Tag: 2022

  • Terence Burns – 2022 Speech on the Growth Plan (Baron Burns)

    Terence Burns – 2022 Speech on the Growth Plan (Baron Burns)

    The speech made by Terence Burns, Baron Burns, in the House of Lords on 10 October 2022.

    My Lords, the financial statement has not gone down well. I will leave it to others to address many of the details of why it went wrong, and my noble friend Lord Macpherson has done that with great clarity. I will say a few words about some of the issues facing the new Government in designing the proposed medium-term fiscal plan.

    The first and most important task is to make sure that we get through the period of abnormally high energy prices without serious adverse consequences. I agree with others that the energy price cap scheme has substantial support. Capping prices has the advantage of containing some of the increase in RPI inflation we would have seen and it can be done quickly. It has an in-built mechanism to adjust the amount of subsidy to the future pattern of energy prices.

    Of course, the scheme is not without problems: it dampens the incentive for households to economise on their use of energy and it is not well targeted. But the reality is that it is difficult to target vulnerable households at short notice, as the tax and benefits system is based around individuals rather than households. However, because the scheme is poorly targeted, it could be expensive—indeed, very expensive. Along with others, I must say that I find it very difficult to understand why the Government have resisted a windfall profits tax. Energy companies are experiencing a windfall and we should try to recover some of that.

    At this difficult time, it is essential that fiscal policy supports the Bank of England in bringing down the rate of inflation. The Government have made it clear that they regard bringing down inflation as a job for the Bank of England. I share the view that the Bank of England is not without blame around some aspects of the present circumstances, and it has been slow to recognise the emerging inflationary pressures and to increase interest rates. But my worry is that its task of bringing down inflation will be made considerably more difficult if the Government’s fiscal policy is pulling in the opposite direction.

    The proposed tax reductions next April remain a high-risk strategy until we know the size of the bill for the energy price cap scheme, so it is vital that the Government’s forthcoming medium-term fiscal plan gives dual weight to the OBR’s report on public finances and the need to support monetary policy in the job of bringing down inflation. This lesson was learned the hard way in the 1970s and it was an important driver of the MTFS introduced by the Thatcher Government in 1980.

    I fully support the principle that supply-side measures play a critical role in any policy to improve growth rates, but in the circumstances I hope that they will be concentrated on those measures that do not make the task of dealing with inflation more difficult. In my view, the harm from unfunded tax cuts at this point is very likely to exceed any supply-side benefit. I do not know of any convincing argument that unfunded tax cuts ultimately pay for themselves, other than in very special circumstances of high marginal tax rates.

    In these circumstances, public expenditure cuts will be difficult to find. My noble friend Lord Macpherson talked about this, and I shared his experience for many years. They could also be potentially damaging if they target those who are suffering most from the rise in energy costs and inflation in general.

    This is not to question the longer-term ambition of simplifying the tax system. However, we should recognise that supply-side measures will take time; they require careful analysis and implementation. I witnessed many attempts to introduce supply-side measures. Many of them fell into considerable problems as they moved on because they were exploited by people for whom they were never intended.

    Growth has been affected in all advanced countries by the combination of the financial crisis of 2008, the pandemic and the Russian invasion of Ukraine, so this is a general problem and is not unique to the UK. Higher public indebtedness and higher tax ratios are largely a consequence of dealing with these adverse shocks. I am afraid that the consequences for growth will take some time to work through.

  • Christopher Fox – 2022 Speech on the Growth Plan (Baron Fox)

    Christopher Fox – 2022 Speech on the Growth Plan (Baron Fox)

    The speech made by Christopher Fox, Baron Fox, in the House of Lords on 10 October 2022.

    My Lords, I too welcome the Minister to her new position.

    The current Prime Minister says that she is focusing on growth and, seemingly, she believes that almost the entire rest of the world are enemies of growth, yet her view on who the culprits are is not really supported by the track record of the government incumbents. For example, how does it help when we had a BEIS Secretary, now our Chancellor, turn his back on the industrial strategies that were effective growth partnerships with the Government? How does it help when the badly botched Brexit deal has created so much extra red tape that many businesses have stopped exporting altogether? How does it help when the Tories create duplicate regulations such as UK REACH, which has caused billions of pounds of extra costs for our chemicals industry? How does it help, when all sectors are facing chronic shortages of people and skills, to have a Home Secretary who is quoted as saying that there are too many immigrants in low-skilled jobs? She should have said that because training has been so badly neglected, there are too few British people in high-skilled jobs. High skills boost productivity.

    However, the most effective enemy of growth is instability. In just over three years, we have had three Conservative Prime Ministers. Each enters No. 10 decrying and overturning the efforts of her or his predecessor. It is very difficult for businesses to justify investing with these political shifting sands.

    Last month’s fiscal statement has created yet new levels of instability. To summarise the external view, I will quote the highly respected former US Secretary of the Treasury, Larry Summers:

    “The UK did not have room for a massive ineffectual fiscal expansion. The uncontained energy subsidies were themselves substantially problematic and did not leave room for large, permanent tax cuts. That called the credibility of the government into substantial question.”

    As we saw, once this credibility was called into question, all hell broke loose. Just one consequence of that is the cost of business financing, which has increased materially.

