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Tag: Lucy Neville-Rolfe

  • Lucy Neville-Rolfe – 2023 Speech at Deloitte Digital Conference (Baroness Neville-Rolfe)

    Lucy Neville-Rolfe – 2023 Speech at Deloitte Digital Conference (Baroness Neville-Rolfe)

    The speech made by Lucy Neville-Rolfe, Baroness Neville-Rolfe, on 17 January 2023.

    I am delighted to be here today. I have spent a lot of time with Deloitte over the years and have seen their spectacular growth and success and I have an enduring passion for small business – my father was a farmer who went bust, but he rose from the ashes and founded a successful small consultancy business – in Brussels as it happens trading on his brilliant language skills.

    Before entering politics I spent a long time in business. I was a main board and executive director at Tesco but I also worked at much smaller companies, including Dobbies garden centres and most recently at Crown Agents which provided overseas development services most brilliantly on vaccine delivery and in the Ukraine war. I know the challenges SMEs face every day, and I also know the  opportunities we can unlock by making the right changes in government – particularly to the complex procurement rules that are the bane of the small businesses.

    Happily I am now helping make these changes happen through the Procurement Bill which I have steered through the House of Lords and today is a great chance to discuss how the Bill and the changes I have pioneered will help small businesses get a bigger slice of the public procurement pie, both directly and through the supply chain. It’s good for you and it’s good for the country as a whole. By supporting your enterprise we help to grow the economy  – one of the Prime Minister’s five core pledges to kickstart the New Year.

    I want to start with some good news. Our determination to support small businesses through opening up public sector opportunities has led to record central government spending with SMEs – the £19.3 billion spent in 2021/2022, the latest data available, was the fourth consecutive increase. I’m sorry to say it’s not yet 1 in 3, it’s 27%, but progress has been made and obviously we’re determined to make further progress.

    And it’s been thanks to some fantastic collaborative working with you – the SMEs – and across government. Along the way, we have been holding departmental feet to the fire and challenging our own colleagues. What are they doing to increase their spend with SMEs and start-ups? How are they helping to overcome obstacles involved with bidding for work or contracting with central departments and agencies?

    We have been listening and learning. Working with industry, trade bodies, and the Cabinet Office’s own SME Advisory Panel – which hears first hand from 25 SME owners and entrepreneurs about the challenges and barriers they must overcome.

    And we have been taking practical steps, such as government departments having the power to exclude suppliers from the procurement process if they cannot demonstrate a history of prompt payment to their supply chain, and using the Public Procurement Review Service, based in the Cabinet Office, to unblock overdue payments on cases that are raised with them.

    But there is so much further for us to go together. After all, procurement accounts for around a third of all public expenditure each year: £300 billion, everywhere from huge projects like HS2 to local government, schools and prisons. Our focus is always on delivering the best possible value and outcomes from that investment: it is a major contributor to driving efficiency in public services. We want to see your portion of that public procurement pie chart grow even bigger – by using the Procurement Bill to help you, as well as venture capital and start-ups making a debut in contracting with the public sector.

    I remember when I was at Tesco I was asked if we could help with schools, I looked into it and it was a nightmare of bureaucracy, so I said it wasn’t for us, but we have to change this. Your enterprise and innovation is the hallmark of companies represented here today. It is a sad fact that productivity has largely flatlined ever since the financial crisis and we are determined to change that paradigm. If we could get productivity up we could grow the economy without pain so we do need to work on that and we want to change that paradigm.

    I know how important it is to get the details of the new rules right – and to support the underlying cultural change – so that public sector contracts are properly accessible and attractive for SMEs. We understand the limitations and restrictions of a regime – or rather, regimes: there are no fewer than four,  comprising 350 EU-based rules – designed primarily to support the EU single market rather than what we put first: value for money, efficiency, and doing a lot more to  support British jobs. And that’s why we consulted widely to get a clear sense of what needs to improve. I know we’ve had too many ministers in the Cabinet Office but there has been a thread of constant officials and we’re moving in the right direction. We heard, for example, about:

    • The inflexibility of the procedures, and the inability to negotiate and evolve bids – something that  would be standard practice in the private sector;
    • A cultural reluctance to work with potential suppliers, to test the market and help develop in partnership, before embarking on the procurement;
    • Less obvious barriers to SME participation: seen in some procurers’ practice of insisting that bidders provide three years’ audited accounts when their size means they aren’t required to file any; or that they have insurance to cover the contract even before putting in a bid, in case they win the contract. And possibly most important,
    • The perennial problem of late payment, a particular curse  for indirect suppliers.

    The new consolidated regime we are putting in place – which covers everything from paperclips to hospital buildings – directly addresses these challenges, and more. Even as the Bill moved through the House of Lords, I made a number of amendments to improve it, acting on feedback from the sector and with a surprising degree of cross party support.

    I know that SMEs welcomed the new provision that I instigated which explicitly requires contracting authorities to think about SMEs as routine. It means procurement teams will have to make sure there are no unnecessary barriers that might hinder smaller companies in the contract; and ensure that bidding timelines are realistic.

