement measures to ensure that our talents here at home are adequately protected and thus encouraged to develop further.

I am particularly pleased to see provisions being made to amend the Freedom of Information Act for continuing programmes of research intended for future publication. I believe that the increased transparency provided by the Freedom of Information Act has, on the whole, been good for the public, not least in the name of political accountability. However, in some circumstances, such disclosure will inevitably pose a threat to the integrity and potential economic gain of such research. When the Justice Select Committee looked at this matter last year, it was informed by Universities UK that there was strong concern across the country about how such early releases of information are threatening the competitiveness of our universities against each other and, perhaps more importantly, internationally.

Freedom of information is a concept introduced on the basis of it being very much in the public interest, and I would argue that this tweaking of the original legislation takes it even further down that road. A natural extension of this is the introduction of protection from infringement in relation to acts undertaken privately and, in particular, in teaching and experimenting. It simply does not make sense for activities undertaken with no commercial purpose to be susceptible to laws designed to protect designers from commercial loss, and it is good to see that the Bill takes note of this.

In order adequately to protect our designers and creators, we must also ensure that the law is accessible to them and properly serves their interests. The Bill makes very clear that the deliberate copying of a registered design is to be rightly designated a criminal offence that is dealt with by criminal courts, and clearly outlines the conditions and circumstances in which an offence is to be considered as such. This is perhaps the most important advance made by the Bill, giving designers the concise guidance they need, further deterring those who look to produce and sell counterfeit products, and helping to bring the law in this area uniformly into line with that of breaching copyright and trade marks. I am also pleased that time has deliberately been taken to ensure appropriate lines of defence for those accused of such offences. This is a firm policy that still ensures that genuinely innocent individuals who unintentionally break the rules will not be caught by it.

As well as ensuring strength and clarity in intellectual property laws, it is also crucial that we streamline internationally where possible. We live in a globalised world, and these laws must reflect that. The power which the Bill provides for ratification of the unitary patent court agreement will provide an essential step in seeing this beneficial mechanism finally implemented. The opportunity for businesses to create single EU-wide patents for products, rather than separately across all countries, as well as to litigate where necessary in one unitary court covering all countries, will reduce costs and administration substantially. In fact, the Intellectual Property Office estimates that this will benefit UK business by about £40 million per year. The negotiations on this have been long and arduous for all countries involved, and we must now seize the opportunity to make it happen.

I am sure all the noble Lords in this House will agree that small businesses form the backbone of our economy and will be the driving force behind our economic recovery. I am therefore supportive of any and all measures designed to help SMEs better utilise the systems of protection that are available to them. In this vein, it is long overdue that we accede to the Hague agreement, and I am extremely pleased to see this included in the Bill. The current anomaly whereby companies can apply for protection covering only the whole of the EU has been hampering our small businesses for too long. They are unlikely to require such wide protection and often find it difficult to meet the costs of such a substantial registration. The Hague system is a sensible system, and it is about time we implemented it in the United Kingdom, both in the name of simplicity of administration and, even more importantly, in giving our small businesses a route to target specific markets with their products and services. It will also enable us to encourage other countries to sign up, thus opening up our markets further.

Finally, the proposed IPO opinions service for UK-registered designs seems to be the most obvious and progressive step forward in furthering direct government support for innovation, particularly given the success of the existing service, which has proved both cheap and efficient to use, and with the vast majority of opinions requested being issued within the target timeframe of three months. In 2010, the IPO conducted a survey of the users of its opinions service, and 70% declared that they would be in favour of the service’s expansion. Several reviews, including Hargreaves, have found that the expense and time needed to resolve intellectual property disputes can actually prevent small businesses from making proper use of their rights, and thus act as a barrier to innovation. Therefore, such a service can be a valuable tool in helping to avoid costly litigation. Such a service will help to ensure that intellectual property remains the preserve of innovators, rather than those with the deepest pockets.

Reform of our intellectual property laws is long overdue. I believe that the Bill provides the clarity, transparency and overall efficiency that our innovators need to help them flourish and realise their full potential in assisting our economic growth.