    These rising rates come against a backdrop of near-record levels of SME debt. The banking trade body, UK Finance, puts borrowing by small businesses at over £200 billion. About half of that debt is loaned on floating rates, which means that the cost of servicing is rising every day. With the number of company insolvencies in England and Wales already at a 13-year high, it bodes very badly.

    As the Budget debate unfolded and the debacle became clear, the Prime Minister sought to distance herself by focusing on the previously announced energy cost measures. As we heard from my noble friend Lord Newby, despite their flaws, this principle is broadly welcome—but remember that domestic energy costs remain at least twice those of last year. That is what we should be thinking about when we think about benefits.

    However, the business scheme has a major flaw to which I would like the Minister, the noble Lord, Lord Callanan, to respond to specifically at the end. Based on the terms of the scheme laid out by the Government, only businesses that signed a fixed agreement after 1 April 2022 and those on variable rates will benefit, so businesses with energy agreements signed before this date do not get a subsidy to their unit prices. I ask the Minister to write to me with the Treasury estimate of the number of UK companies missing out on the subsidy due to this cut-off and its estimated impact. I ask him to undertake at the Dispatch Box today that the Government will review this cut-off.

    In conclusion, when it comes to diagnosing the cause of our country’s problems, the Conservative Party needs to look in the mirror. The enemies of growth are politicians whose ideology drives out realism, Cabinet Ministers for whom blind faith eliminates proven expertise and a party for whom policy purity transcends common sense.

  • Michael Gove – 2012 Speech to the Independent Academies Association (IAA)

    Michael Gove – 2012 Speech to the Independent Academies Association (IAA)

    The speech made by Michael Gove, the then Secretary of State for Education, on 14 November 2012.

    Stanley Baldwin, the Conservative Prime Minister who won more elections than any other in history, was once asked what was the most significant thing that he had ever learned about politics.

    He paused, a faraway look entered his eyes, and he began to tell a story.

    It was, he confessed, not in Westminster, but in Cambridge, that he had learned the most significant single thing about political life.

    Baldwin had been walking along the backs, the verdant gardens which border the river Cam and link different Cambridge colleges, with the distinguished father of jurisprudence Sir Henry Maine.

    “At the end of the walk,” he explained, “Sir Henry turned to me – and he explained that the most important thing in the development of modern politics had been the move from status to contract.”

    And then Baldwin paused,

    “Or was it the other way around? D’you know, I can never remember”.

    Baldwin’s artful absent-mindedness is proof in its way of political genius.

    The British have never trusted intellectuals, and certainly not with power. So any thoughtful politician with ambitions for a long stretch at the top would do well to disguise any intellectual or academic leanings. From Arthur Wellesley to Willie Whitelaw, Ernest Bevin to John Prescott, a certain anti-intellectualism is seen as proof of trustworthiness in political leaders. We prefer to be led by practical men of affairs who have won their honours in battle rather than

    those who have grown pale as the midnight oil has burnt out in the lamp-lit library.

    This anti-intellectual strain in British life, and thinking, may have protected us from following the sort of ideological fashions that captured continental minds over the last century. As has been pointed out before, both fascism and Marxism were ideas so foolish only an intellectual could have believed in them. But I fear the anti-intellectual bias in our way of life has, at times, become a bias against knowledge and a suspicion of education as a good in itself.

    The bias against knowledge was displayed when MPs argued against raising the school leaving age, when trade unions argued against demanding higher qualifications for teachers and when teachers demanded that texts in literature classes be relevant rather than revelatory for their readers.

    This bias against knowledge manifested itself most recently when the otherwise saintly inventor Sir James Dyson had a crack at people who want to go to university to learn French lesbian poetry rather than applying themselves to matters technical.

    Having devoted as much of my department’s discretionary budget as possible to attracting more teachers into maths and science subjects, including computer science I am certainly no enemy of equipping people with the skills required to master technology.

    But I am certainly an enemy of those who would deprecate the study of French lesbian poetry.

    Because the casual dismissal of poetry as though it were a useless luxury and its study a self-indulgence is a display of prejudice. It is another example of the bias against knowledge.

    As was the recent argument mounted by the Leader of the Opposition that 50 per cent of the population would never make it to university.

    He was, effectively, saying that we should ration access to knowledge.

    We should believe our society capable of ensuring many more than half our young people are capable of going to university.

    He was effectively saying we should ration access to knowledge. I disagree.

    When there are still so many schools which are simply not educating children well enough, and where students still aren’t stretched properly, there are clearly many more children capable of enjoying what university has to offer, if only they were all properly taught.

    I was recently in Poland – where 73 per cent of young people go on to university. In South Korea, Norway, the Netherlands, Finland, Australia, Ireland and New Zealand, 60 per cent, 55 per cent, 55 per cent, 51 per cent, 51 per cent, 50 per cent and 41 per cent of the population go on to university. [The equivalent figure for the UK is 37%].

    There are schools in our own country – many of them represented here – where many more than 50 per cent of students will go on to higher education even though many more than 50 per cent of the students arrived at or below the national level of expectation in reading, writing and arithmetic.

    The fatalistic assumption that we cannot ensure all schools are that good is another example of our failure properly to value the transformative power of education. As Andrew Adonis says in his superb new book Education, Education, Education: “How many good schools do you have to see to be convinced of the educability of every child?”