    It also means there is more consistent and helpful feedback to unsuccessful bidders, showing how their bid compared to the winning bid, and this is something I’ve had complaints from not only SMEs but local government bidding for central government contracts, we always lose and we don’t know why, this is not good practice. And I know many here will welcome the application of 30-day payment terms to public sub-contracts the entire length of the supply chain, regardless of whether they are written into the contract.

    We have also put provisions on the face of the Bill for the new single central online platform that underpins the new system, and will achieve a step change in transparency.  The platform, which will be free for all to access, will make life easier for suppliers in a range of ways. For example, it will let suppliers see forward pipelines. This will allow them to find out more, plan which contracts to go for, where to invest, and when to prepare to bid or work with partners to develop consortia and joint bids. It will establish a single place for suppliers to register and self-authenticate their key bidding information –  a “tell us once” approach that will cut out needless repetitive bureaucracy.

    One point in particular, for this audience, is the greater flexibility coming your way, and the simpler processes you will see, that will support innovation. Commercial teams will have more flexibility to design and run a procedure that suits the market in which they are operating, tailoring a procurement to their exact needs. Contracting authorities will find it easier to contract with partners to research, develop and eventually buy a new product and service in a single process; and they will be able to build in stages to the procurement process such as product demonstrations – something I know the tech sector has been pressing for – so for example a contracting authority would be able to invite bidders to come in, meet the buyer and showcase the new app they’re developing, so that they can get a really thorough appreciation of solutions being offered by suppliers and understand what those solutions do in practice, not just on paper.

    The new rules will also make clear that innovation in procurement does not apply just to buying something brand new: it can be about developing an existing product to meet fresh requirements.

    We recognise, however, that changing the law is only one half of the story. Changing the culture and behaviours of public sector buyers is another. Having the flexibility to work innovatively is not the same thing as working innovatively. That’s why we are investing in what I trust will be clear guidance, but also a significant training programme for contracting authorities ahead of implementation in 2024.

    Businesses have a key role in unlocking value from public contracts –  we look forward to continuing our work with business groups and trade associations, and our regional Growth Hubs, to ensure that the supplier community is also well prepared. I was at our Darlington economic campus last Friday and in York talking about how we can make a real difference from the Cabinet Office.

    This is because I want to see SMEs right across the UK helping the recovery by being more successful and winning much more of that procurement pie.

    There are exciting times ahead, from which we can all benefit.

    Thank you for listening. I look forward to your comments and questions.

  • Lucy Neville-Rolfe – 2022 Speech on the Growth Plan (Baroness Neville-Rolfe)

    Lucy Neville-Rolfe – 2022 Speech on the Growth Plan (Baroness Neville-Rolfe)

    The speech made by Lucy Neville-Rolfe, Baroness Neville-Rolfe, in the House of Lords on 10 October 2022.

    My Lords, I start by welcoming the noble Baroness, Lady Gohir, to today’s debate. I very much look forward to hearing her maiden speech and to her future contributions. On a sad note, we are also hearing the valedictory speech from the right reverend Prelate the Bishop of Birmingham, who has provided so many mature, sensible and considered contributions to the House over the past 12 years.

    It is a great privilege to open the debate on the economy. When the new Prime Minister was forming her Administration, I was honoured to be offered the post of Minister of State in the Cabinet Office, in effect replacing my noble friend Lord True, now the Leader of the House. I take this opportunity to express my admiration for his brilliant eulogy to Her late Majesty. I was briefed that most Cabinet Office work was, in the main, worthy, so I anticipated a future dealing with the humdrum detail of government work—below the radar, as it were. In the event—it is sometimes surprising how things turn out—I first come before your Lordships to outline the Government’s economic growth plan.

    As the Prime Minister has made abundantly clear, growth is the core economic mission of this Government. With economic growth, everyone benefits. We cannot have, say, a strong NHS, good schools or effective defence without it. We have three priorities: cutting taxes to boost growth, reforming the supply side of the economy and maintaining a responsible approach to the public finances.

    I will come to the details of the plan shortly, but first I will touch briefly on another important recent development that is an integral part of our whole economic package: our action on energy bills. The Prime Minister rightly took action on this crisis facing households within 48 hours of taking office. The energy price guarantee will limit the unit price that consumers pay for electricity and gas, so that for the next two years the typical annual household bill will be £2,500, in contrast to the £6,000 or so that some predicted. Millions of the most vulnerable households will also receive additional payments.

    We are also helping businesses. The energy bill relief scheme, providing an equivalent guarantee to that for households, will reduce gas and electricity prices for all UK businesses, charities and the public sector, especially schools and hospitals. Finally, to support the market, we have announced the energy markets financing scheme, providing a 100% guarantee for commercial banks to offer emergency liquidity to energy firms in otherwise sound financial health that face high margin calls.

    While early estimates suggested that our package could have cost as much as £160 billion, more recent estimates are much lower. The key point is that we are giving relief and confidence to a large section of the British people, something that will particularly matter to those at the lower end of the scale. Significantly, the measures have been designed to provide an incentive for fuel economy. There is a reduction in cost per unit, not an overall cap, so that it encourages people and businesses to minimise their energy use. More importantly, without this package it would have been a very brutal winter for millions of households and small businesses.

