My Lords, Britain has less than 1% of the world’s population and represents just 4% of the world’s GDP, and yet it makes up 7% of the world’s welfare spending. There is no question that the Budget deficit needs to be cut and that the Chancellor needs to balance the books, even if this has meant cuts of well over 20% in some departments, as we saw in the Statement. Yet now the British economy is growing faster than any other G7 economy, with low rates of unemployment and high employment, and projections which show that the growing economy will produce more tax receipts, allowing the Government to invest in the crucial means to make us more productive and innovative. I thank the noble Lord, Lord Carrington, for initiating this debate, and I could not agree with him more about tax simplification—in fact, I often say that the Office of Tax Simplification is an oxymoron.

I turn first to higher education, which is one of the jewels in this nation’s crown. The decision to allow part-time students to access maintenance, as well as the protection of science budgets in real terms, is an excellent one. The Government are finally moving in the right direction with regard to our universities. For decades we have underinvested in R&D, well below the OECD, EU and United States averages, but now there is a financial boost going towards Innovate UK and the UK’s network of world-leading Catapult centres. Investment is being made into promoting exports through UKTI. We see investment in our aerospace industries and other advanced manufacturing industries. Here I applaud the Chancellor’s decision to provide extra support for postgraduate students, who are a vital part of boosting productivity in this country.

As we have heard from the noble Baroness, Lady Noakes, by maintaining a historically low rate of corporation tax, the Chancellor has supported a business-friendly Britain, but as an entrepreneur and businessman of course I think that the top rate of income tax should fall back from 45% to 40%. If it did so, that would make us more competitive. Also, capital gains tax should be reduced from 28% to 18%, which is where it was. This week I spoke at the launch of ResPublica’s excellent report, Make or Break. It is all about encouraging manufacturing in the UK. During his visit to the UK in November the Indian Prime Minister, Narendra Modi, spoke of his “Make in India” initiative. India has a target to increase manufacturing as a percentage of GDP from 16% to 25%. Does the noble Lord, Lord O’Neill, agree that we in Britain should have a target to increase manufacturing from 10% of GDP, where it is today?

Furthermore, and more important, the Chancellor has understood our recommendations on military and defence spending. The warnings have been there since SDSR 2010, in which the scaling back of spending on defence and security, I believe, damaged our capabilities in those areas. On top of that, when it comes to security in the dangerous world we are living in, dismissing the idea of cuts to police forces is excellent news.

In full, this is an excellent review of the public finances. While it is right to continue to make the cuts that will make us more efficient as an economy, it is also essential to use the UK’s advantageous position to invest in helping the economy to grow. No business can grow by cutting alone; businesses can become more efficient by making cuts, but they also have to invest to grow. These are all steps in the right direction. However, this is dependent on a continuing increase in tax receipts and on net interest payments being low. If interest rates go up, it will be more difficult for the Chancellor to continue down this path.

Moreover, let us not forget that this was made possible by the Chancellor finding an extra £27 billion. The noble Lord, Lord Horam, talked about luck. Well, my best definition of luck is when determination meets opportunity. What is brilliant is that we must not forget that forecasts can be very badly wrong.

Robert Chote, the director of the OBR, said that his organisation had predicted growth to be six times stronger between 2010 and 2012 than the official figures suggested was the real case.

I would like to conclude by saying that I am so glad that the Chancellor has made the decision to reverse his planned cuts on tax credits. While the media and the noble Lord, Lord McFall, may have branded the Chancellor as having committed a dreaded U-turn, let us not forget, with all due respect to the noble Lord, Lord Wakeham, that without the actions of this House, the mistakes the Chancellor would have made would now be mistakes enshrined in law. That is no better reminder of the importance of this House when carefully considering legislation, and as the check and balance and guardian of the nation. Steve Jobs, the founder of Apple, said that, “changing your mind is a sign of intelligence”.

Clearly, we have a very intelligent Chancellor. I now also name him as “the listening Chancellor”. Thank you, Chancellor.

On accepting the post, Lord Bilimoria said: “I am honoured and humbled to have been asked to be Chancellor of this internationally renowned University with its vibrant, global community.  I am also delighted to have the opportunity to take on such a prominent role at the University where both my mother, my uncle and my maternal grandfather studied; the University which instilled the value of higher education in them, and in turn drove my own passion for learning and discovery.”  Professor David Eastwood, Vice-Chancellor of the University of Birmingham, said: “We are absolutely delighted that Lord Bilimoria will be our new Chancellor.  He is a highly respected global businessman and Crossbench Peer with a clear passion for higher education and the value it brings to society and to the economy.  He not only encapsulates the University’s commitment to internationalisation but his appointment underlines further the importance we place on forging strong, mutually beneficial partnerships between business and higher education.”

The Chancellor acts as the ceremonial figurehead of the University and has an important ambassadorial role, working with the Vice-Chancellor and the Pro-Chancellor to raise the University’s profile and advance its interests nationally and internationally.

Lord Bilimoria is already a member of the University of Birmingham Business School Advisory Board.

Lord Bilimoria received a Bachelor of Commerce degree from Osmania University in Hyderabad, India in 1981 and then moved to London where he qualified as a Chartered Accountant.  He then went on to read Law at Sidney Sussex College, University of Cambridge, graduating in 1988.

Lord Bilimoria is the founder of Cobra Beer, Chairman of the Cobra Beer Partnership Limited and of Molson Coors Cobra India, both joint ventures with the global brewing company, Molson Coors. He is also the founding Chairman of the UK India Business Council.  In 2004 he was appointed Commander of the British Empire (CBE) for services to business and entrepreneurship, and in 2006 he was appointed an Independent Crossbench Peer in the House of Lords and was made Baron Bilimoria of Chelsea in the Royal Borough of Kensington and Chelsea, making him the first ever Zoroastrian Parsi to sit in the House of Lords.

In Parliament, Lord Bilimoria is active in a wide range of matters including commerce, entrepreneurship, education, diplomacy, minorities’ contributions, and academia. In his frequent speeches in the House, he has spoken of the need to reform immigration policy to allow the brightest and best to come to the United Kingdom to develop their skills and business plans. He has been acknowledged as an ambassador for Britain, India and the Parsi Community. In 2013, he established the Zoroastrian All-Party Parliamentary Group, which is intended to provide an official forum for parliamentarians to increase their awareness of this ancient religion.

For more information, please contact the University directly via the following link.