    We should demand every school is a good school because of the potential of education to power economic growth, advance social mobility and make opportunity more equal.

    But it is also important to emphasise that education is a good in itself – beyond – indeed above – any economic, social or political use to which it might be put.

    Because education properly understood – a liberal education which includes the disciplines of language, literature and mathematics, science, geography and history, music, art and design – introduces children to the habits of thought and bodies of knowledge which are the highest expressions of human thought and creativity.

    Education – properly understood – allows children to become citizens – capable of sifting good arguments from bad, the bogus from the truthful, the contingent from the universal.

    These intellectual capacities are vital if we are to keep democracy healthy, social relations civilised, economic behaviour honest and cultural life enriching. But these abilities can only come from the initial submission of the student’s mind to the body of knowledge contained within specific subjects. And these traditional subjects are the best route to encouraging the techniques of thinking which mark out the educated mind.

    And even apparently frivolous exercises – like the study of French lesbian poetry – can develop the mind in a way every bit as rigorous and useful as any other study.

    Not, of course, if the study of these tests are faddish exercises in rehearsing sexual politics. But if the study of poetry occurs within the discipline of proper literary criticism, with an understanding of metre and rhythm, an appreciation of the difference between sonnet and villanelle and a knowledge of the canon so we know where influences arose and how influences spread then there are few nobler pursuits.

    And the study of what great and original minds have thought, expressed in forms designed to capture the sublime, the beautiful and the original can awaken sympathies and encourage reflection in a way which nothing else can. It can ensure we live lives more full and see human existence in all its multi-coloured richness.

    So – having come out – through the medium of French lesbian poetry – as an unapologetically romantic believer in liberal learning – education for its own sake – let me now explain why the best way to advance this liberating doctrine is through… regular, demanding, rigorous examinations.

    Now some people will say that if I believe in the adventure of learning and the joy of discovery, how can I possibly be a fan of testing and examining? It’s like professing a love of cookery – hymning the beauty of perfectly baked souffles or rhapsodising over richly unguent risottos – and then saying the most important thing about food is checking the calorie count in every mouthful. Isn’t an obsession with measurement the enemy of enjoyment, the desire to assess and examine the death of learning for its own sake?

    I understand the argument.

    There is – always will be – something forbidding about the examination hall. The stern invigilator, the merciless march of the clock hand as the seconds tick away, the series of escalatingly difficult questions some unknown figure has designed with the specific aim of judging us – these are not what we would normally think of as agents of liberation.

    But they are, just as much, if not more so, than any aspect of education.

    Firstly, exams matter because motivation matters. Humans are hard-wired to seek out challenges. And our self-belief grows as we clear challenges we once thought beyond us. If we know tests are rigorous, and they require application to pass, then the experience of clearing a hurdle we once considered too high spurs us on to further endeavours and deeper learning.

    One of the biggest influences on my thinking about education reform has been the American cognitive scientist Daniel T. Willingham who has published the definitive guide to weighing evidence, especially scientific evidence, in the debates around education reform.

    In his quite brilliant book “Why Don’t Students Like School”, he explains that students are more motivated to learn if they enjoy what he calls “the pleasurable rush that comes from successful thought”. And that is what exam success provides.

    Second, exams matter because the happiness I have described sustains future progress. We know that happiness comes from earned success. There is no feeling of satisfaction as deep, or sustained, as knowing we have succeeded through hard work at a task which as the upper end, or just beyond, our normal or expected level of competence. The craftsman’s contentment in an artefact fashioned more elegantly than he could ever have hoped, the singer’s joy when she has completed an aria which stretches the very limits of her range, the athlete’s joy at his personal best, all of these are examples of the deepest human happiness which any of us can achieve for ourselves.

    Third, exams help those who need support to do better to know what support they need. Exams show those who have not mastered certain skills or absorbed specific knowledge what more they need to practice and which areas they need to work on.

    For all these reasons exams pitched at a level which all can easily pass are worse than no exams at all. Unless there is stretch in the specification, and application is required to succeed, there will be no motivation, no satisfaction and no support for those who need it.

    The fourth reason exams matter is that they ensure there is a solid understanding of foundations before further learning starts. And it is important that we appreciate that exams cannot simply be exercises in displaying skills or techniques divorced from mastery of a body of knowledge. Subjects are nothing if they are not coherent traditional bodies of knowledge, with understanding and appreciation of basic facts and simple concepts laying the ground for understanding of more complex propositions, laws, correlations and processes.

    Daniel Willingham again makes the point powerfully in his work when he points out that, “research from cognitive science has shown that the sort of skills that teachers want for students – such as the ability to analyze and think critically – require extensive factual knowledge”.

    I can think of no better development of this argument than the case made by Professor Lindsay Paterson to the Scottish Secondary Teachers Association in 2010.

    “Why,” he asked, “do we test students on their knowledge of quadratic equations? It’s not because they are like a sort of Sudoku puzzle, sufficient in itself and pointing to nothing beyond itself. It’s because quadratics relate in several ways to more general principles; to the properties of all the higher order polynomials, to the properties of graphs, to the workings of calculus. And these, in turn, lead to the highest reaches of the mathematical discipline, to measure spaces and topology and functional analysis.”