    Our growth plan sets out our vision for a simpler, lower-tax economy. This Government believe that high taxes reduce the incentive to work, encourage tax evasion, deter investment and hinder enterprise. Hence we are cutting the basic rate of income tax to 19p in April 2023—that is, one year early—which will benefit virtually all taxpayers.

    Noble Lords will have heard that the abolition of the 45% band will no longer go ahead. The Prime Minister and Chancellor have accepted that it had become a distraction from our growth plan. I point out, however, that 40% was the top rate from the date of the Thatcher reforms and all through the Major, Blair, and most of the Brown eras. Also, the top rate is 40% in the Republic of Ireland and 39% in Norway.

    International competitiveness must remain a vital objective, so next year’s planned increase in corporation tax will be cancelled. That means that the rate will remain at 19%, the lowest in the G20, enhancing the attractiveness of the UK as a place to do business. We are also confirming that the annual investment allowance will be set permanently at £1 million, and we have introduced legislation to cancel the health and social care levy. Reversing the levy delivers a tax cut for 28 million people, worth on average £330 every year, and a tax cut for nearly a million businesses.

    Planned increases in the duty rates for beer, cider, wine and spirits will also be cancelled. In addition, we want to help families aspiring to buy a home of their own. We have therefore proposed a series of reductions in the thresholds for stamp duty land tax, which will assist buyers, particularly first-time buyers.

    Simplification is close to my heart. We are embedding tax simplification into the institutions of government and repealing recent changes to off-payroll working rules—the infamous IR35—which added complexity and cost for many businesses that engage contractors. I know that this will be particularly welcome to our Economic Affairs Committee.

    We are introducing a VAT-free shopping scheme. We want our high streets, airports, ports and shopping centres to feel the economic benefit of the millions of tourists who visit our wonderful country each year. While the Government believe in lowering taxes wherever possible, achieving growth will take more than that. With more vacancies than unemployed people to fill them, we need to encourage people to join the labour market—getting more people into work by, for example, incentivising those claiming universal credit to secure more or better-paid work. We will also legislate to ensure that strikes can be called only once negotiations have genuinely broken down.

    To drive growth, we need new sources of capital investment. We want to unlock billions of pounds to help British businesses—for example, in developing new technologies that can scale up. Hence we will reform the pensions cap and launch the long-term investment for technology and science fund.

    We need global banks to create jobs here, invest here and pay their taxes here in London, not in Paris or New York, so we are scrapping the cap on bankers’ bonuses. To reaffirm the UK’s status as the world’s financial services centre, we will set out a package of regulatory reforms in the coming months.

    We must also see our way to simplifying regulation and cutting red tape in key areas such as planning and procurement. The weight of complexity and compliance is absorbing precious resources and holding back productivity. I know from my time with the other noble Lords on our Built Environment Committee how important housing and infrastructure are to our growth and success. Sadly, our planning system for major infrastructure is too slow and fragmented. For that reason, we are accelerating infrastructure delivery in energy, road, rail and gigabit-capable broadband, with new legislation that will unpick the complex patchwork of planning restrictions and EU-derived laws that constrain our growth, and we are getting the housing market moving by promoting the disposal of surplus public sector land for housing.

    Finally, and of great significance across our country, we are creating a series of new investment zones. We will liberalise planning rules on agreed sites, releasing land and accelerating development. We are introducing an unprecedented set of tax and national insurance incentives for business to invest, build and create jobs in these zones.

    The steps that the Government are taking add up to a radical and concerted effort to boost growth. In the coming months we will continue to work to bring forward further measures, with announcements on agriculture, business regulation, childcare, immigration and digital infrastructure.

    Crucially, the Government understand that growth and sustainable finances must go hand in hand. I remind noble Lords that in 2021 the UK had the second lowest debt-to-GDP ratio of any G7 country, lower than Japan, Italy, France, Canada and the US. Even so, only continued fiscal discipline will provide the confidence and stability to underpin long-term growth.

    Accordingly, as announced this morning, on 31 October —three weeks from now—the Chancellor will publish a medium-term fiscal plan setting out our responsible fiscal approach and how we plan to reduce debt as a percentage of GDP over the medium term. Further, he has asked the OBR to set out a full economic and fiscal forecast soon, and he continues to work closely with the Governor of the Bank of England.

    In conclusion, I passionately want—we all want—our country to succeed and to live up to our past achievements. To achieve that, economic success is essential. To that end, we must get the economy growing again. We must do so while still dealing with the effects of the Covid pandemic and its impact on our public services. We are also rightly engaged in giving significant help to Ukraine—obviously at a cost. Success will not be easy.

    Today we are here to listen to views from across the House and look forward to engaging in a constructive debate—but, however one looks at matters, achieving economic growth is vital if we are to achieve our ambitions. We need to do things differently and better. That is what the growth plan is all about.