Queen’s Speech

My Lords, I am very pleased to speak in this debate. Last week’s gracious Speech was rightfully centred above all else on the economy. It was a reminder to us all that although we have made some progress, there is still much to be done and our Government are committed to staying the course and maintaining our disciplined approach of austerity. Even more than that, it was about managing our economy in a way that is fairer for people and rewards those who work hard.

As a businessman myself, I was particularly heartened to see that central theme running through the very heart of our plans for the next 12 months. I am sure that everyone will agree that the way to strengthen our economic competitiveness is by growing our economy back to the health that it once enjoyed. That will be achieved only through more companies doing more business and offering more job opportunities.

I believe that the twin engines behind achieving that will be those of increasing our level of international trade and attracting higher inward investment from overseas. Last week, the Prime Minister spoke passionately to financial leaders at the global investment conference, when he rightly said that we face a sink or swim moment in the global economic race. Indeed, two of several key points that the Prime Minister outlined were focusing on trade deals and ensuring that the UK remains as internationally connected as possible.

Encouraging figures were also released last week which showed that our successful management of the 2012 Olympic Games brought the UK an extra £2.5 billion of direct foreign investment, increasing our productivity and, ultimately, our competitiveness. It created 58,000 new jobs, and 105,000 jobs were safeguarded as a result, firmly retaining our position as the leading destination for foreign investment in Europe. UK Trade and Investment was involved in helping to deliver the majority of those projects and should be applauded for its efforts.

Our focus must now turn to maintaining the momentum. We need to prove to the rest of the world why the UK remains an ideal place to do business. Specifically in terms of trade, I believe that we must begin to look much more seriously at developing our trade relationships in Africa. We have historic ties with some African countries and we can build on those connections further. Strong growth over the past decade has already helped to reduce poverty, and the International Monetary Fund recently forecast that sub-Saharan Africa will grow by 6% over the next four years. In fact, Ghana, Mozambique, the Congo, Liberia and six other African economies are expected to grow by 7% or more this year. To put that into perspective, the only other emerging economies in that 7% growth club are China, India and Vietnam.

It is therefore a very good time for British companies to get more involved with and invest in Africa. We must capitalise on that rapidly expanding economy simultaneously to grow British business and to help to drive further development and job creation across the African continent.

Here at home, as specifically mentioned in the Queen’s Speech, we must also continue to grow our private sector. Well over 1 million new jobs have been created since 2010, which has played a key role in the reduction of our deficit by one-third. I am very confident in our Government’s commitment to increase that further by a number of encouraging policies.

The £2,000 allowance on national insurance contributions has been welcomed with open arms by businesses across the board. It will particularly help those smaller firms which currently find that a substantial financial burden and means that one-third of all employers will not have to make any further national insurance payments. Research has shown that employers favour that measure, and it will be a business-boosting initiative. The Federation of Small Businesses has even stated that it went beyond what it was asking for.

The continued cutting of corporation tax is also helping private businesses to keep more of their cash to invest in expansions and employ more people, while promoting the UK as an attractive place for overseas companies to set up businesses here. Our Government have also promised to reduce the burden of excessive regulation on business. Again, that will make a considerable difference to small and medium-sized businesses, which find themselves bogged down with health and safety laws and restrictive red tape.

If there was ever a time to do away with the over-bureaucratic legislation that holds some businesses back, it is now. In particular, I look forward to seeing progress on the scaling back of consultations, audits and judicial reviews, as well as the elimination of equality impact assessments.

The latest figures show that we now have 4.8 million companies; 75% of them are sole traders; and 96% of all firms in the United Kingdom employ fewer than 10 people. It is therefore safe to say that small businesses will continue to drive us out of the economic downturn. The SMEs should, however, utilise digital technology as much as possible. That will be essential for their survival and growth.

I have always supported SMEs in my business life. In that regard, I declare the interest that I am chairman and chief executive of an insurance organisation which helps smaller organisations to place the insurance covers. I add that I was previously the chairman and chief executive of an organisation which had connections with more than 1,000 smaller insurance organisations.