    “In other words,” Professor Paterson goes on to say, “quadratic equations are propaedeutic, a way of starting on important paths that have no intrinsic limit even if most students will choose not to go very far along them. Worthwhile assessment of a student’s knowledge of quadratics will therefore have to make sure that these principles are laid down.”

    Professor Paterson is right in my view that assessment must not be seen as an end in itself – it must prepare the way for future learning – and that is why it is so important that the assessment we conduct at the beginning of primary schools prepares students for the rest of their time in primary, why the assessment at the end of primary schools must be credible in the eyes of teachers in secondary schools why the assessment at the end of secondary will depend for its success on the approval of those engaged in higher or further education and why the success of any technical or vocational assessment depends on satisfying the requirements to practice trade or profession.

    That is why we need to ensure that students at the end of year one in primary are able to decode fluently so they can read for pleasure – and the phonics test provides that guarantee.

    It is also why we need to ensure that students at the end of primary are numerate and secure in the basics of English. Which is why my colleague Liz Truss rightly removed calculators from Key Stage 2 maths tests to ensure facility in arithmetic and why we must have a test of spelling, punctuation and grammar in Key Stage 2 English tests to guarantee basic literacy. Otherwise progress in the next stage of education will be fitful and fragile

    And the same principle applies to any replacement for GCSEs and for reformed A levels. Both need the involvement of those subject experts, learned societies and university academics who understand and appreciate what is required to make progress in any subject area.

    And of course the same principle applies to vocational and technical courses – which is why Doug Richard’s forthcoming review of apprenticeships will emphasise the vital importance of an external assessment of competence in a practical field.

    And that takes me to the fifth reason exams matter – they signal to those who might admit an individual to a position of responsibility that the individual is ready to take on that responsibility. Whether it’s the driving test that allows an adult to take to the road or a completed apprenticeship which allows an electrician to rewire a building or the pre-U examination that confirms a candidate is ready for the rigours of a physics degree, the examination is a guarantee of competence.

    Now I’m aware that some will argue that the problem with exams as a preparation for deep thought and rounded study is that exam preparation involves dull memorisation, stress and an excessive concentration of mental effort and at the end we forget everything we learned the moment the test is over.

    But the precise opposite is the case.

    Which brings me to my sixth reason to support exams. They facilitate proper learning and support great teaching.

    As Daniel Willingham demonstrates brilliantly in his book, memorisation is a necessary pre-condition of understanding – only when facts and concepts are committed securely to the memory – so that it is no effort to recall them and no effort is required to work things out from first principles – do we really have a secure hold on knowledge. Memorising scales, or times tables, or verse, so that we can play, recall or recite automatically gives us this mental equipment to perform more advanced functions and display greater creativity.

    And the best way to build memory, as Willingham explains, is by the investment of thought and effort – such as the thought and effort we require for exam preparation and testing.

    Because tests require students to show they have absorbed and retained knowledge – and can deploy it effectively – they require teachers to develop the techniques which hold students’ attention and fix concepts in their minds. That will mean deploying entertaining narratives in history, striking practical work in science and unveiling hidden patterns in maths. Tests drive creativity at every level.

    And more than that – they drive equality. The seventh reason we need exams is to ensure our society is ordered on the basis of fairness. And merit.

    Whether or not Stanley Baldwin was paying attention, Sir Henry Maine was right. The most important political development in modern times – indeed the hinge point at which a society becomes modern – is the move from status to contract.

    In pre-modern societies power, and access to power, depended on status. Rank was a matter of birth. Patronage was dispensed via clan or feudal ties. Offices, administrative responsibilities, even university positions, were handed out on the basis of who you knew not what you knew. Before our great period of domestic social reform in the reign of Queen Victoria, army commissions were bought and sold between men of wealth and connections, English universities were clerical closed shops which allowed noblemen to indulge in dissipation and dons in politicking but contributed almost nothing to learning while public administration was an exercise in dividing spoils between clans and clients.

    But in the 19th century the importance of status gave way to the primacy of contract. That meant power and patronage were dispensed on the basis of due process and the rule of law. And that meant a basic contract between the state and individuals was established – access to positions of influence depends on objective measurement of merit.

    Thanks to army and university reforms, and indeed to the Northcote-Trevelyan reforms of the civil service, entry to positions of responsibility became dependent on ability. Indeed on tests. To this day promotion in the army and entry to the civil service depend on examinations – and that is why we still have the best officer corps and the best civil servants in the world.

    Examinations are, we can see, a key weapon of progressives everywhere. In place of privilege they supply talent, rather than office being dispensed by arbitrary and unfair means, it is distributed to those who show application and merit.

    In the case of universities, entry by competitive examination dissolves the power of patronage networks and establishment connections.

    In America the use of scholastic aptitude tests opened up access to colleges which had in the past arbitrarily blocked minority students. The academic test was a tool of the civil rights struggle.

    Colleges which had uses quotas to limit, say, the number of Jewish students or placed undue reliance on lineage and connections in allocating places had to accept students on the basis of test scores and real ability.

    And in this country, over the last few years, tests have also helped overcome prejudice and advance equality.

