HL Deb 04 February 1997 vol 577 cc1532-5

3 p.m.

Lord Dubs asked Her Majesty's Government:

Whether the recent statements by the Deputy Prime Minister concerning the Commission on Public Policy Research and British Business are representative of the Government's attitude to the business community.

The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe)

My Lords, my right honourable friend spoke for the whole Government in setting out our achievements in making this country the enterprise centre of Europe. He also made clear the political affinity of the Institute for Public Policy Research.

Lord Dubs

My Lords, will the Minister confirm that when the Deputy Prime Minister made those comments, he clearly implied that a number of leading British industrialists and businessmen were Labour stooges, referring in particular to the heads of GEC, British Airways, Sainsbury, and Legal & General? Does the Minister also agree that the Deputy Prime Minister implied that defence contracts which may be secured in the future by GEC might be under threat? Does that indicate that the Deputy Prime Minister—and therefore the whole Government—support British business?

Earl Howe

My Lords, the Deputy Prime Minister made absolutely no attack on the businessmen involved in the commission's report; nor did he imply what the noble Lord has just stated. My right honourable friend was making a simple point about the parentage of the report. The commission was set up by the Institute for Public Policy Research, which is an overtly Left-wing body. The commission was funded by the IPPR and was based in the institute's headquarters. The IPPR jointly owns the copyright. Therefore, it is hardly surprising that the report takes the view that it does on the social chapter and the minimum wage, a view which most business people—and the CBI and the Institute of Directors—clearly do not share.

Lord Wyatt of Weeford

My Lords, does the noble Earl agree that the Deputy Prime Minister's attack on the windfall tax was fully justified? Does he further agree that the so-called "fat cats" will not in any way be penalised unless they are still shareholders, and that those who will be penalised under the proposed windfall tax are millions of ordinary shareholders who had a contract with the Government that the value of their assets would not be diminished in that way? Is it not further the case that the whole affair is wicked and rampant legalised theft which may in any case be ruled out of order by Europe?

Earl Howe

My Lords, I agree with a great deal of what the noble Lord has just said. My right honourable friend was criticising Labour Party policy for its failure to come clean on the windfall tax. The Labour Party will not tell us which companies would be affected or how much it would cost. It will not comment seriously on the effects on ordinary consumers and shareholders. It is perhaps no coincidence that there is a resounding silence on the subject in the report also.

Lord Haskel

My Lords, if no attack was intended on the businessmen involved, does the Minister agree that the high degree of consensus between the commission's report and the Labour Party indicates that Labour is the right party to work with British business for the future prosperity of this country?

Earl Howe

My Lords, in a number of respects the report is an uncontentious document. It contains quite a lot of what one might call "motherhood and apple pie", but it is also interlaced with recommendations that are key elements of Labour Party policy, such as the social chapter and the minimum wage. Some businessmen have felt able to sign up to that. However, the document has also been used to create the impression that UK business as a whole backs the Labour Party's policies. The generality of business in the UK does not back those key distinguishing features of Labour policy. My right honourable friend sought to expose that.

Lord Lawson of Blaby

My Lords, did my noble friend have the good fortune to read the excellent article in yesterday's edition of the Financial Times by Sir Ronald Grierson, who writes with great experience as the former head of the then Labour Government's industrial reorganisation corporation and who was subsequently a senior director of Britain's largest manufacturing company, in which he pointed out that there was absolutely nothing new in that report and that it was merely a regurgitation of the corporatist benevolent nonsense which caused such damage to this country's economy throughout the 1960s and 1970s?

Earl Howe

My Lords, my noble friend makes an extremely important set of points. I commend that article to all noble Lords.

Lord Richard

My Lords, is the Minister aware that neither we, the IPPR, the business community nor the country as a whole normally take the meanderings of the Deputy Prime Minister seriously, but that when the right honourable gentleman said so elegantly yesterday in relation to the Wirral, South by-election that the Government were about to receive a kick in the teeth, we accept that he may unwontedly have stumbled into accuracy?

Earl Howe

My Lords, it is also my right honourable friend who is conscious that it is this Government who have delivered the best economic circumstances for many years which offer unparalleled opportunities for business. I believe that the electorate of the Wirral will focus on that very fact.

Baroness Farrington of Ribbleton

My Lords, can the Minister inform the House of the date of the Government's policy change with regard to the windfall tax? As the Government themselves levied a windfall tax on the banks, at what stage did they change their view and decide that a windfall tax is a bad thing?

Earl Howe

My Lords, as I recall, the background to the windfall tax on the banks was a climate of extremely high interest rates. My noble friend the then Chancellor took the decision that it was right to levy a tax in those circumstances.

Lord Peston

My Lords, is the Minister aware that his answers are extremely puzzling to some of us? I wonder whether he has read the report, which I hold in my hand. I have read it and one of the puzzling things about it is that I could not find a single word in it about the windfall tax so I am not quite sure how that issue has been brought into this Question. However, that is by the way.

The reason that I rise to my feet is that the Minister said that the report is full of Labour Party policy. When I read it, I thought that it was full of Tory Party policy—in other words, it sounded like a reasonably well-balanced document. Indeed, if somebody had asked me its provenance, I would have said that it almost certainly came from the Deputy Prime Minister. That is why many of us are so completely bewildered by the right honourable gentleman's attack on the document; it is pure Heseltine.

Earl Howe

My Lords, one only has to read the foreword to the report to understand the impression that it is trying to create. It refers to a politically balanced set of commissioners reaching conclusions with a broad objective appeal. The reality is different: the report is co-authored by a body whose trustees are leading spokesmen of the Labour Party.