In addition to cutting and reforming where necessary, it is also the job of government to invest in infrastructure to help to nurture growth and provide extra jobs. I was glad to see that explicitly referenced in the gracious Speech, with a specific focus on the development of the High Speed 2 railway line. I appreciate some of the controversy that inevitably comes with such a large-scale project, particularly on the acquisition of land, but the long-term benefits that it will provide to businesses across the country cannot be underestimated. It also takes a significant step in addressing two economic policies that I feel most strongly about-that of rebalancing our economy towards a manufacturing sector, which made our country so great; and promoting the redistribution of growth to many of our cities and regions nationwide.

Through such turbulent times, I believe that it is crucial that the Government are seen to be acting not just in the interests of economic health per se but in a way that also promotes economic fairness. That was another key pillar of the Queen’s Speech and one that goes hand-in-hand with our disciplinary approach to finances. It is heartening for me to see a government pledge on,

“building an economy where people who work hard are properly rewarded”.

I have always believed strongly in the notion of individual responsibility and reaping rewards from one’s own commitment and perseverance, and have spoken to that effect in your Lordships’ House in my support for reform of the benefit system.

Let us make no mistake: this Government’s welfare reforms are about making sure that the right people are helped back in to work while allowing for increased levels of support to those genuinely in need. Simplifying and rebalancing the ways in which benefits are considered and awarded can be seen only as progressive, particularly in the current climate.

I also welcome the inclusion of a Bill to help businesses protect their intellectual property. I have already declared my interest in the insurance business. I add that I have arranged insurance schemes for the protection of patents and copyrights. I therefore fully appreciate the value of a Bill to protect the intellectual property rights of businesses across the country. This is essential if we are to be seen as a centre for innovative ideas and products.

Before concluding, I wanted to mention my appreciation for the inclusion in the Queen’s Speech of the Government’s focus on preventing sexual violence in conflict worldwide. I have spoken on this subject both in your Lordships’ House and at several meetings elsewhere, and I am very grateful to the Government for placing a focus on it. The victims of these heinous crimes deserve justice, and it is up to countries like ours to provide the support that they need and to take effective action to deal with this dreadful problem. I have made clear my appreciation of the Government’s £1 million funding to the Office of the UN Secretary-General’s Special Representative on this matter, and I look forward to further progress in this regard.

 

Budget Statement

My Lords, I was able to speak in last year’s post-Budget debate. Twelve months ago, we all hoped that we would now be in a healthier economic position. We have admirably cut our deficit by a third and seen more than 1 million new private sector jobs created. However, the wider global situation, particularly in the eurozone, remains such that full recovery is still some way off and the continued growth downgrades have been inevitable. Above all else, what is important in such times is that we maintain discipline and stick to our course of austerity, particularly in the face of the confused calls from the Opposition for higher borrowing. More borrowing is not the answer to our problems.

It is crucial that we are seen to be taking the right decisions for the right people by helping those who genuinely want to get back into work, by nurturing the talent and innovation of our young people, and by helping businesses in need of assistance, as businesses form the backbone of our economy.

I am very supportive of bringing forward the £10,000 income tax threshold to next year, positively impacting on 24 million people. The more of people’s hard-earned money they are allowed to keep, the more empowered and encouraged they will feel to spend it. That will result in greater revenues to those parts of our economy that so desperately need them and, ultimately, in a healthier all-round cash flow to stimulate growth.

The scrapping of this year’s fuel and beer duty rises is also very welcome. Again, it is a measure that will affect the average person in their day-to-day spending and, I believe, provide that small but foundational level of help that people really do notice.

I should also like to express my support for the very difficult decision to cut further the budgets of some of our government departments. Diverting £3 billion per annum from Whitehall departments to the implementation of major infrastructure projects such as roads, railways and power stations will make more of a difference to the everyday lives of working people and create thousands of new jobs.

I also applaud the proposals concerning home ownership. These will help people to buy houses and will assist housebuilders, generate more business activity and create jobs.

I endorse the decision to protect our health, education and international development budgets, as well as the responsible decision to exempt military personnel from the caps imposed on other public sector pay rises. As someone who is interested in humanitarian matters, I am pleased to learn that we will continue to spend 0.7% of our national income on overseas development.