    Many people would accept that – in broad terms – assessment can achieve all the things I’ve listed – it can motivate, convey a sense of accomplishment, identify weaknesses that need support, lay the foundations for future study, guarantee competence in a field and acknowledge application and real merit.

    But some will say that continuous assessment, teacher assessment, internal assessment, controlled assessment can and do provide all the benefits I seek without any of the demoralising, depressing and distorting effects of external examination, let alone the further problems generated by league tables.

    I am as it happens a huge fan of teacher assessment – properly designed and administered – but teacher assessment alone cannot bring the benefits proper external testing can secure.

    We know that external tests are integral to balanced assessment.

    The evidence shows that in teacher assessment of English achievement there is a tendency for ethnic minority children to be under-marked and students from non-minority backgrounds to be more generously marked. With external testing there is no opportunity for such bias – the soft bigotry of low expectations – and tests show ethnic minority students performing better. So external tests are not only a way of levelling the playing field for children of all backgrounds they are a solvent of prejudice.

    We also know that the sorting of test results into league tables is another progressive development in education.

    In the past, before the clarifying honesty of league tables, schools were judged on hearsay and prejudice. Schools with challenging intakes in disadvantaged communities were written off as sink schools. But many of them were performing well – better than other schools with more privileged intakes which were coasting. But their success – particularly at primary level – could not be effectively established. Now, thanks to Key Stage Two league tables, we can see that there are many primaries – Durand Academy in Lambeth, Cuckoo Hall in Enfield, Conway Primary in Birmingham, Hope Primary in Knowsley – which have very challenging intakes but which outperform most other schools. The children in those schools – and the teachers too – are now recognised as huge and unambiguous successes thanks to league tables. Testing has overcome prejudice.

    And testing and league tables don’t just help us to overcome prejudice – they actively advance equality. League tables enable us to identify high-performing schools and the factors that generate their success. They allow us to capture and then disseminate innovation and good practice. They allow us to identify those schools which are falling behind and failing their pupils – as we have this week – and provide them with the support they need to do better. More often than not that support is coming from those schools we have identified – through testing and league tables – as successes. Without tests and league tables we would have no effective means of helping poor students succeed – we would be grappling in the dark for tools whose design we could not replicate to solve problems we could not identify for students we did not know how to locate.

    Now, I know that league tables can be corrupted. Too much reliance on one measure as a target – however well-designed that single target may be – will mean gaming can occur.

    But we can limit – if not entirely eliminate – gaming by reforming our exams and accountability system.

    Which is what we are doing.

    We’ve already diversified the ways in which schools can be judged, by publishing more and more data allowing new league tables to be constructed so all schools can be ranked on their performance in – say – art, music, drama and dance.

    We’ve developed our own measure in the DfE – the English Baccalaureate – which has helped counteract the temptation schools faced simply to offer the easiest subjects available to maximise the number of students getting five good GCSEs. It has created a parallel incentive to offer students those subjects which facilitate progress on to higher and further education.

    But there are still nevertheless problems with the concentration all these measures generate on the C/D borderline. Which is why we will be consulting soon on what a future – more intelligent – accountability system would look like. And I would welcome as many views as possible as to how that might develop.

    But I would say that – in my experience so far – intelligent accountability – and good teaching – are not served by over-reliance on modular assessment, coursework and controlled assessment. All are subject to gaming and all take time away from teaching and learning. Teachers tell me that controlled assessment can take up to six weeks out of GCSE English teaching – to no-one’s benefit.

    If we develop a more intelligent approach towards accountability – and exam design – then I think we can reap all the many benefits that exams can bring.

    And I know – of course – that there is more – much more – to education than the academic learning that can be assessed in examination.

    I am passionate about music, endlessly interested in the visual and dramatic arts, convinced of the power of sport to transform lives, an unapologetic fan of dance – classical and modern – as well as an advocate for greater involvement in social action by young people.

    But there is no evidence that those schools which excel academically – and get good exam results – neglect any of these activities. Quite the opposite. The more impressive any school’s academic results the more certain I will be when I visit it that it will have a great choir, orchestra or band, a superb arts department, successful sports teams, a wealth of after school clubs, regular student productions and an impressive commitment to the broader community.

    Critics sometimes talk about certain schools as exam factories – dull Gradgrindian institutions which churn out great GCSE and A level passes but which are otherwise joyless prison houses of the soul where the cultivation of whole child is neglected if not actively scorned.

    But I have to say I have never encountered such a school – either in visits or Ofsted reports. Because they don’t exist. Schools which are academically successful are invariably successful in non-academic areas. Whereas the converse – sadly – is not always true.

    And that brings me to my final argument. Schools that take tests seriously take students seriously. Schools that want exam success want their students to succeed. And schools that pursue academic excellence give their students the potential to beat the world.

     

  • John Eatwell – 2022 Speech on the Growth Plan (Baron Eatwell)

    John Eatwell – 2022 Speech on the Growth Plan (Baron Eatwell)

    The speech made by John Eatwell, Baron Eatwell, in the House of Lords on 10 October 2022.

    My Lords, it was encouraging to hear the Prime Minister echo Keir Starmer’s conference speech, putting growth at the heart of the political agenda, but terribly discouraging that her policy for growth embodies the libertarian philosophy that she has soaked up at America’s libertarian think tanks.

