“The test of the success of this and future Budgets for a country living within its means will be the growing number of households that are equipped and completely free to earn the means to live.” Bishop of Birmingham 21/07/15
On the 21st July 2015 the Bishop of Birmingham, the Rt Revd David Urquhart, responded to the Budget Statement, during a debate in the House of Lords. The Bishop called for an inclusive capitalism and questioned Lord O’Neill the Commercial Secretary for the Treasury about the impact of the changes to working age benefits. The Bishop also spoke about the need to improve productivity via energising the local economy alongside investing in infrastructure, skills, training and apprenticeships.
The Lord Bishop of Birmingham: My Lords, I am grateful for the Minister’s reprise of the recent Budget Statement and for the opportunity to join this debate. I welcome the expectation of a strengthened economy. I also welcome the aspiration for the common sense of living within our means and the wisdom of reducing both the deficit and national debt as a proportion of GDP.
The Minister is more aware than most of the difficulties and costs of such ambitions, as the Government seek to address the weaknesses of our economy, identified in the Budget as low investment, low skills, low wages and low productivity. Will he agree that in a Budget for a one-nation economy, the effects of resolving these difficulties and the costs they incur should be spread justly and proportionately across society, and that a transition to an economy where, as the Chancellor said, “all can prosper” will require all the rigour and vigour of an inclusive capitalism?
The aim of adjusting benefits, as the Minister has already mentioned today, to a proper level of support—indeed, the sort of support envisaged by the founders of the welfare state—and away from the drudgery of false dependency will be achieved only if there are affordable jobs providing the foundation for households that are not only self-sustaining but wealth-building. Meanwhile, as these jobs are emerging in a strengthening economy, and with our increasing ability to compete in a global market, will the Minister give details of whether the working-age benefits freeze and the changes in tax credits that have been outlined—highlighted in the calculations of the Institute for Fiscal Studies—will result in more young people being better off or worse off, even with the new living wage?
I am grateful that the Minister again waved the Fixing the Foundations document, which he encouraged us to read at Questions a few days ago. I have been pleased to do so, and found it inspiring and encouraging, as someone who formerly ran businesses and was part of the economy. There are more details in that than can be dealt with today—and I was grateful that the noble Baroness, Lady Kramer, mentioned that we might debate these in more detail at future opportunities.
Today I want to emphasise two interlinked elements of productivity: skills and the regions. The Minister knows that improved productivity, resulting in well-resourced jobs, requires a complex range of measures, including investment capital and research and development, to put into practice enterprising and risky ideas in the local economies, and ideas producing popular goods and services that people want to buy, meaning that the company and workers are rewarded for its enterprise with affordable wages. Then there are the wider issues of good infrastructure that he mentioned, such as transport, housing, healthcare and policing—but also, of course, a practical planning framework. In all this, I ask that the immediate focus in this wide menu of policies should be on the development of skills that connect directly with the opportunities of business, manufacturing, science, technology and administration.
The emphasis on universities is most welcome at that high level, and we know that we should develop more highly skilled adventurers in developing our economy, not just have to import them from overseas. But will the Minister affirm that with apprenticeships—the target of 3 million has been mentioned—there is an intentional link with education, which has been mentioned in passing, and the aspiration of independent living with this desire for enterprise and profitability? There is a joining up that needs to be done if we are to make a real difference in the lives of this generation in the life of this Parliament.
Furthermore, will the Minister encourage the streamlining not just of universities but of further education in the regions, and the provision of particular support for talented teenagers from poorly resourced backgrounds for these apprenticeships? I am thinking not only of incentives for businesses, which have been outlined in the arrangements, but for those individual, aspiring young people for whom access to travel-to-work costs and the dream of independent housing is still far out of reach. These and other measures are in my view—and, I believe, in the Government’s—best achieved with a very strong commitment to regional responsibility and autonomy. Your Lordships touched on this in the end of the previous debate.
Investment in infrastructure and public services has already been mentioned as a regional good, not least in the same breath as the northern powerhouse. But will the Government now give similar public attention to fuelling the Midlands engine? In the Midlands there is 24% of manufacturing; it is the strongest exporter, with an increase of more than 70% in the past six years, and the only region with a trade surplus with China. I urge the Government not to wait for a perfect political Midlands settlement or restructuring but to support current initiatives towards increased productivity —for example, with Midlands Connect, which is making a marvellous vision for transport infrastructure. Then there is Drive West Midlands, which is about the automotive supply chain—and, of course, returning to the skills agenda, there is the ambition for Birmingham to be a CSR city, joining professions, commerce and businesses to the most deprived schools in the most deprived wards in Birmingham.
The invaluable one-to-one mentoring that is behind the high-level macro and microeconomic policies that we are debating today, and the generous person-to-person relationships and resourcing needed to bring these new participants, who otherwise will not join in the benefits of all that we are planning today, is one of the most remarkable opportunities for what might be called a remodelled regional civic virtue, as those who have are able to bring into this wonderful country of ours the opportunities for those who have not. The test of the success of this and future Budgets for a country living within its means will be the growing number of households that are equipped and completely free to earn the means to live. I trust that the Government and the Minister, with all his expertise, will be able to provide us with measurable evidence of those new households in the months and years to come.
The Commercial Secretary to the Treasury (Lord O’Neill of Gatley) (Con): …… I jump to the very important topic of the northern powerhouse and city and regional devolution. A number of noble Lords made comments about that, including the noble Lords, Lord McFall, Lord Scriven and Lord Soley, the noble Viscount, Lord Hanworth, and the right reverend Prelate the Bishop of Birmingham. This project led to me becoming a member of the Government. I am very passionate about it and I think it is fair to say, from everything he has said, that the Chancellor is too. I will make a number of quick comments, and I apologise for not responding to some of the very important points raised.
On the topical issue of the supposed cancellation of the electrification of the Leeds to Manchester route, I say that it has not been cancelled: it has been delayed. That announcement was made in the context of trying to create a new and healthier environment for the leadership of Network Rail. I am just as agitated as many others about that decision, not least because it happened to be announced on the day of my first speech as a Minister about the northern powerhouse in Manchester. I assure your Lordships that it is getting a lot of attention and I hope that further initiatives will come forth. I add—in contrast to what I heard, I think from the noble Lord, Lord Scriven—that having Transport for the North and a northern Oyster is exceptionally important. In order for the northern powerhouse to be anything other than a number of cities, geographically identified with a pin, in the north of England, and for it to generate lasting economic change, it is important that the cities are joined together on an economic basis, if not an administrative one, in a way that has not been pursued before. There is enormous evidence from the great successes in recent years of Transport for London that having something like that technology, whereby individuals can find out very quickly the ease at which they can travel, knowing the costs as well as the facilities available, is important. I think it has boosted by 30% the movement of people around Greater London. If that was done between many of these northern cities, it would play a major role in boosting the economic fortunes of the north of England…….