One area where I hold particularly strong feelings is the erosion of our competitiveness, which has without doubt been one of the fundamental causes of our continued stifled growth. This has been due to the red tape and bureaucracy implemented by the previous Government, coupled with the very challenging shift in global wealth from West to East. In short, when this Government came to power, the UK was no longer an attractive place to start a business. Much of this is already being addressed through the Enterprise and Regulatory Reform Bill, and I was heartened to hear of the Chancellor’s decision once again to reduce corporation tax. We already boast the lowest corporation tax rate in the G7, but we can now proudly say that, based on projections, as of 2015 we will also have the lowest rate in the entire G20.

Perhaps one of the most notable announcements made yesterday was the cut in companies’ national insurance contributions, removing huge barriers for smaller businesses and meaning that a third of all employers will not have to make any further national insurance payments.

I support the Government’s announcement that we will be taking forward the recommendations in the excellent report of my noble friend Lord Heseltine, No Stone Unturned: In Pursuit of Growth. I agree with the Government’s policy of taking robust action and improving our system of training and education, particularly in relation to apprenticeships and vocational training. This will enhance our manufacturing base and help in our recovery.

As someone who is widely travelled and has contributed a great deal on trade issues in your Lordships’ House, I shall now focus my remarks primarily on the export-led recovery. There is no more obvious a way to grow a country out of economic turmoil than by increasing trading links—in particular, levels of exports—with other countries. I have been very heartened by the efforts of UK Trade & Investment since the previous Budget. In particular, earlier this month it announced that its Trade Challenge Partner initiative will be implemented, with 99 partners drawn from trade and other membership organisations, with the aim of getting more of the members exporting overseas and further supporting those that already do.

I welcome the appointment of parliamentary trade envoys, who have the potential to make a real difference. I should like to see an expansion of the role and number of these appointments. There are plans to develop British business support networks in 20 priority high-growth and emerging markets, and I know that my noble friend Lord Green led a conference just last week to announce the establishment of the India trade network. These are exactly the kinds of initiatives that I should like to see more of. Anything that we can do to help SMEs to move into emerging markets must be embraced to the point where it is no longer viewed as a challenge for us to increase our exports but it is naturally accepted that it is in our country’s fibre to be a world leader in selling our products overseas. I hope to see this progress continue to develop as we move forward in rebalancing our economy and refocusing our efforts on what made us such a great and powerful manufacturing and trading nation many years ago.

We need to aspire to raise our game in international markets and to support the most vulnerable in our society as the economy charts a course to recovery. We also have to restore order to our public finances. I welcome the Government’s resolve and commitment; it is now time to deliver.

 

Enterprise & Regulatory Reform Bill

My Lords, I am grateful for the opportunity to contribute to the debate and thankful to the Government for introducing this Bill, which will support British businesses in cutting unnecessary costs and red tape, boost consumer confidence and help to create more jobs.

I wanted to speak briefly on the amendment of the noble and right reverend Lord, Lord Harries, relating to the inclusion of caste when considering cases of discrimination. This is not a new debate; indeed, when the Equality Act was published in 2010, a specific provision was included to allow for caste to be added as an aspect of race at a later date. Later that year, the National Institute of Economic and Social Research undertook an extensive government-commissioned study into the prevalence and severity of caste discrimination in the United Kingdom and concluded that it does in fact occur in many of the areas covered by the Equality Act, such as education and the workplace. That led me to conclude that government action is indeed required as a matter of some urgency.

As a man with Indian ancestry, I am all too aware of the deep-rooted prejudice and unfair treatment that results from allowing the caste-based system to persevere. The Minister may be aware of the religious concept of untouchability, whereby certain individuals are declared untouchables due to their perceived association with impurity and pollution. As a result, they are ostracised and isolated from the rest of society in order to protect and preserve the quality of the majority.

In particular, across much of south Asia, the Dalit community has suffered greatly from this deep, ingrained form of discrimination. Dalits are a community considered so lowly in the social hierarchy that in some circles they are in fact excluded from the caste system altogether and completely segregated by social customs.