    Her libertarian economics has already been tried. Donald Trump’s Tax Cuts and Jobs Act 2017 cut taxes—notably for the better off—and funded the cuts by borrowing in excess of $2 trillion, arguing that these measures would increase investment, growth and incomes, so that tax cuts could pay for themselves. Well, it did not work. Investment increased temporarily but then declined. Lower taxes produced a barely perceptible increase in growth of 0.1 of 1%, and there was no increase in incomes to pay for tax cuts. The American experience confirms that libertarian economics is bad for business. Consider the most commercially successful innovation of modern times: the iPhone. Every significant technical innovation with the iPhone was made in the public sector, from the touch screen to internal electronics.

    Growth demands innovation. Because returns are an unknowable future, innovative investment in new, untried technologies, or new products, accessing new markets, is always risky. That is why the state has such an important role to play, funding the risk-taking that markets cannot handle. When public bodies created the iPhone technologies, they were taking risks that the market would not.

    There remains Britain’s perennial problem of transforming invention into innovation into commercially viable products. Imitating best commercial practice in Europe and the US will help, but more is needed. We need to leapfrog our competitors by building a new financial and industrial system that faces up to competition today and beats the competition tomorrow. That is why Keir Starmer’s commitment to turn the UK into a green-growth superpower is so important. Britain has the science to produce green energy and to create the new technologies that will allow us to adapt to climate change. This is a challenge that cannot be met by shrinking the state. It requires a new entrepreneurial state underpinning the risks involved in providing the new goods and services that an overheating world will need.

    The Prime Minister’s diagnosis of the need for growth is correct but, instead of tackling the problem with modern economic medicine, she plans to bleed the patient. I understand that the Prime Minister read politics, philosophy and economics—PPE—at Oxford. It is evident that she read too many Ps and not enough E.

  • Michael Forsyth – 2022 Speech on the Growth Plan (Lord Forsyth of Drumlean)

    Michael Forsyth – 2022 Speech on the Growth Plan (Lord Forsyth of Drumlean)

    The speech made by Michael Forsyth, Lord Forsyth of Drumlean, in the House of Lords on 10 October 2022.

    My Lords, I must say, I agree with almost every word that the noble Lord said. Now that we have put Brexit behind us, I think we could form a good partnership.

    What a great Budget Statement it was in terms of content. IR35 was an all-party recommendation from the House of Lords Economic Affairs Committee. The energy cost programme is an open-ended cheque for two years to save people from stress and worry in their homes and businesses. It goes far further than anything that the Labour Party proposed—its meagre proposal was for six months—yet we hear little about it. The other day, Laura Kuenssberg moved a Minister on because he had mentioned it before. It is a huge commitment on the Government’s part. To argue that the proposal to cut the top rate of tax, which would have cost £2 billion, crashed the economy is grossly irresponsible.

    The noble Lord, Lord Bilimoria, is absolutely right that the presentation of the mini-Budget was perhaps not ideal—it certainly created a reaction—but it was the spark that lit the tinder box, the tinder box being the fact that we have been living on printed money for far too long. In 2020, through QE, we increased the government bonds owned by the Bank of England by £450 billion. That is how Rishi Sunak was able to fund all those Covid measures, from Eat Out to Help Out to the furlough scheme and all the rest.

    The truth of the matter—both opposition parties need to recognise this—is that the era of cheap money is over. In the United States, Jay Powell is absolutely determined to drive down inflation, and rightly so. He is doing it by putting interest rates up. Those people who think that the mini-Budget caused the collapse of the pound—that is, the reduction in the value of the pound versus that of the dollar—need to recognise that the Bank of England put interest rates up by 0.5% when the market was expecting 0.75%. When the Americans are committed to a severe programme of interest rate increases, any economics undergraduate will tell you that the exchange rate is determined by the relative interest rates. So the campaign being pushed by the Labour Party to try to present the Government as having created an economic crisis is stuff and nonsense. The duty on all of us—[Interruption.] No, I will not give way; I have only four minutes.

    Noble Lords

    Oh!

    Lord Forsyth of Drumlean (Con)

    Fine, I will give way.

    Lord Liddle (Lab)

    How does the noble Lord explain away the fact that the Government introduced the largest set of tax cuts and the biggest increase in the budget deficit since the time of Anthony Barber in 1972?

    Lord Forsyth of Drumlean (Con)

    How does the noble Lord explain away the fact that his Front Bench supported all of it, including the reductions in national insurance and the basic rate of income tax? They did not support the corporation tax cut but that is presumably because they do not recognise the importance of having investment in our country. Where does investment come from? It comes from retained profits after tax; that is how I would explain it. It is actually to the credit of the Opposition that they supported the populist things. But they concentrated on the cut to the top rate of tax, which the Government have since decided not to go ahead with.

    Inflation is the enemy. Jim Callaghan, a great Labour Prime Minister, warned us that

    “inflation is the father and mother of unemployment”.

    That is why the Government are determined to try to get growth, and why we need to recognise that continuing with QE on the present scale will result in inflation and a disaster for both unemployment and our country’s prosperity. The era of free money is over. We need to concentrate on wealth creation, not wealth consumption. We need to save every penny; we could start with our own front door in this place, which is costing £2.5 million. Use the candle ends. Look at programmes and decide on priorities. Personally, I think that increasing universal credit should be a priority. However, if that is to be funded, people must recognise that it will mean cuts elsewhere.