Historically, in countries such as India, Dalits have also been physically separated from the rest of society, housed outside the main villages and entitled to perform only the most menial of jobs. This horrendous social mentality still prevails in some rural communities, although thankfully it is becoming less common. Today, the Indian constitution outlaws discrimination based on caste and provides for the reservation of seats in the House of the People and the states’ legislative assemblies for those who have been historically disadvantaged due to the caste system. There are also programmes to promote and provide educational and employment opportunities for those such as Dalits. Many people in this country will be completely unaware of the existence of such a caste system and its history in suppressing minorities here. This is why it is particularly important that we acknowledge the potential extent of the problem in the United Kingdom.

I was instinctively drawn to support this amendment. Following further reading and a highly reassuring discussion with the Minister this morning, I am now very much aware of how seriously the Government are taking this matter. They have been very clear that nobody should suffer prejudice because of their caste, and as such have developed the Talk for a Change programme to work with the communities affected by this discrimination. As with so many of the most deep-rooted cultural ills, education and awareness is the key to prevention and this is exactly the approach this programme will take. I also appreciate that there will be a political focus on the Hindu and Sikh communities where the problem is most prevalent. Such assertive action is extremely welcome and is necessary both in the name of protecting vulnerable individuals and in maintaining our reputation as a country that embraces progressive and tolerant attitudes.

The Government have also been clear that they have no plans to remove the provision contained within the Equality Act which allows for caste to be included at a later date. This again reassures me that they are maintaining a flexible approach to tackling this problem and were we to enforce the type of legislation called for in this amendment we would simply be pushing against an open door.

We must realise that, as a nation which has so proudly and successfully championed the fusion of a diverse range of minority communities with modern-day Britain, we have inevitable responsibilities. These responsibilities should be seen as challenges to relish; ways in which we can assist our new communities and help them to integrate better into what many see as the mainstream of British life.

Our Prime Minister has made the point that Britain is open for business, and I believe that furthering our commitment to fairness and equality in our boardrooms, offices and factories can only serve to make us an even more attractive nation to do business with. I believe that the Government share this sentiment and I look forward to following the progress of the Talk for a Change programme.

If a Division is called, I shall certainly vote not-content.

Economy: Growth

My Lords, I am very grateful to have the chance once again to contribute to a debate on what has been and continues to be our Government’s number one priority: promoting growth to reduce our national debt and restoring stability to our economy. It is important that we continue to have such discussions in order to continually monitor progress and exchange ideas about how we can assist our recovery further. I congratulate my noble friend Lord Deighton on his excellent speech at the outset of this debate. I also congratulate him on his ministerial appointment.

Concerns were raised last week following Friday’s announcement that our economy contracted in the last quarter, so this debate is most timely. The Chancellor was clear in the Autumn Statement that, despite the inevitable blips, our economy is ultimately improving. The deficit has been reduced by a quarter since the Government came to power in 2010, significantly lightening the further pressure on our debt each year. Employment is of course a key driver of growth and recovery and we have seen more than 1 million new jobs created in the private sector in the same period. Unemployment is at its lowest level for 18 months and the number of people in work has reached another record high. Demand for manufacturing orders is also expected to rise in the next quarter. Taking such indicators into account, it is fair to say that we are still on a stable path to long-term recovery.

We also received extremely positive news just yesterday that the FTSE 100 index rose to above 6,300 points for the first time since May 2008. It has now gained nearly 7% since the beginning of the year. The fact that the value of our top 100 companies is at its highest for nearly five years can only be seen as a bold endorsement of the direction in which the City of London and our economy as a whole is heading. Such a rise will only increase investor confidence further and continue to build its own momentum-which in turn allows business to expand, provides further employment opportunities and increases dividends, ultimately giving people more money in their pockets and a greater sense of financial stability.

I refer to an encouraging report recently produced by UKTI which found that 46% of major financial service companies in the UK are actually overseas-owned. In particular, it emphasised how the United States uses the UK as a springboard from which to access the rest of Europe and that we are particularly well placed to benefit from the ongoing boom in the world’s emerging markets. One of the Government’s key targets on the economy has been to ensure that Britain is seen as open for business, and this report evidences just how accessible we have made ourselves to overseas investment.