    So I say this: all support to the Prime Minister. Stop the personal attacks and look at the reality, because if we get this wrong people’s mortgages and costs will go through the roof—and they will not be able to blame the Government.

  • Karan Bilimoria – 2022 Speech on the Growth Plan (Baron Bilimoria)

    Karan Bilimoria – 2022 Speech on the Growth Plan (Baron Bilimoria)

    The speech made by Karan Bilimoria, Baron Bilimoria, in the House of Lords on 10 October 2022.

    My Lords, as the chancellor of the University of Birmingham, I had the privilege to know the right reverend Prelate, David Urquhart, the ninth Bishop of Birmingham. In 2006, when he took office—taking over, of course, from John Sentamu, who went on to become Archbishop of York and now sits with us on the Cross Benches as the noble and right reverend Lord, Lord Sentamu—in his first sermon, he took out a mallet hidden under his cloak and smashed a clay jar in front of the whole congregation. His message was to demonstrate the fragility of human life in the world as a gift from God.

    He has worked for the homeless. He has worked tirelessly for interfaith harmony. He has worked for the chamber of commerce, as somebody from a business background and with a business degree. He has been here in the House of Lords since 2010, and has been convenor since 2015. Note the word “convenor”. We on the Cross Benches do not have a leader, we have a convener, and the same goes for the Bishops. What a time, with the changes of Government and all the challenges. He is a knight of the Order of St Michael and St George.

    Seventy is far too young an age to retire: you have just reached the middle of middle age. The right reverend Prelate always signed off as David Birmingham. Well, David Birmingham, the University of Birmingham, the city of Birmingham and this House will miss you enormously. Thank you for all you have done for all of us, and we wish you every success in your continued great work.

    In February 2021, I said to the Chancellor at the time, Rishi Sunak, when I was president of the CBI, “Do not increase taxes. Increasing taxes will hamper the recovery and hamper growth.” What did he do? He kept putting taxes up, up and up, to the extent that they are the highest in 70 years.

    Before the financial crisis in 2008-09, we in this country had a growth rate of 2.5%. Since then, we have had a decade of no growth, low productivity and low inflation. What a state to be in. We had austerity. That achieved nothing. So the Government are absolutely right to target a growth rate of 2.5%. They are absolutely right to reverse the 2.5%—1.25% and 1.25%—national insurance: it is a tax on jobs. Even the Labour Party said it would not have done that. The Government are absolutely right not to increase corporation tax from 19% to 25%. They are absolutely right with investment zones. They are absolutely right with the reform to IR35.

    But—and there are “buts”—what about speeding up the move to alternative energy, such as small modular reactors? That is not being spoken about. What about investment: replacing the super-deduction of 130% that will go in April with a 100% write-off to encourage businesses to invest? What about labour shortages? We kept saying to the Government, “Activate the shortage occupation list.” Now the Government say they are going to do it. I ask the Government to confirm in their response that this will actually happen.

    Then there was 23 September. It is a great lesson in life that it is not just what you do but how you do it. As the former Chancellor, now the noble and learned Lord, Lord Clarke, said, it is the first time a budget has caused a crisis. So much of what was intended was right. To go back to 40% as the top rate of tax is absolutely the right thing to do in the long run, but perhaps not now. As we have heard time and again, not having an OBR report to back it up was not a good thing; I am glad it is happening on the 31st.

    People do not talk about the thresholds. The thresholds were frozen by Rishi Sunak and remain. That is the biggest tax increase happening in front of us now. Do the Government agree with it?

    I am sorry that I am overrunning, because of paying the wonderful tribute that I was privileged to pay, but I have two more points. First, I have made the point time and again that we as business are grateful for the £400 billion of support that the Government gave through the pandemic that saved our businesses, our economy and our citizens, but you cannot stop there. If you play a tennis stroke and hit the ball—the £400 billion—to get the ball over the net you must follow through, and the Government must be prepared to follow through. Our debt-to-GDP ratio is not that high; it is the second lowest in the G7. Japan’s is at 250%; America’s is at almost 150%. We need to invest in skills and education, we need to reform the apprenticeship levy.

    My final point is this. If the Government do not help now, SMEs, in particular, will not survive. They need help with business rates, with delaying their taxes and with cash flow. Hospitality needs a VAT reduction. If these measures are not taken, we will see businesses going bust. Defence expenditure needs to go up to 3% of GDP right now. On a positive note, when the Ukraine war ends, we will have boom time.

  • PRESS RELEASE : ‘Green, not grey’ – National Trust calls on Government to put environment at root of growth plans [October 2022]

    PRESS RELEASE : ‘Green, not grey’ – National Trust calls on Government to put environment at root of growth plans [October 2022]

    The press release issued by the National Trust on 9 October 2022.

    The National Trust has today called on the Government to commit to a “green, not grey” growth agenda, as concerns continue to rise over proposals to rip up critical nature protections, remove planning regulations in so-called “investment zones” and review environmental farming subsidies.

    On Wednesday, the Prime Minister set out her plans for growing the economy, and said that, despite changes to come, “everyone will benefit from the result”.