This does of course remind us of the wider global context within which we are operating and to which our own economy is closely linked. In such a globalised economy, we cannot be fully confident of future prosperity unless our neighbours, allies and trading partners are also in positions of reasonable financial health. Just last week, the IMF downgraded its global growth forecast for the next two years, mostly due to the continuing crisis in the eurozone, which is now expected to remain in recession throughout 2013.

We will continue to be vulnerable for some time and must not be knocked off our disciplined course of austerity. The more severe the illness, the more cautious the treatment will be and the longer it will take to recover. Now more than ever it is important that we have strong leadership. Our Prime Minister was clear last week in Davos that trade, tax and transparency are our economic priorities heading forward. As a businessman, I fully support this approach.

The Government have already been taking numerous measures to stimulate growth: local enterprise partnerships and enterprise zones have been established; our corporation tax is now the lowest in the G7; and just earlier this month the expansion of the start-up loans scheme was announced. In particular, I commend the Government’s continued commitment to seeing through the plans for the High Speed 2 railway line. I appreciate that there is some controversy surrounding these plans, but the wider long-term benefits to the United Kingdom simply cannot be underestimated. As the Prime Minister said, this project is an engine for growth in itself, ultimately creating tens of thousands of jobs. Reducing journey times between some of our major cities would be a significant step in addressing the north-south divide that currently exists in our economy and would regenerate regions that are sometimes overlooked.

I think that we would all agree that overseas trade is one of the most important elements to ensuring healthy, consistent growth. The Government understand this-one of their four aims to achieve growth is to encourage investment and exports. This is where we must create and maximise any and all opportunities.

I am concerned by the long-term decline in our share of global exports. We will not reach the great heights that we once did if we continue to buy so much more than we sell. That is why I am so pleased that the Government have developed a renewed focus in this area, with UK Trade and Investment actively encouraging small and medium-sized businesses to increase the exporting of their goods and services, particularly to emerging markets. I also welcome the wider commitment to double British exports to £1 trillion by the end of this decade.

I have previously mentioned in your Lordships’ House that over the past two and a half years I have travelled to a number of countries abroad and promoted trade between the United Kingdom and overseas countries. There are of course growing opportunities in countries such as Brazil, Russia, India and China. There are also prospects to do more business in the Middle East, central Asia and several African countries. I know some of these countries very well.

We should maintain and in fact strengthen our trade links with the USA and with other European countries. I am a great believer in the Commonwealth. We should build stronger trade links with other Commonwealth countries. I totally endorse what my noble friend Lord Howell said with regard to the Commonwealth countries. I believe that we have a good story to tell about provision of our services and manufacture of our goods. We must, however, make sure that our businesses are world-leading and globally competitive in order to attract inward investment and continue to increase further the potential for us to export to the rest of the world.

Our motor vehicle industry is a good example of where this is already happening. Last year 82% of all cars made in the United Kingdom were exported overseas. The total was 1.2 million vehicles-the highest ever. Britain is set to produce 2 million cars in 2017, following £6 billion of investment in the motor industry in recent years.

We have greatly improved our manufacturing methods and produced impressive vehicles which are now in greater demand. From trade comes growth, and from growth comes prosperity and stability. As a businessman, I have always believed that a successful organisation needs to produce very good products which should be competitively priced. It should then undertake an active marketing campaign. In doing so, it must always keep a close eye on its expenses. The Prime Minister has said that he wants every department in Whitehall to be a growth department, and he insists that every Permanent Secretary has growth as a key objective.

The Government are playing their part by giving business a positive and supportive framework around which to build and project itself. The Government are actively involved in improving infrastructure which will provide employment, attract investment and help businesses. Building up skills is also an important objective of this Government. We all believe in cutting red tape and giving more powers at local levels.

None of us has been naive to the fact that it was never going to be easy and would take some time for our economy to heal. The combination of the previous Government’s financial mismanagement and the wider global situation was a mix so toxic that it caused damage on a monumental scale. However, I believe that these measures and a continued ideological drive towards growth as a means of rebalancing our economy will ensure that we continue on our path to recovery. I am confident that we will promote growth and cut the deficit if we maintain the course that our Government are pursuing. It will be a hard task that requires the co-operation of government departments, various sectors of the industry, the business community-in fact, everyone in the country. I am sure that Britain will live up to its name of being great.

 

Economy: Growth

My Lords, the United Kingdom finds itself at an economic crossroads. This is due not just to the current financial crisis but also to the fact that changes need to be taken in our business and industrial landscape. I congratulate my noble friend Lord Heseltine on the submission of his excellent report. A renewed focus on overseas trade is severely overdue as we cannot continue to buy so much more than we sell. Our industries must be world leading and globally competitive, thus attracting inward investment and potential for us to increase exports.

I was pleased that this report placed an emphasis on the long-term stability of our science and research sector, and how we market it. We need to better support and stimulate the creativity we hold within, and ensure that this is better promoted to the rest of the world.

I would also draw attention to the report’s focus on the need for our government departments to build better relationships with the private sector and with each other. So much can be gained from government embracing private sector business in a way that works with it rather than alongside it. We must give businesses confidence that the Government understand their concerns and share their aims. I agree with my noble friend Lord Heseltine that wealth creation should be the business of all government departments. BIS and the Treasury cannot capitalise on every opportunity for growth and wealth creation without the help of those in other fields. I am therefore in favour of departments contributing to a wider growth strategy through which they could join up their thinking and complement each other.

The notion of localism is also extremely important and we must capitalise on the progress that the Government are already making on this. I was pleased to hear the Chancellor accept the recommendation that more of the funding for locally tailored schemes will go into a general pot for which local enterprise partnerships can bid. True innovation is released when it is free from central constraints, and it is the job of central government to promote and support this. Competitive bidding for such funds will encourage local communities to raise their game, give the successful bidders freedom to spend in ways that better support their local areas and, ultimately, build a nation of more ambitious and creative communities. There needs to be a greater level of co-ordination between government and the private sector, and indeed within the Government themselves. There also needs to be full recognition of the benefits of allowing strong, independent and dynamic local economies to flourish, supported but not controlled by national government.

In conclusion, I agree that we should think hard about our industrial approach, with a fresh examination of a wider economic landscape and a reshaping of our education system. We also need to take a creative look at the skills agenda.

Economy Debate

I thank my noble friend Lord MacGregor for securing this timely debate. At present, we have one of the largest budget deficits in the developed world. I am deeply concerned about the state of British finances and the impact of the national deficit on our GDP. Government debt currently stands at more than 50 per cent of GDP, and the deficit this year will be £167 billion, which is a record high. According to the Government’s own projections, they will be borrowing £734 billion over the next six years, taking our national debt to £1.3 trillion. The level of national debt has risen so drastically that next year we will spend more on debt interest than on education. These figures are extremely worrying.

We need to look at how this dire situation came about. The present crisis came to light because the banks were reckless in their lending and the regulatory authorities failed in their duty to ensure that proper practices were being undertaken. The situation was compounded by the fact that the Government had borrowed excessive amounts, no adequate controls were exercised on spending and there has been a considerable wastage of the country’s resources. Furthermore, the Government failed to take appropriate actions to generate revenue in different channels. With regard to expenditure, in my own business operations I have always believed that my expense ratio should not exceed an acceptable percentage of the revenue. Now that we are in a state of crisis, we need a clear plan to steer us out of this unfavourable situation and put us on a path to recovery.

The glaring failure of financial regulation must be adequately addressed, to the extent where a similar bailout by taxpayers of institutions becomes a distant possibility. I am in favour of plans to give the Bank of England greater responsibility concerning financial regulation. The economic downturn exposed the failure of the current system. We should seek international agreement on banking reform and the application of levies, if need be on a limited national basis. We now have a lower credit rating than other highly industrialised countries such as Germany and USA. We need therefore to safeguard Britain’s credit rating with a credible plan to eliminate a large part of the structural deficit.

At this juncture, I declare that I am the chairman of an insurance broking and financial services organisation. We need to maintain and strengthen our role in promoting Islamic finance, which is based on mutuality, ethical behaviour, transparency and the acquisition of assets which give it more stability. Growth in the Islamic banking sector globally is nearly 30 per cent per annum. Therefore, there are further opportunities for our country’s involvement. Had the financial institutions undertaken a greater volume of Islamic products, the financial problems we are facing would probably have been less severe. We must, of course, promote our financial services industry, but it is also imperative that we manufacture and export specialist goods such as precision machinery and pharmaceutical products. We have the expertise and resources to produce and export such goods. We need to have a balanced economy and encourage ideas which will further promote our manufacturing sector.