    But the conservation charity is warning that for true, long-term benefit, economic growth and shared prosperity must not come at ‘wholesale’ cost to the environment. Instead, the Trust says, it should be rooted in green jobs, sustainable food production, clean energy and protected nature, heritage, and outdoor space.

    The Trust also said that while simplifying regulations was welcome, there was a difference between ‘red tape’ and crucial protections that safeguard the wildlife, landscapes and buildings that matter to people.

    It has set out a series of seven ‘red lines’ that it says cannot afford to be lost in upcoming Government policies:

    1. The government should prioritise green growth (including the 440,000 green jobs promised in the Net Zero Strategy)
    2. Any changes to existing laws must not water down critical protections for the environment and heritage
    3. New investment zones must not create grey zones devoid of nature or historic character in which people have no say about the development that impacts them
    4. New farm payments must keep the same level of commitment to reward farmers for public goods, from cleaner rivers to healthier soils and protecting our cultural heritage
    5. Government should listen and collaborate with the public, as well as conservation charities, farming groups, businesses and others who can inform decision making on what they propose
    6. Any changes to Government and its agencies must not adversely affect their ability to deliver on manifesto commitments, such as protecting 30% of the UK’s land for nature by 2030
    7. The Government must stay true to its net zero legal obligation and strategy – but fracking is not the answer

    Harry Bowell, Director of Land and Nature at the National Trust, said: “It is a myth that we can’t grow the economy and the environment together. Far from it. Healthy soils and clean water underpin sustainable food production, keeping food on our plates and providing for our next generations. These natural assets are also fundamental tools in making places more resilient to the shocks of climate change and in locking away carbon. And better, more plentiful green space boosts people’s health and wellbeing and lessens the burden on our already stretched NHS.

    “Not forgetting the significant amounts of money generated by the tourism industry because visitors come to see our amazing heritage, nature and landscapes.”

    “What we cannot have is growth at any cost. If we tarmac over green space, if we allow a planning free-for-all in our towns and cities, if we don’t invest in nature – then we put economies, livelihoods and wellbeing in danger. People need green space, they need local heritage and character, and they need a say in shaping the places where they live. We need to pursue growth with deeper roots.”

    The Trust cited its recent investment in The Roundhouse in Birmingham as an example of why nature and historical character is good for growth, not in opposition. Working jointly with the Canal and River Trust, the charity has revamped the historic Roundhouse building, making the most of its historic character and access to nature via the canal. Its rental units have proved attractive to local businesses, who want quality of life, not just grey development.

    Likewise, just outside, the Trust is working with the National Lottery Heritage Fund to support Birmingham’s parks and green spaces as part of its Future Parks programme. Research carried out as part of this work shows that for every pound spent on green spaces, the local economy benefits many times over, as the area becomes healthier and more attractive for investment.

    The charity also said vital protections were too easily dismissed as ‘red tape’.

    Harry said: “Too often the protections that keep our magnificent ancient trees standing, our seas and rivers clean, and our wildlife from dying out completely are dismissed as red tape. But once these natural assets are gone, we cannot get them back. Instead, we need should see these laws as safeguards, that protect the things people care about – and that means there’s more for our children, and our children’s children, to enjoy.”

  • London Fire Brigade – 2022 Statement on Just Stop Oil Stopping Emergency Vehicles

    London Fire Brigade – 2022 Statement on Just Stop Oil Stopping Emergency Vehicles

    The statement made by London Fire Brigade on 11 October 2022.

    An appliance from Kensington Fire Station was temporarily stopped by a road block and arrived within 14 minutes of being called.

  • Suella Braverman – 2022 Comments on Just Stop Oil Stopping Emergency Vehicles

    Suella Braverman – 2022 Comments on Just Stop Oil Stopping Emergency Vehicles

    The comments made by Suella Braverman, the Home Secretary, on Twitter on 11 October 2022.

    Blocking ambulances and fire engines and putting lives in danger is completely indefensible.

    I thank the Met Police who have arrested over 300 disruptive protesters from this self-defeating organisation so far this month.

    I expect the police to use the full powers we have given them to stop those who are hell bent on disrupting everyone’s lives.

    Our Public Order Bill will strengthen these powers further and toughen the penalties for guerrilla tactics.

  • Caoimhe Archibald – 2022 Comments on Conservative Budget Plans

    Caoimhe Archibald – 2022 Comments on Conservative Budget Plans

    The comments made by Caoimhe Archibald, the Sinn Fein MLA, on 11 October 2022.

    The Tories reckless mini budget continues to wreak economic chaos and will hit workers, families and businesses by pushing up mortgages and hiking businesses borrowing costs.

    The incompetent approach of the Tory Chancellor has led to the Bank of England having to again intervene to buy up government bonds to protect pensions.

    There is no greater indication that your plan is a mess when even the IMF, who championed cruel austerity that decimated our public services, are criticising them for making attempts to drive down inflation more difficult.

    It’s time for Liz Truss and the Tory government to scrap this plan, end the shameless policy of lining the pockets of the rich and halt the attack on our public services.

    Instead, they should support workers, families and small businesses who are struggling and introduce a windfall tax to cut the eye-watering profits of the big energy corporations.