A large number of opportunities are presented by the improvement in the standard of living in countries such as India and China. We should be increasing our exports of high-value goods and financial services to these millions of potential new customers. It is important that our future economic strategy recognises the importance of small businesses, entrepreneurs and innovation to our recovery. Small and medium-sized companies play a vital role in job creation; it is therefore essential that those enterprises are not burdened by excessive bureaucracy. Cutting waste and reducing the layers of bureaucracy in our public services is vital to increasing efficiency in our industries.

The 1 per cent increase in employers’ national insurance contributions will impact small and medium-sized businesses the most. The national insurance increase is estimated by the Federation of Small Businesses to cost 57,000 jobs. Furthermore, it is imperative that the banks increase their lending to small and medium-sized enterprises. The increase of tax to 50p will affect businesses as well as entrepreneurs who generate wealth for the country and create jobs. The tax is therefore counterproductive.

The level of youth unemployment is now one of the highest in Europe. Young people have the potential to make a vital contribution to our economy and society. It is the responsibility of those in government and commerce to work together to develop a strategy that will help our young people to weather the economic storm. Independent scrutiny of our fiscal policy is vital to repairing the fragile economy and building trust among the public, a large number of whom contributed to the recent bank bailouts. For this reason, I support the proposal of the shadow Chancellor to create an independent office for budget responsibility if the Conservative Party forms the next Government.

The Budget delivered by the Chancellor of the Exchequer was in fact a long political statement that lacked substance and constructive thinking. The Chancellor did not give us enough indication about what his party will do to tackle the present crisis. The Government wasted the years when we had economic prosperity and failed to make hay when the sun was shining. We need to rescue the economy from the dire state it is in by implementing the eight clear and transparent benchmarks suggested by the Conservative Party. In addition, it is imperative that we take remedial action immediately, rather than delay taking the strong medicine which will cure our illnesses.

The plan put forward by the Conservative Party to right 13 years of wrongs committed by Labour is one that will have Britain up and running again and will maintain our position as one of the leading nations in the world.

 

Extracts relating to responses taken from speeches by other Peers including the Minister are listed below:

 

Lord Newby (Liberal Democrat Spokesperson for the Treasury):

For the future, it seems that there are two linked questions. How quickly should we reduce the deficit? More important, what kind of economy do we want to see in the future? We should start by recognising that the balance of the world economy is shifting rapidly eastward. I agree strongly with the comments of both the noble Baroness, Lady Valentine, and the noble Lord, Lord Sheikh, about this, not least what the noble Lord said about the need to develop the Islamic finance capacity in London.

 

 

Baroness Noakes (Shadow Minister for the Treasury in the House of Lords):

Thirdly, we believe that we must make a start on reducing the deficit as quickly as possible-I was grateful for the support of my noble friend Lord Sheikh on this. It is not enough to say that we will be good but not yet. Starting does not mean cutting savagely and it certainly does not mean making cuts that harm our recovery from the recession. Demonstrating real commitment by making hard decisions today, rather than talking about it, is a part of credibility.

 

 

Lord Myners (Financial Services Secretary to the Treasury):

The noble Lord, Lord Bilimoria, made an interesting speech from the Cross Benches. I could see that he made it from the Cross Benches; it was less easy to conclude that from listening to what he had to say. It was sad that he was not in the House when the noble Lord, Lord Sheikh, made his speech. Perhaps he would like to look at the noble Lord’s speech, because it had some interesting insights both into national economic management and into the management of private businesses. I was sure that people could agree with certain parts of his speech, but I found it more difficult to believe that people could agree with the whole of it, as he seemed to talk first in terms of increasing expenditure on defence, education and a number of other areas but then immediately coupled that with a call for a rapid reduction in public expenditure.

 

I have already referred to the excellent contribution by the noble Lord, Lord Sheikh.